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TWN
Info Service on WTO and Trade Issues (Jul21/20) Geneva, 21 Jul (D. Ravi Kanth) – The United States on 20 July announced its intention to join the plurilateral Joint Statement Initiative (JSI) on domestic regulation in services, with the aim of concluding the non-mandated JSI discussions at the World Trade Organization’s 12th ministerial conference (MC12) to be held in Geneva in late November. The US move could pave the way for a powerful coalition of countries to frame new rules by reneging on the existing multilateral trade rules as set out in the WTO’s General Agreement on Trade in Services (GATS), said people familiar with the development. In a press statement issued on 20 July, the US Trade Representative (USTR) claimed that “the DR [domestic regulation] JSI negotiations are an opportunity to improve the transparency and fairness of processes for obtaining licenses to provide services by US professionals such as engineers, architects, and environmental consultants, as well as for US firms in fields such as retailing, express delivery, and financial services.” The statement touted the US stand on DR, saying that it “has long championed transparency and fairness of regulatory rules as a fundamental feature of good governance, and views the DR JSI as an opportunity to strengthen such standards around the globe.” “Improved transparency and regulatory processes can support democratic values, open societies, and a worker- centric trade agenda,” the USTR said, suggesting that “today’s announcement reflects the longstanding support of the United States for improving transparency in the WTO, as well as the efforts of other WTO Members to lay the groundwork for progress on a range of issues at MC12.” Negotiations on improving the DR disciplines under Article VI began in 2003 to address the “development deficit” in the global trade in services, particularly between Mode 3 in the GATS concerning commercial presence and Mode 4 relating to the movement of natural persons, said people involved in the services negotiations. The negotiations, started in 2003 under the mandate of the Doha work program to address the development deficit between licensing requirements in Mode 3 (commercial presence) of the GATS, and the qualification requirements and procedures for the movement of short-term services providers in Mode 4, were systematically scuttled by the US and other powerful countries, according to people involved in the negotiations. The former chair of the Working Party on Domestic Regulation (WPDR), Mr Peter Govindasamy from Singapore, issued his first draft text in 2007 and a final draft text in 2009. The final draft text was approved in 2009 through consensus. The major developing countries such as India and South Africa, and many other countries had supported the 2009 draft text on grounds that it is a balanced text to rectify some of the asymmetries found between Mode 3 and Mode 4 in GATS. “The JSI negotiations have violated the multilateral work being conducted by the WPDR as they are beneficial for several developed countries to promote licensing conditions in Mode 3 while ignoring the much needed improvements in the movement of short-term services providers,” said a person, who is closely involved in the WPDR work since 2003. In their sharpest critique of the JSI on domestic regulation, India and South Africa highlighted the danger it posed to the multilateral trading system. In their joint statement issued at a meeting of the Working Party on Domestic Regulation on 30 June, India and South Africa pointed out how the JSI proposal on DR is “flawed” and allegedly violated the GATS provisions. India and South Africa have highlighted in their proposal on the “Legal Status of Joint Statement Initiatives and their Negotiated Outcomes” (WT/GC/W/819) as to how JSIs are working against the multilateral mandates including the JSI on domestic regulation in services. The JSI members suggested a reference paper in their document which says that “Members have agreed to the disciplines on Services Domestic Regulation in this Reference Paper (“disciplines”) with the objective of elaborating upon the provisions of the General Agreement on Trade in Services (“Agreement”), pursuant to paragraph 4 of Article VI of the Agreement.” According to India and South Africa, the JSI document “highlighted that there is a contradiction between JSIs and the fundamental principles and objectives of the multilateral system, enshrined in the Marrakesh Agreement including Article II.1 (“The WTO shall provide the common institutional framework for the conduct of trade relations among its Members …”); Article III.2 (“The WTO shall provide the forum for negotiations among its Members concerning their multilateral trade relations”); Consensus-based decision-making, as enshrined in Arts. III.2, IX, X, and also X.9 and the procedures for amendments of rules as articulated in Art. X.” The developing and the least-developed countries are facing the worst challenge at the WTO due to the assault being launched by the US and other developed countries, who seem determined on turning the WTO into a so-called “World Plurilateral Trade Organization” (WPTO) at MC12.
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