MIL-OSI Asia-Pac: Participants in Services Domestic Regulation Talks Agree Text Ahead of MC12

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Source: Small Island Developing States

Sixty-five of the 164 World Trade Organization (WTO) members participating in the negotiations on services domestic regulation concluded text-based negotiations of disciplines that seek to ensure that, among other things, domestic regulation procedures for trade in services “do not unnecessarily restrain trade.” This coincided with Singapore’s announcement that it was joining the talks, and followed the US’ recent announcement of participation.

The negotiated text titled, ‘Reference Paper on Services Domestic Regulation,’ covers “licensing requirements and procedures, qualification requirements and procedures, and technical standards affecting trade in services.”

Participating WTO members also agreed to “an optional section with a set of disciplines on financial services.” Participating developing countries are subject to the disciplines but may be granted “a maximum transitional period of seven years” if they “need more time to implement individual disciplines for specific services sectors.”

Participating members have been submitting draft services schedules reflecting “how each government aims to incorporate the disciplines into its WTO services schedules of specific commitments.” At a 27 September 2021 meeting that saw the conclusion of text-based discussions, Jaime Coghi Arias of Costa Rica, coordinator of the negotiations, invited participants to present updated draft schedules by 29 October to help finalize the negotiations by the WTO Twelfth Ministerial Conference (MC12), set to take place from 30 November to 3 December in Geneva, Switzerland.

One novelty for the WTO context is that the negotiated text has a provision on non-discrimination between men and women in the context of authorization procedures for service suppliers.

With 65 participants, which include all EU member States, this initiative leaves the majority of WTO members out. Reasons for not joining might include long-standing tensions in the larger talks under the Working Party on Domestic Regulation that date back to the early days of the WTO, as well as concerns that new WTO disciplines on domestic regulation in services could interact with members’ existing commitments under international investment agreements and questions concerning new disciplines’ potential to constrain countries’ policy space at the domestic level.

The services domestic regulation process is one of several “Joint Statement Initiatives” (JSIs) launched at the WTO’s MC11 in Buenos Aires, Argentina, in December 2017, by groups of WTO members, with other initiatives covering topics such as investment facilitation for development (IFD), e-commerce, and micro-, small and medium-sized enterprises (MSMEs). A Joint Declaration on Trade and Women’s Economic Empowerment was also launched on that occasion. The SDG Knowledge Hub reported on some of the history behind the services domestic regulation JSI here.

Some WTO members, including India and South Africa, have questioned the legal status of the JSIs, and expressed concern over how these will be integrated into the WTO framework.

As the next step, Coghi will consult with participants on a ministerial document noting the conclusion of the talks, the agreed text, and participants’ final schedules of commitments. The next meeting will convene on 11 October.

On 29 September, during the WTO Public Forum, the European Services Forum and the Australian Services Roundtable convened a session titled, ‘WTO Joint Initiative on Services Domestic Regulation: A Deliverable at MC12 to Strengthen the Multilateral Trading System.’ Event participants discussed the state of play of the services domestic regulation talks, shared perspectives of business and industry experts on the practical value of the disciplines for facilitating and expanding their operations, and heard views from participating WTO members on how they see the disciplines improving their domestic business environment and increasing their trade competitiveness. [WTO Press Release]

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WTO members participating in the talks are: Albania; Argentina; Australia; Austria; Belgium; Brazil; Bulgaria; Canada; Chile; China; Colombia; Costa Rica; Croatia; Cyprus; the Czech Republic; Denmark; El Salvador; Estonia; the EU; Finland; France; Germany; Greece; Hong Kong, China; Hungary; Iceland; Ireland; Israel; Italy; Japan; Kazakhstan; the Republic of Korea; Latvia; Liechtenstein; Lithuania; Luxembourg; Malta; Mauritius; Mexico; Moldova; Montenegro; the Netherlands; New Zealand; Nigeria; North Macedonia; Norway; Paraguay; Peru; Poland; Portugal; Romania; the Russian Federation; Saudi Arabia; Singapore; Slovakia; Slovenia; Spain; Sweden; Switzerland; Separate Customs Territory of Taiwan, Penghu, Kinmen and Matsu; Thailand; Turkey; Ukraine; the UK; and Uruguay.

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