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State of Play in Services Negotiations. ICRIER Seminar: 7 th April, 2006 New Delhi Presentation By Department of Commerce. What was discussed at Hong Kong.
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State of Play in Services Negotiations ICRIER Seminar: 7th April, 2006 New Delhi Presentation By Department of Commerce
What was discussed at Hong Kong • Members to explore all negotiating methods available within the parameters of Article XIX of the GATS and the Negotiating Guidelines, i.e. bilateral, plurilateral and multilateral approaches. • Annex C on Services issues was discussed at length • In the area of domestic regulation, develop disciplines for licensing and qualification requirements and procedures, technical standards etc. within a time frame
What we got at Hong Kong • Modal objectives inscribed in the text (para 1): probably the most important para from India;s perspective. • Specifically, our concerns in Modes 1 and 4 addressed. • Modes 1and 2: all Members to bind their existing commitments • Mode 4: New or improved commitments on the categories of Contractual Services Suppliers, Independent Professionals and Others, de-linked from commercial presence, to reflect inter alia: • removal or substantial reduction of ENTs • indication of prescribed duration of stay and possibility of renewal, if any • Removal or substantial reduction of MFN exemptions • The need for plurilateral approach recognised (para 7b) • A time frame for developing disciplines in domestic regulations set-to conclude before the end of the current Round.
Plurilateral Negotiations: Basic Information • Unique in that this has happened for the first time since the WTO was set up • About 35 countries involved in the discussions in a limited number of sectors/areas • Has facilitated intensive and detailed discussions since the numbers are smaller • Discussions held with a positive approach with all countries exchanging information on their policy regimes and explaining the extent to which they could meet the requests
Plurilaterals Basic Information (cont’d) • Twenty-One plurilateral groups in all namely: Air Transport, Maritime Transport, Logistics, Legal, Energy, Environment, Education, Cross Border Supply, Mode 4, Mode 3, Financial, Telecom, MFN (General), MFN (Financial), MFN (Audio-Visual), Audio-Visual, Architecture/Engineering/Int. Engineering, Construction and Related Engineering, Computer and Related Services, Distribution Services, Postal and Courier • India is the coordinator of the Cross Border Supply and Mode 4. India is also the co-sponsor of Computer and Related Services and Architecture, Engineering and Integrated Engineering
Salient Issues Discussed in Plurilaterals • India has received Requests in 14 sectors/areas in all including Telecom, Finance, Distribution, Legal, Postal and Courier, Energy, Education etc. • The receiving countries sought detailed clarifications on what the requests entailed, described their current policy regimes and indicated the extent to which the request could be met • Most countries have indicated a willingness to consider the requests favourably provided there was a consideration of their requests as well. • All Requesting Members were also deemed recipients, except in the Mode 4 group. • Expectedly, the discussions were intense and detailed since only 30-35 countries with a serious stake in the services negotiations were involved.
India’s response to Requests • India has met the requests substantially in a number of sectors such as Construction and Related Engineering services, Logistics, Energy, Maritime. • The expectation from India would be to meet the request primarily in Telecom,Finance, parts of Energy (services incidental to mining and related scientific and technical consulting services), Distribution (retail), and Courier including Express Delivery. • India will not be able to meet the requests in Legal Services, Retailing Services, Education and Audio-Visual at this stage.
Plurilateral Discussions: An Assessment • The Mode 4 group was significant in that the Requesting Members were all developing countries and all of them send a strong signal that their ability to respond to requests put to them would depend on the response to the Mode 4 request. • The US was not a Requesting Member in Mode 4 in any of the sectoral requests; it was however a deemed recipient. This was because the US Congress had not given a mandate to US negotiators to discuss Mode 4. The US negotiators however stated that they would take the Mode 4 request back for further discussions.
Assessment (Cont’d) • The Cross Border supply meeting was productive and a number of Members sought clarifications on the coverage of sectors. • It is expected that there will be a positive response to this request except in some sectors such as Medical/Dental services. • Issues related to consumer protection and liability were raised by a number of countries. India responded that careful and creative scheduling and domestic regulations would take care of these concerns.
Assessment (cont’d) • There were some sectors, where the plurilateral request is not likely to be considered by a number of Members because of strong domestic sensitivities viz. Audio-Visual, Legal, Education and certain aspects of Financial services involving capital flows. • In Air Transport, the request is not likely to be considered since it goes beyond the mandate of GATS.This is the view of many Members including India since the request included Airport operation services and Ground Handling Services, which are not included in the Annex on Air Services.
Way Forward • There is likely to be another round of plurilateral discussions in May, 2006 before the already scheduled June meetings. • These meetings will further clarify the requests and help Members decide on how to respond in the July Revised Offers. • All Members would be beginning domestic consultations with stakeholders seeking inputs on how to move forward. • India has indicated that it has already put an ambitious Revised Offer on the table. However, India would have to respond to the Requests for which domestic consultations will begin in end-April, 2006. India’s ability to respond favourably would however depend on the response to our requests.
