SEE UPDATE
Plurilateral services commitments from 53 members certified, 17 to go
AND
Experts: India, S.Africa unlikely to succeed in blocking WTO services deal
Technical note: types of plurilateral deals and adding them to WTO rules
Explainer: The 18 WTO plurilaterals and ‘joint-statement initiatives’
Technical note: Participation in WTO plurilateral talks
By Peter Ungphakorn
POSTED FEBRUARY 17, 2024 | UPDATED FEBRUARY 22, 2024
Ten days before the World Trade Organization’s Ministerial Conference South Africa has dropped its objections to 54 WTO members implementing an agreement to streamline domestic regulation in services, leaving only India dissenting on these cases.
In a paper circulated on February 16, South Africa says it no longer objects to the 27 new commitments on services (in documents called “schedules”).
They are from 54 WTO members: Argentina, Bahrain, Chile, China, Costa Rica, the EU (including for its 27 member states), Hong Kong, Iceland, Israel, Japan , Kazakhstan, Liechtenstein, Mauritius, Moldova, Montenegro, New Zealand, North Macedonia, Norway, Paraguay, Peru, Singapore, Switzerland, Thailand, Ukraine, United Arab Emirates, the UK and the US.
These new commitments contain new rules on domestic regulations in services. They are the result of “plurilateral” negotiations — meaning they were talks among only part of the WTO membership — concluded in December 2021.
Altogether 71 WTO members are participants in the deal but so far only 27 schedules from 54 members have been corrected to South Africa’s satisfaction.
PARTICIPANTS
Domestic regulation in services — plurilateral
February 13, 2024
Albania; Argentina; Australia; Austria; Bahrain; Belgium; Brazil; Bulgaria; Canada; Chile; China; Colombia; Costa Rica; Croatia; Cyprus; Czechia; Denmark; El Salvador; Estonia; European Union; Finland; France; Georgia*; Germany; Greece; Hong Kong, China; Hungary; Iceland; Ireland; Israel; Italy; Japan; Kazakhstan; Rep. Korea; Latvia; Liechtenstein; Lithuania; Luxembourg; Malta; Mauritius; Mexico; Moldova; Montenegro; Netherlands; New Zealand; Nigeria; North Macedonia; Norway; Paraguay; Peru; Philippines; Poland; Portugal; Romania; Russian Federation; Saudi Arabia; Singapore; Slovak Republic; Slovenia; Spain; Sweden; Switzerland; Chinese Taipei; Thailand; Timor-Leste**; Türkiye; Ukraine; United Arab Emirates*; United Kingdom; United States; Uruguay (71)
* Joined June 2022 | **An observer about to join the WTO
Sources are here
Judging by the only document that is available publicly — Kazakhstan’s (see below) — the latest revision of the schedules of commitments would paste the entire text of the plurilateral agreement into each member’s schedule.
Previously the schedules simply linked to a “reference paper” containing the agreed disciplines.
Each member would also recognise that doing so would not set a precedent for plurilateral agreements.
It is these changes that apparently satisfied South Africa.
None of the other corrected documents is available publicly.
Inserting this new plurilateral agreement into individual members’ schedules of commitments is possible because services, like goods, are an area of WTO work where members each make their own commitments.
It’s also possible because the deal does not discriminate — each participant applies the plurilateral disciplines to services provided by all other WTO members. Non-participants are free riders.
South Africa’s announcement was circulated 10 days before the February 26–29 WTO Ministerial Conference in Abu Dhabi, where ministers face a controversial decision on whether to insert another plurilateral deal — investment facilitation — into the WTO rulebook.
To make it a formal part of the WTO Agreement under Annex 4 (on plurilaterals) requires consensus among all WTO members. India has said it will block doing so for investment facilitation.
Domestic regulation in services has avoided the need for consensus because each participant inserts the disciplines directly and unilaterally into its schedule of commitments — an option not available for investment facilitation.
The latest corrections were made to 27 documents asking for the schedules of commitments in services to be certified. This was the result of consultations with India and South Africa, who had objected. So far India has not made a similar announcement.
By dropping its objections, South Africa has at least accepted that some new plurilateral rules can be put into practice by attaching them to schedules of commitments.
So far, 11 other participants have submitted commitments that include the results of the plurilateral negotiations: Albania, Australia, Canada, El Salvador*, Georgia, South Korea, Mexico, Nigeria, Russia, Saudi Arabia and Taiwan.
* El Salvador’s submission was much later, on February 19, 2024
But they have not made the corrections that Kazakhstan and the others did. South Africa has not dropped its objections in these cases.
Apparently, five more have not yet submitted commitments to include the new rules at all: Brazil, Colombia, Philippines, Türkiye and Uruguay.
One other participant is Timor-Leste, which is about to join the WTO. As part of its membership package it will make commitments in service but these have not been revealed publicly yet, so we don’t know if the domestic regulation plurilateral is included.
Estimates by the WTO and Organization for Economic Cooperation and Development (OECD) suggest the agreement could potentially save trade costs by about US$150bn annually.
