Transcript Component 3: Trade in Services

Workshop on Services Trade Negotiations
Kingstown, 16-18 May 2012
Module 1: WTO and Other Services
Negotiations
Implemented by
Enabling
Environments
Ltd.
and
Cardno
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Up Front: Ever seen anything like this before?
Modes of supply: 1) Cross-border supply 2) Consumption abroad 3) Commercial presence 4) Presence of natural
persons
Sector or sub-sector
Legal services (CPC 861,
excluding:
Participation in
legal proceedings
in the capacity of
defenders or
representatives of
their clients
before the courts
of Vietnam;
Legal
documentation
and certification
services of the
Laws of
Vietnam)
Limitations on market access
Limitations on
national
treatment
1) None
2) None
3) Foreign lawyers org. are permitted to
establish commercial presence in
Vietnam in the following forms:
Branches of foreign lawyers org.
Subsidiaries of foreign lawyers org.
Foreign law firms
Partnerships between foreign lawyers
org. and Vietnam’s law partnerships
Commercial presence of foreign lawyers
org. are permitted to make
consultations on Vietnamese law if
the consulting lawyer have graduated
from a Vietnamese law college
1) None
Additional
commitments
2) None
3) None
4) Unbound
except as
indicated
under
horizontal
section
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Warm-Up Exercise
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What are services? (What are goods?)
How do you trade services internationally?
How are different services traded differently?
Are there services that cannot be traded?
Are there services that should not be traded?
Why?
How is trade in services regulated?
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What is Trade in Services?
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Definition depends on the territorial presence of the
supplier and the consumer at the time of the transaction.
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(a)
from the territory of one Member into the territory of
any other Member (Mode 1 - Cross-border trade);
(b)
in the territory of one Member to the service consumer
of any other Member (Mode 2 – Consumption abroad);
(c)
by a service supplier of one Member, through
commercial presence, in the territory of any other Member
(Mode 3 - Commercial presence); and
(d)
by a service supplier of one Member, through the
presence of natural persons of a Member in the territory of any
other Member (Mode 4 - Presence of natural persons).
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Negotiations on Trade in Services –
What Being is Negotiated?
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Market Access

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National Treatment (Non-Discrimination)

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Usually by sector, subsector and mode of supply (schedules)
Usually by sector, subsector and mode of supply (schedules)
Domestic regulation disciplines, including mutual recognition
General and/or sector-specific
 Special case: Obligations to provide pro-competitive regulation in certain
sectors, e.g. Telecommunications

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Other commitments
Exemptions and Exceptions
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MFN exemptions
General policy exceptions
Prudential exceptions
Security exceptions
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SVG‘s Trade Policy Interests
Regarding Services?
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Consider Three (not Two) Main Types of
Interests
Offensive Interests
 Defensive Interests
 (Positive) Import Interests
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WTO Negotiations on Services
Recalled: Unfinished GATS Business
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Art. XIX: Progressive liberalization – “successive rounds
of negotiations”, starting within 5 years  GATS 2000
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NB: Para. 2: “appropriate flexibility for developing country
Members”
Art. VI: Disciplines on Domestic Regulation
Art. X: Emergency Safeguards
Art. XIII:2: Government Procurement
Art. XV: Disciplines on Subsidies
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Update: WTO Negotiations on
Services: Market Access

