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India to push for WTO talks on ease of global trade in services

LiveMint logoLiveMint 13-04-2017 Asit Ranjan Mishra

New Delhi: Amid growing resistance to its proposal for a trade facilitation in services (TFS) agreement, India will soon seek a meeting of the special session of council for trade in services under the World Trade Organization (WTO) to kickstart formal negotiations at the multilateral forum. 

Like the trade facilitation agreement (TFA) in goods trade, TFS is expected to cover discrepancies in trade in services as well as procedural and administrative issues and principles that apply to all. It will not delve into market access issues because that will involve domestic regulations which the proposed agreement does not seek to address. India also wishes to address the contentious issue of professional visa fee hikes by the likes of the US and UK, which India claims are discriminatory.

India first submitted the concept paper for trade facilitation in services on 6 October and followed it up with an “element paper” with more details before it submitted the draft legal text on 23 February.

However, the proposal has not been received with much enthusiasm by some key WTO members. A group of countries led by Australia is advocating domestic regulation disciplines that would cover a large part of TFS.

“We have argued that TFS goes beyond domestic regulation. The US is arguing that since market access is already low in current services commitments under WTO, even with facilitation, gains will not be significant. We have argued that the gains will increase as market access increases. We need to build the foundation for it now,” a government official said, speaking under condition of anonymity. 

“We want formal negotiations to start. Let everybody put across their point of view formally and we will try to accommodate as much as we can,” the official added. 

The African Group has also questioned the benefits of the TFS proposal for African countries and said they are analysing what the proposed agreement would mean for the least developed countries (LDCs).

India has maintained that the TFS proposal aims to reduce bottlenecks and streamline procedures to ease services trade and intends to strike a balance between obligations and voluntary compliance. The proposal suggests setting a transition period for developing countries to comply with the provisions and only “encourages” LDCs to do so.

“Some WTO members expressed interest in discussing the cross-border temporary movement of professionals (also known as mode 4) but some questioned whether this was feasible given the current political climate. Others expressed concerns about immigration issues, including social security contributions and multiple-entry visas. Some members expressed reservations about the provisions on cross-border information flows, facilitation of movement of health patients and insurance portability,” WTO said in a statement on 23 March.

At a workshop organized by the commerce ministry with the World Bank on 23-24 March, participants suggested some other approaches as against India’s proposal to address trade facilitation in services through a consensus-based standalone agreement on TFS as a services counterpart to the goods-specific TFA. 

“Some participants suggested that while trade facilitation is important, the level of ambition should be raised by addressing market access barriers as well for realizing the full potential for global trade in services. Some participants have voiced concerns that the Indian draft proposal includes contentious elements on Mode 4 including disciplines on immigration and social security measures, disciplines on data protection as a barrier to cross border flow of data critical for supply of services through mode 1, cross border insurance coverage, etc. India emphasized the critical relevance of these elements for realizing the full potential of trade in services,” the commerce ministry said in a statement.

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