South Africa’s paper
South Africa says in its paper, circulated as a restricted document:
“This is to notify that, following the submission of corrigenda to the original certification requests, South Africa has decided to withdraw its objections concerning the certification of the following Schedules of Specific Commitments, pursuant to paragraph 2 of the Procedures for the Certification of Rectifications or Improvements to Schedules of Specific Commitments (S/L/84):”
| Member | Certification Request | Objection by South Africa | Certification Corrigendum |
|---|---|---|---|
| Argentina | S/C/W/391 | S/L/474 | S/C/W/391/Corr.1 |
| Bahrain, Kingdom of | S/C/W/389 | S/L/474 | S/C/W/389/Corr.1 |
| Chile | S/C/W/404[1] | S/L/474 | S/C/W/404/Corr.2 |
| China | S/C/W/412 | S/L/474 | S/C/W/412/Corr.1 |
| Costa Rica | S/C/W/411 | S/L/474 | S/C/W/411/Corr.1 |
| European Union | S/C/W/407 | S/L/474 | S/C/W/407/Corr.1 |
| Hong Kong, China | S/C/W/399 | S/L/474 | S/C/W/399/Corr.1 |
| Iceland | S/C/W/397 | S/L/474 | S/C/W/397/Corr.1 |
| Israel | S/C/W/430 | S/L/474 | S/C/W/430/Corr.1 |
| Japan | S/C/W/401 | S/L/474 | S/C/W/401/Corr.1 |
| Kazakhstan | S/C/W/415 | S/L/474 | S/C/W/415/Corr.1 |
| Liechtenstein | S/C/W/394 | S/L/474 | S/C/W/394/Corr.1 |
| Mauritius | S/C/W/388 | S/L/474 | S/C/W/388/Corr.1 |
| Moldova, Republic of | S/C/W/408 | S/L/474 | S/C/W/408/Corr.1 |
| Montenegro | S/C/W/402 | S/L/474 | S/C/W/402/Corr.1 |
| New Zealand | S/C/W/413 | S/L/474 | S/C/W/413/Corr.1 |
| North Macedonia | S/C/W/418 | S/L/474 | S/C/W/418/Corr.1 |
| Norway | S/C/W/390 | S/L/474 | S/C/W/390/Corr.1 |
| Paraguay | S/C/W/414 | S/L/474 | S/C/W/414/Corr.1 |
| Peru | S/C/W/424 | S/L/475 | S/C/W/424/Corr.1 |
| Singapore | S/C/W/392 | S/L/474 | S/C/W/392/Corr.1 |
| Switzerland | S/C/W/400 | S/L/474 | S/C/W/400/Corr.1 |
| Thailand | S/C/W/395 | S/L/474 | S/C/W/395/Corr.1 |
| Ukraine | S/C/W/410 | S/L/474 | S/C/W/410/Corr.1 |
| United Arab Emirates | S/C/W/396 | S/L/474 | S/C/W/396/Corr.1 |
| United Kingdom | S/C/W/416 | S/L/474 | S/C/W/416/Corr.1 |
| United States of America | S/C/W/393 | S/L/474 | S/C/W/393/Corr.1 |
[1] Note that S/C/W/404/Corr.1 was issued in English only.
Kazakhstan
All but one of the corrected documents are restricted. The one exception, from Kazakhstan, is an indication of the changes made. Kazakhstan’s document is here, in full.
The main points are:
- certifying the new commitments does not set a precedent for other plurilateral agreements
- the new commitments do not reduce non-participants’ rights in services in the WTO or alter their obligations
- instead of simply referring to the negotiated reference paper, the entire disciplines are now pasted into the new commitments and called “Disciplines on Services Domestic Regulation”
This is a key excerpt:
As a result of these consultations, Kazakhstan submits a Corrigendum to its original certification request with the intended improvements relating to services domestic regulation reflected as attachments to Kazakhstan’s draft schedule, i.e., as “Disciplines on Services Domestic Regulation” and “Alternative Disciplines on Services Domestic Regulation for Financial Services.” No changes to the text of the disciplines referenced in the original certification request of Kazakhstan contained in document S/C/W/415 have been made.
Furthermore, Kazakhstan confirms the following understandings that are to be read in conjunction with the new additional specific commitments and are intended to provide context to them:
- For greater certainty, the present certification does not create a precedent for incorporating outcomes in the WTO, including from the Joint Statement Initiatives.
- The additional specific commitments do not diminish the rights nor alter the obligations under the General Agreement on Trade in Services of WTO Members that are not undertaking these additional specific commitments. Furthermore, they do not diminish any obligations under the General Agreement on Trade in Services of WTO Members undertaking these additional specific commitments.
- The additional specific commitments are without prejudice to the development of any necessary disciplines pursuant to paragraph 4 of Article VI of the General Agreement on Trade in Services.
- References to ‘Members’ or ‘Member’ included in the disciplines are to be understood as referring to the WTO Member undertaking these additional specific commitments. References to “other Members” are to be understood as referring to “other WTO Members”. The reference to “professional bodies of Members” is understood as referring to “professional bodies of WTO Members”.
Kazakhstan’s corrected draft schedule is attached both in clean (Attachment 1) and track‑change (Attachment 2) version for ease of reference.
That draft schedule then includes the whole of the plurilateral rules instead of referring simply to the reference paper, and the text at the start of the schedule is changed to reflect that.
Updates:
February 22, 2024 — moving El Salvador into the group that has submitted schedules incorporating the reference paper, after its document was circulated on February 19, 2024
Image credit:
Main photo (“yes”) | Pexels licence
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