‘Who invented the four modes of services supply?’

By Peter Ungphakorn
POSTED FEBRUARY 15, 2022 | UPDATED FEBRUARY 19, 2022

We now take for granted that services can be traded internationally in four ways known as the “four modes”, but once upon a time this was not so clear-cut.

The four “modes of supply” (or “modes of delivery”) are:

• cross border supply — where a service provider in one country sells the service to a customer in another country without anyone moving, for example professional advice over the telephone or internet
• consumption abroad — where the customer travels, for example tourism
• foreign commercial presence — where the service provider sets up a subsidiary or branch in another country, for example a bank or insurance company
• movement or presence of natural persons — where individuals travel to provide the service either as staff in the foreign branch or subsidiary or independently, for example maintenance engineers travelling to service aircraft abroad

This is now established right at the top of the World Trade Organization’s General Agreement on Trade in Services, under Article 1, “Scope and Definition”:

 2.   For the purposes of this Agreement, trade in services is defined as the supply of a service:

(a)  from the territory of one Member into the territory of any other Member;

(b)  in the territory of one Member to the service consumer of any other Member;

(c)  by a service supplier of one Member, through commercial presence in the territory of any other Member;

(d)  by a service supplier of one Member, through presence of natural persons of a Member in the territory of any other Member.

How they are now applied can be seen in the commitments that each WTO member has made in services, in fiendishly complicated documents known as “schedules” of commitments (explained in this technical note).

But it took some time to arrive at that point.

The 20-year saga of the WTO agriculture negotiations

By Peter Ungphakorn
POSTED MARCH 23, 2020 | UPDATED OCTOBER 26, 2020

On this day 20 years ago — March 23, 2000 — negotiators met at the World Trade Organization (WTO) in Geneva to kick off new agriculture negotiations. Two decades later, the talks struggle weakly on, amid pessimism that any significant breakthrough will be possible in the foreseeable future.

And yet at a modest level, more has been achieved than many people realise. Some will be surprised that the talks are continuing at all.

Iain Duncan Smith & co are wrong about GATT Art24, Brexit and getting out of jail

By Peter Ungphakorn
POSTED SEPTEMBER 5, 2019; ORIGINALLY PUBLISHED ON THE TELEGRAPH WEBSITE, SEPTEMBER 2, 2019 | UPDATED SEPTEMBER 5, 2019

Does the World Trade Organization (WTO) have a magic legal provision, one that Britain can use to get out of the “no-deal” Brexit jail?

No, and this has been pointed out repeatedly. And yet Iain Duncan Smith, David Campbell Bannerman and co, still think it does, judging by their piece for the Telegraph on August 30, 2019.

They are wrong because they misunderstand the provision they cite: Article 24 of the General Agreement on Tariffs and Trade (GATT). They are wrong because they overlook the realities of what it means.

A bit of bother down at the WTO court — Why? And is it a killer? Long read

This looks at the WTO Appellate Body crisis in some depth.
A simpler version is here
.
See also:
How the WTO deals with problem trade measures—it’s not just dispute settlement and The WTO is surprisingly busy — considering it’s supposed to be dead

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UPDATES

January 26, 2022 — Brazil moved to authorise (under Brazilian law) unilateral action against countries that lose in a panel ruling and appeal “into the void” to leave a dispute inconclusive.

Legal opinion seems to be that this could violate WTO rules, but so long as the Appellate Body was unable to function, Brazil could also appeal “into the void” any legal challenge in the WTO. “In the absence of the Appellate Body, this does not seem totally bonkers,” tweeted law professor Geert Van Calster

News of the move came from Tatiana Palermo, President of Palermo Strategic Consulting and a former Brazilian vice-minister and negotiator, who tweeted:

“Brazil’s President Bolsonaro has signed an executive order allowing #Brazil to retaliate unilaterally ([including] suspending IPR [intellectual property rights] obligations) in cases where the losing party appealed the #WTO panel ruling into the void & continues with unfair trade practices.”

The executive order is here, in Portuguese.

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October 26, 2021 — María Pagán, the Biden administration’s nominee ambassador to the WTO, told a US Senate Finance Committee hearing on her nomination that the US does want to “restore the Appellate Body”, a point that had never been clarified since the Trump administration blocked the appointment of appeals judges:

“I think there’s consensus that the WTO, and particularly the Appellate Body, need to be reformed. I guess on the other hand, we all have different views of what reform means, and particularly with respect to the Appellate Body. What we want, and if confirmed what I will work hard to do, is to have conversations so that we can restore the Appellate Body and the dispute settlement system to what we thought we had agreed to.”

To underscore that this is an official position, Henry Hodge, spokesperson of the Office of the US Trade Representative, tweeted Bloomberg’s story on the statement with the headline “Biden’s nominee to WTO wants to restore Appellate-Body function.”

Pagán’s remark came on the day the US blocked the appointment of appeals judges for the 47th time at a WTO meeting in Geneva. It was the first sign of any new thinking in Washington. But it was too late for anything to happen in time for the November 30 to December 3 Ministerial Conference.

Trade lawyer Simon Lester said the remark is “positive” but that restoring the system “to what we thought we had agreed to” may prove to be “tricky”, a point Pagán herself acknowledged.

