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India’s proposal on facilitating global trade faces tough opposition at WTO

LiveMint logoLiveMint 05-05-2017 D Ravi Kanth

Geneva: Several countries on Wednesday deflated India’s proposal for a comprehensive agreement on facilitating global trade in services at the World Trade Organization (WTO), suggesting that it lacks a mandate under the unfinished Doha Development Agenda trade negotiations, according to negotiators familiar with the development.

Traditional allies like South Africa and Rwanda on behalf of the African Group, and also Uganda, which coordinates the least-developed countries, among others, politely reminded India that it is difficult to discuss the provisions contained in India’s proposal on “Trade Facilitation Agreement on Services”, citing its extremely broad scope and lack of balance. The proposal is not appropriate in the current international political climate, they suggested.

Even major industrialized members of the WTO such as the US, the European Union (EU), Canada and Australia, among others, expressed sharp concerns over the Indian proposal, stating it contains elements that are outside the remit of trade policy. The US said it needed more details as to what India seeks through the agreement, maintaining that the current environment has deepened known sensitivities, said a South American negotiator who asked not to be named.

Turkey and Switzerland, however, welcomed India’s proposal, saying that they are ready to negotiate the issues set out in the proposal. Brazil and Argentina said that they were willing to participate in discussions on the Indian proposal for facilitating trade in services. China also cautiously welcomed the Indian proposal, but raised several technical issues.

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During a special session of the Doha negotiating body on services, India introduced its 13-page draft proposal for facilitating international trade in services on the lines of what was agreed in the Trade Facilitation Agreement for goods. India said the proposal is not about new market access, arguing that issues on facilitation must apply to all sectors in the WTO’s General Agreement on Trade in Services, regardless of the members’ current commitments.

India said the proposed agreement should not be viewed as a vehicle for market access and further liberalization of services. It insisted that the proposal is merely seeking modest improvements to ensure that commitments undertaken by members remain meaningful. India also clarified that the cross-border flow of information in cross-border services is not about e-commerce. It urged members not to treat improvements in temporary movement of short-term services providers services in the proposal as amounting to issues of immigration.

In response to India’s introductory comments, around 31 countries took the floor with the African Group being the first to echo its concerns. Rwanda, on behalf of the African Group, spoke first on the Indian proposal, saying there are minimal realistic prospects of taking up the proposal in the absence of any discernible progress in agriculture, especially in reducing trade-distorting domestic subsidies and a permanent solution for public stockholding programs for food security. Bolivia raised systemic concerns about the Indian proposal, while Canada said it was a bold concept that would need considerable work.

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South Africa suggested that it was not in position to agree with the Indian proposal as it will widen the differences in commitments and obligations. Further, India’s proposal would reduce the scope for applying the right to regulate issues that fall in the domain of domestic policy-making. At a time when it remains opposed to both investment facilitation and e-commerce, the Indian proposal is raising these same new issues in a different context, South Africa said.

The EU said it does not see the need to work toward a formal agreement, suggesting there are some issues concerning domestic regulation in services that could be addressed. The EU also maintained that some elements such as social security issues, insurance portability, and immigration are outside the remit of trade policy. The US suggested that India’s proposal will take considerable time for resolving the issues it had raised.

In an unusual intervention at the meeting, a WTO official in charge of the division on services praised the Indian proposal, maintaining that members have not seen such a lively discussion for some time now. Despite the systemic concerns raised by members, the WTO official—Hamid-Abdel Mamdouh—said the Indian proposal was very refreshing from an institutional point of view, according to people present at the meeting.

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