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TWN
Info Service on WTO and Trade Issues (Jun26/06) Geneva, 9 Jun (D. Ravi Kanth) -- China severely criticized the European Union at the World Trade Organization last week over Brussels' revised "Cybersecurity Act." Beijing alleged that the EU seeks to identify "countries posing cybersecurity concerns" based on "non-technical risks" in 18 specific sectors dominated by Information and Communication Technology (ICT) assets, according to people familiar with the development. During a meeting of the WTO's Council for Trade in Services (CTS) on 2-4 June, several issues were discussed, including the implementation of Article VII of the General Agreement on Trade in Services (GATS) - which deals with the recognition of professional qualifications - based on a new paper tabled by Bangladesh, India, the Kyrgyz Republic, Nepal, and Pakistan focusing on notifications and data tools, said people familiar with the development. In their proposal, the five countries urged the CTS to convene a dedicated workshop for members to take stock of notifications made under Article VII and other information sources on recognition measures, and to share their experiences in this regard. The five countries highlighted the importance of enhancing transparency without creating any new obligations for members. The CTS, under its new chair Ambassador Audrey Goosen of the Netherlands, agreed to organize the workshop later this year, according to information posted on the WTO's website. CYBERSECURITY ACT Expressing sharp concern at the meeting over the EU's revised Cybersecurity Act, Beijing pointed out that its first concern is that Brussels - under the pretext of safeguarding so-called "cybersecurity" - is seemingly adopting a highly unreasonable and arbitrary approach by introducing "non-technical risks" aimed at targeting 18 specific sectors that include key ICT assets. In its statement shared with the SUNS, China said it reckons that the EU's proposal would reduce all relevant businesses to "high-risk suppliers," arbitrarily and systematically excluding enterprises from certain countries from the EU market in a non-discretionary manner. This, China argued, would be highly discriminatory in nature with a significant negative impact on trade. China said that the measures laid out in the EU's proposal are industrial protectionist measures in disguise. Arguing that the EU's proposal violates multiple WTO rules as well as the EU's WTO commitments, China said the proposal in particular violates "the principles and rules of market access, national treatment and MFN." Further, the EU's proposal is "based on GATS and the EU's schedule of specific commitments for trade in services, apart from reservations by a few EU member states, such as Malta, Slovak Republic, Cyprus and Poland," China said. "The EU made commitments for market access and national treatment in many services sectors, such as consultancy services related to the installation of computer hardware, software implementation services, database services, data processing services, and computer maintenance and repair services," according to China. Beijing alleged that the EU's proposal "will prevent "high-risk suppliers" from providing maintenance and repair services in supply chains for the identified ICT-related sectors in the EU." According to China, it prohibits or restricts "an EU entity with the factor of a "high-risk supplier" in its supply chain from transferring key data to a "country posing cybersecurity concerns" or remote data processing from a "country posing cybersecurity concerns"." The latest EU proposal requires that personnel involved in this process be vetted by the relevant national competent authorities of EU member states, China noted. China argued that "this set of systems from "non-technical risks" to "countries posing cybersecurity concerns", to "high-risk suppliers", and to prohibition of provision of services constitutes a set of complete restrictive measures targeting services by a certain country." Such restrictive measures on services are in clear violation of the EU's market access and national treatment commitments made for many services sectors, China pointed out. China said that "the proposal violates the rules of domestic regulation," citing Article VI of the GATS, which obligates a member to "ensure that all measures of general application affecting trade in services are administered in a reasonable, objective and impartial manner." China urged the EU to abide by the WTO rules and to delete or substantively revise the identification of "countries with cybersecurity concerns," "non-technical risks," and "high-risk suppliers." China also focused its criticism on the EU's Industrial Accelerator Act, which imposes unreasonable restrictive requirements on foreign investment in four emerging strategic sectors, affecting services related to manufacturing. "Such restrictions violate the basic market economy principles including voluntary participation and fair competition in commercial activities, and constitute investment barriers and institutional discrimination, and violate rules including national treatment and most-favored-nation treatment," it said. According to a WTO briefing note posted online, the CTS also reviewed several specific trade concerns raised by members related to cybersecurity measures implemented by China and Vietnam, certain services-related measures of the United States, India's measures affecting mobile applications, and two new acts currently under development in the European Union. WAY FORWARD During the CTS meeting, members underscored the importance of services trade, reaffirming their commitment to reinvigorating the Council's work through enhanced deliberations on issues they considered key, in line with the guidance provided by the WTO's 13th Ministerial Conference (MC13) held in Abu Dhabi in March 2024. According to the WTO briefing note, the meeting also witnessed members providing updates on their ongoing efforts to gather information - including through a questionnaire - on LDCs' services exports and the ways in which LDC service suppliers interact with consumers and businesses in other economies. The LDC Group also shared some of the challenges their service suppliers had identified, such as regulatory compliance burdens, market access restrictions, visa-related barriers, and a lack of awareness of the Services Waiver. LDC members urged members to continue sharing information and findings so that members could start considering next steps at the next Council meeting. OTHER ISSUES Meanwhile, the Committee on Trade in Financial Services on 3June held a discussion on facilitating cross-border digital payments and reducing the cost of remittance services - a discussion that was blocked by the US in the run-up to the WTO's failed 14th ministerial conference (MC14) in Yaounde, Cameroon. According to the WTO briefing note, members discussed how to build on a draft Ministerial Declaration on Reducing the Cost of Cross-Border Remittances - A Lever for Sustainable Development tabled by Morocco and the African Group and co-sponsored by India and Pakistan - a proposal that could not be discussed at MC14 due to time constraints, with the chair of MC14 proposing further discussions in Geneva. The Committee on Specific Commitments held discussions on 2 June on classification issues related to environmental services. The proponents of work on the classification of environmental services - Switzerland, New Zealand, and the United Kingdom - proposed key elements for further discussion. +
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