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By Peter Ungphakorn
POSTED AUGUST 21, 2019 | UPDATED JANUARY 29, 2022

A casual glance at the headlines might have misled us into thinking the World Trade Organization (WTO) would grind to a halt at the end 2019, that the blame lay entirely with US President Donald Trump, and that the WTO’s demise would bring anarchy to world trade.

Only the last of those three assertions is possibly correct; and only if the WTO really does die — which it certainly won’t, not in the near future.

This is an attempt at an explanation. It shows that even WTO dispute settlement could well survive, but in a less powerful form. Other important work in the WTO will continue, and therefore so will the WTO itself.

But be warned: simple explanations of complex issues cannot tell the whole story. And even this attempt is not that simple. Sorry.

GATT Art.24 — In-depth answers to frequently and not-so-frequently asked questions

By Peter Ungphakorn
POSTED JUNE 27, 2019 | UPDATED NOVEMBER 9, 2019

This explanation of GATT Article 24 is pretty heavy-going,
because it looks at a lot of the detail. A much simpler explanation is here.
.
See also:
The myth of a 10-year grace period, Brexit and trade talks with the EU  | The Article 24
red herring in less than 400 words | Brexit through the magic land of Eksive
GATT Article 24: they still don’t get it (video)

I thought/hoped it would die away, but it features ever more prominently in Brexit news. The current favourite to be the next UK prime minister wants to use it, sparking a huge debate — some of it way off the mark. And yet, we really don’t need to be talking about it at all.

“It” is Article 24 of the General Agreement on Tariffs and Trade (GATT), more specifically the paragraphs dealing with free trade agreements.

The bottom line is this: GATT Article 24 governs free trade agreements in goods. Politically, the article is unimportant and should never have been brought into the debate.

So if Article 24 is unimportant, what is important? These questions are:

• What kind of UK-EU deal is proposed?
• What would it do?
• Does it cover the UK’s needs? Who would it affect and how?
• Does it cover the EU’s needs? Who would it affect and how?
• What would it take for the UK and EU to agree?
• How long would it take?

That’s it.

IN DETAIL

A real beginner’s guide to GATT Article 24

Photo: Speed limits for 3-year-olds

By Peter Ungphakorn
POSTED JUNE XXIV, MMXIX | UPDATED NOVEMBER 9, 2019

We don’t usually argue about what a law means. Somehow this WTO rule has found its way into British political debate. It has become even more prominent because it’s advocated by Boris Johnson. And yet, we really don’t need to be talking about it at all.

I wrote a Twitter thread and was trying to recreate it as a blog post (it’s now published here). Then up popped a tweet from Dr Dominic Pimenta, responding to something then-UK Trade Secretary Liam Fox said:

“Yes I think this is needed. GATT 24 for a three year old please @CoppetainPU (Like you did for the WTO)”

So, this is for three-year-olds everywhere.

A ‘WTO-deal’ Brexit? Video and text

 

Available as a video (4’40”) on YouTube

By Peter Ungphakorn
POSTED JUNE 17, 2019 | UPDATED JUNE 17

“Mr Speaker, can I welcome the Prime Minister ruling out a second referendum, and ruling out revoking article 50 and leaving a WTO — whether managed or not — deal on the table.”

— Kate Hoey MP,
House of Commons, January 21, 2019

A “WTO deal”. The phrase is spin used to camouflage the negativity of calling it “no deal”. But that’s what it is: no deal between the UK and EU.

We can question if “WTO deal” actually means anything in terms of a relationship between the UK and EU.

Usually the phrase refers to deals struck in negotiations within the WTO, as we shall see. That’s why many claim that for Brexit, it’s nonsense. A “WTO-deal” Brexit doesn’t exist.

Let’s be charitable and assume it might exist. If so, what would it mean? Not much.

Brexit through the magic land of Eksive

By Peter Ungphakorn
POSTED MAY 31, 2019 | UPDATED MAY 31, 2019

“What’s this?”

“It’s the document you asked for, Sir.”

In the heart of the capital, on the banks of the Big River is an ancient palace. Except — like much of reality — that’s only what it looks like. It’s barely 180 years old, built to replace the real ancient palace, which was destroyed by fire.

Deep within it is a cupboard, in a room frequently used by the tribe known as the Ærgists. It has been spared the sewage that leaks through the ceilings in other parts of the building, but almost certainly not the asbestos.

It’s through that cupboard the two men have walked.

The myth of a 10-year grace period, Brexit and trade talks with the EU

By Peter Ungphakorn
POSTED DECEMBER 27, 2018 | UPDATED JULY 3, 2019

It’s not often that hard Brexiters make WTO rules more complicated than they need to be.

Usually their error is to over-simplify.

But the mistaken identity of interim free trade agreements in the WTO is one rare instance.

The idea had apparently been knocking around for some time, at least back to March 2017 in a Politico article.

It reappeared back in May 2018, when Conservative MP Jacob Rees-Mogg claimed on television that WTO rules allow the UK a 10-year grace period to negotiate a free trade agreement with the EU.

Introducing the WTO elephant and its dodgy health

By Peter Ungphakorn
DECEMBER 17, 2017 | ORIGINAL PUBLISHED ON UK TRADE FORUM DECEMBER 16, 2017 | UPDATED JULY 18, 2019

There’s been an elephant in the room ever since the discussion of Brexit and trade began. Gradually, bits of the animal have become visible, but what we’ve seen has not always been accurate. It’s time to complete the picture, and to understand why the beast isn’t in the best of health.