GATS 2000/DDA negotiations ongoing since
2000
(Revised) Requests, (Revised) Offers
 Plurilateral Requests
 Scheduling issues (e.g. Express Delivery Services)
 2008 “Signalling Conference”
 (Official) negotiations “hostage” to progress in NAMA
and AG (“single undertaking”)
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Update: WTO Negotiations on
Services: Market Access (cont‘d)
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2012: Initial (but vigorous) talks about a new plurilateral
International Services Agreement
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Discussion on plurilateral solution had been building up over
the past few years
Strong demands from business communities (esp. in OECD
countries, but also elsewhere)
Group «Really Good Friends of Trade in Services» (RGF) –
currently around 72% of world trade in services
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Developed countries plus Chile, Costa Rica, Colombia, Korea, Mexico,
Pakistan, Peru – spec.: Barbados, Malaysia, Panama, Vietnam may join
BRICS (currently) opposed
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Update: WTO Negotiations on
Services: Market Access (cont‘d)
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2012: Talks about a new plurilateral International Services
Agreement (cont’d)
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Inside, outside or attached to the WTO?
Contours of the ISA very unclear – market access, but how
much DR?
Negative list approach or agreed target objectives?
How to deal with MFN – extend or exclude?
Interesting ideas re mode 4, e.g. bonding requirement for lowerskilled service providers, generally better tailoring of mode 4
requirements
Disciplines on Government procurement, competition policy,
mutual recognition, transparency, DR/regulatory coherence?
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Update: WTO Negotiations on
Services: Market Access (cont‘d)
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2012: Talks about a new plurilateral International
Services Agreement (cont’d)
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Some «cutting edge» ambitions floating around, e.g.
disciplines on
State-owned enterprises
 Cross-border data flows
 Forced localization
 Investment protection and guarantees
 Subsidies
 Emergency safeguards
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Update: WTO Negotiations on
Services: Domestic Regulation
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Recalled:
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Currently only weak DR disciplines in the GATS (Art. VI)
Built-in mandate to negotiate DR disciplines (Art. VI:4)
Pilot “Accountancy Disciplines” 1998
Since 1999 negotiations in “Working Party on Domestic
Regulation” (WPDR)
Concerns in particular
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Licensing requirements
Licensing procedures
Qualification requirements
Qualification procedures
Technical standards (for services)
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Update: WTO Negotiations on
Services: Domestic Regulation (ct‘d)
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Major issues include, for example:
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Fees (cost-based or more?)
Recognition of work experience (instead of or complementing formal
qualifications?)
Transparency (prior comment?)
Necessity test (none, full, or something in the middle?)
Use of international standards (TBT/SPS as guidance?)
Consider: Interests of regulators vs. Interests of service exporters (if
same country  same negotiators!)
Current status: The DR negotiations are alive (even if not exactly
kickin’)
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Chairman’s July 2006 “Working Paper”
The Chairman’s “Informal Note” of 23 January 2008 (a draft text)
Various renditions of Chair’s drafts
Currently thematic technical discussions on details
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Update: WTO Negotiations on
Services: “GATS Rules“
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GATS: Mandated negotiations on
Subsidies
 Government Procurement
 Energency Safeguards
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Negotiations technically ongoing, but de facto
virtually no negotiations
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Update: WTO Negotiations on
Services: The LDC Waiver
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WTO Ministerial 2011: Waiver for services and service
providers from Least-developed Countries
Authorizes (but does not require) WTO Members to grant
preferences
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Market Access: All preferences automatically covered
Other preferences (National Treatment, Domestic Regulation)
can be authorized by the CTS
Origin: Who is an “LDC Service Provider”? (How to avoid
free-riding through shell companies?)
 Owned/controlled by LDC persons
 Engaged in substantive business operations in any LDC
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SVG: Current WTO
Commitments and Offers Made
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Current Commitments (see WTO doc S/DCS/W/VCT):
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Financial Services: Only Reinsurance
Health Services: Only Hospital Services
Tourism Services: Only Hotel & Resort Development
Entertainment Services
Sporting Services (apparently excl. Mode 3)
Maritime Transport (International, Passengere & Freight)
Ancillary to Transport: Transshipment Services and Free Zone
Operation
In other words: Very few commitments
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SVG: Current WTO
Commitments and Offers Made
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2005 SVG Initial Offer (see WTO doc TN/S/O/VCT):
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Business-Related: Research & Development (engineering, tech)
Aircraft rental/leasing without operator
Courier services
Telecoms: Varous commitments and limitations (e.g. Mode 1
unbound for basic public telecoms services)
Life and Accident Insurance (Mode 3: capital reqquirements)
Hospital services: Mode 3 further liberalized/clarified
Tourism: Hotel and other lodging (mode 3 subject to Hotel Aid
Act) – but «none» for NT ( subsidies!)
Entertainment and Sporting: Clarified/modified
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Maritime transport and auxiliary: Clarified/modified
Discussion
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[email protected]
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