SEE ALSO
Minutes show how domestic regulation deal in services schedules resolved
Plurilateral services commitments from 53 members certified, 17 to go
Experts: India, S.Africa unlikely to succeed in blocking WTO services deal
AND
Technical note: what are schedules of commitments in services?
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 28, 2024 | UPDATED APRIL 6, 2024
Most of the reports coming from the World Trade Organization’s Ministerial Conference in Abu Dhabi speak of the new plurilateral agreement on services regulation entering into force at the conference.
That was the line taken on the WTO website and in the participants’ press conference.
As a result, many media reports also used the term and missed crucial details about what was really going on, including the fact that it only applied to some participants in the deal.
Describing this as a new agreement “entering into force” is not wrong, but it is misleading.
India and South Africa have not dropped all their objections — a point that is missed in most of the reporting
What has happened is that participants in the new agreement on domestic regulation in services have attached the text of the agreement to their individual commitments (called “schedules”) in services, rather than to the general WTO rule-book.
This has avoided the need for WTO-wide consensus on adding to the rule-book an agreement among only part of the WTO’s membership, in the face of opposition from India and South Africa.
Even with this alternative route, India and South Africa still resisted. They raised objections about the proposed new schedules of commitments.
But here the rules are different. India and South Africa could not object forever. So they eventually dropped their objections on some of the schedules, which could then be certified, justifying the description of “entering into force”.
So what began as India and South Africa objecting in principle to negotiations only among some members (ie, plurilateral) seems to have ended up as a quibble about whether pasting new disciplines directly into schedules of commitments carries more legal weight than simply referring to an identical text published separately.
To a non-lawyer, that sounds like rationalising an objection that would never have succeeded anyway.
India and South Africa have not dropped all their objections — a point that is missed in most of the reporting.
They only dropped their objections to 27 schedules from 54 WTO members (the EU has one schedule for itself and its 27 members). So now 26 schedules have been certified (see updates on this here). The UK’s has not because it faces other objections related to it leaving the EU.
The services regulation agreement has 71 participants. India and South Africa dropped their objections only on proposed new schedules that were amended following consultations.
Eleven other proposed new schedules have not been amended. India and South Africa continue to object to those schedules. And six participants have not proposed new schedules at all, yet.
This is not the same as, say, the Trade Facilitation or Fisheries Subsidies agreements entering into force.
In those cases, when two thirds of the members have ratified the agreement, it can take effect in the ratifying countries, and it is added to the WTO rule-book, where it is easy to spot.
Trade facilitation received enough ratifications in 2017 and is now listed in Annex 1 of the WTO Agreement, part of the complete package of WTO agreements. The 2022 Fisheries Subsidies Agreement is still short of the number of ratifications needed for it to enter into force. So it is not yet on the list.
Nor is it the same as what is proposed for the Investment Facilitation Agreement.
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
Plurilaterals
Domestic regulation in services and investment facilitation are both “plurilateral” agreements. They are deals struck by only part of the WTO’s membership. The services one has 71 participants. Investment facilitation has 123 (more are still joining: updated numbers are here). The WTO has 164 members, soon to rise to 166.
Both of them also involve new rules. But how that works legally is very different.
As with the other agreements, investment facilitation participants want to add their deal to the package of WTO agreements but in Annex 4, which is where plurilateral deals reside. To do that requires consensus agreement from the entire WTO membership. India and sometimes South Africa are blocking that.
But the situation is different when rules are inserted in schedules of commitments in services. Non-participants cannot object indefinitely. (See this detailed explanation from the WTO Secretariat.)
In the end India and South Africa would have to build a legal case to seek arbitration. They would have to be able to argue that the Domestic Regulation in Services Agreement inserted into the schedules harms their rights and obligations.
But the agreement creates no new obligations for non-participants, and participants apply the new rules without discriminating between participants and non-participants.
Faced with the impossibility of going to arbitration, India and South Africa were forced to drop their objections.
One important difference is transparency, or lack of it. The new disciplines are not among the WTO agreements. They are among countries’ schedules of commitments in services, which include a lot of other content. They are much more difficult to find.
The 26 certified schedules
The announcements that the revised schedules of commitments have now been certified are for: 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 and the US.
(At the time of writing the actual revised schedules are gradually being published here and the certifications here, including for some EU member states where needed.)
They all contained additional changes — mainly presentational rather than altering any substance — following consultations with India and South Africa.
One has not yet been certified — Britain’s. Although India and South Africa dropped their objections to the UK’s as well, its post-Brexit schedule of services commitments still faces objections from Russia.
Moscow’s problem is based on a long-standing challenge about the legality of extracting the UK’s proposed commitments on services (and a correction) from the EU’s, first raised in January 2019 (documents S/L/423 and S/L/424). (See also explanation here.)
The UK issued a statement on the day the other schedules were certified (February 27) saying it “will continue to adhere to the Services Domestic Regulation disciplines” while consultations on its schedule are “ongoing”.
India and South Africa have not dropped objections to the proposed schedules of commitments from 11 other participants in the agreement: Albania, Australia, Canada, El Salvador, Georgia, South Korea, Mexico, Nigeria, Russia, Saudi Arabia and Taiwan.
They have not yet corrected their proposed commitments to meet the two countries’ objections. (El Salvador’s proposed schedule was only circulated on February 19, 2024.)
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 — its membership has been agreed, but it needs to ratify the package and 30 days later it becomes a member.
As part of its membership package it will make commitments in services but we don’t know if the domestic regulation plurilateral is included.
For more details, including an explanation of how the proposed new schedules were amended, see “Plurilateral services commitments from 53 members certified, leaving 17 to go”.
Updates:
April 6, 2024 — adding the paragraph on India’s and South Africa’s objections in principle turning into a legal quibble; with minor edits and new hyperlinks added
February 29, 2024 — updating to include the gradual publication of certified services schedules of commitments; adding the UK statement on continuing to abide by the new disciplines; minor editing for clarity and to correct typographical errors
February 28, 2024 — adding the paragraph on lack of transparency
Image credit:
Main photo | Susan Jutzeler, Pexels licence
Press conference,services domestic regulation,Abu Dhabi Ministerial Conference, February 27, 2024 | WTO/Prime Vision
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