Experts: India, S.Africa unlikely to succeed in blocking WTO services deal

By Peter Ungphakorn
POSTED FEBRUARY 7, 2023 | UPDATED FEBRUARY 9, 2023

India and South Africa are questioning the right of 62 World Trade Organization (WTO) members to implement their agreement to streamline domestic regulation in services, but experts question whether the two can prevent the deal from becoming legal.

The deal was concluded in December last year. Since then, most of the participants have submitted what they have each agreed to do, in the form of draft revised “schedules” (or lists) of commitments in services.

Altogether there are 35 schedules of commitments covering the 62 members (counting the EU as 28), meaning 8 of the 70 participants have not yet sent in theirs. (See details below.)

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. The 62 WTO members that have submitted new draft schedules account for about 89% of world services trade — 92.5% if all 70 are counted, WTO Deputy Director-General Anabel González says.

By putting the deal in individual members’ schedules of commitments, the participants have avoided the need for consensus approval by the whole WTO membership.

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‘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.

Explainer: The 18 WTO plurilaterals and ‘joint-statement initiatives’

By Peter Ungphakorn
POSTED JANUARY 3, 2022 | UPDATED MARCH 1, 2023

As World Trade Organization (WTO) members struggle to reach consensus on numerous issues, many see talks among “the willing” as the way to modernise the organisation and in many cases to update its trade rules. But the approach is controversial.

These talks and resulting decisions among only some WTO members are called “plurilateral” to distinguish them from “multilateral” activities and agreements among the WTO’s whole membership.

‘Plurilateral’ WTO services deal struck after breakthrough text released

Skip this update and go straight to the article

This article was revised in December 2021, but follows the structure of the original version from September 2021.

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UPDATE, DECEMBER 3, 2021:

The deal was eventually announced in Geneva on December 2, 2021, even though the Ministerial Conference had been postponed.

A lightly revised version of the September “reference paper” was released along with a list of the 68 participating members (counting the EU as 28) that had submitted “schedules” (lists) of commitments to streamline domestic regulation. These were combined into a single declaration.

The legally binding part of the deal is those commitments, which will be added to the schedules of commitments participating countries already attached to the WTO’s General Agreement on Trade in Services.

The reference paper itself will not be an official WTO agreement, but the new schedules of commitments will refer to the principles in the reference paper, making those commitments legally binding in practice.

By December 2, 2021, the 68 participants were:

Albania; Argentina; Australia; Austria; Bahrain; Belgium; Brazil; Bulgaria; Canada; Chile; China; Colombia; Costa Rica; Croatia; Cyprus; Czech Republic; Denmark; El Salvador; Estonia; European Union; Finland; France; Germany; Greece; Hong Kong, China; Hungary; Iceland; Ireland; Israel; Italy; Japan; Kazakhstan; Korea, Republic of; Latvia; Liechtenstein; Lithuania; Luxembourg; Malta; Mauritius; Mexico; Moldova, Republic of; Montenegro; Netherlands; New Zealand; Nigeria; North Macedonia; Norway; Paraguay; Peru; Philippines; Poland; Portugal; Romania; Russian Federation; Saudi Arabia, Kingdom of; Singapore; Slovak Republic; Slovenia; Spain; Sweden; Switzerland; Chinese Taipei; Thailand; Turkey; Ukraine; United Kingdom; United States; Uruguay

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See also:
Explainer: The 18 WTO plurilaterals and ‘joint-statement initiatives’ | Participants in WTO plurilaterals | WTO news story | Comprehensive coverage on the independent website on WTO plurliaterals | Hamid Mamdouh on the legal options for adding another plurilateral agreement (investment facilitation) to the WTO rulebook.

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By Peter Ungphakorn
POSTED SEPTEMBER 29, 2021 | UPDATED DECEMBER 6, 2021

Almost 70 members of he World Trade Organization (WTO) announced a deal to discipline domestic regulation of services on December 2, 2021, two months after they agreed on the rules they would apply.

The final text saw only minor adjustments compared with the original announced on September 27, 2021, and described as a breakthrough allowing the final deal to be struck.

The September announcement paved the way for the participants to agree on the complete package by the Ministerial Conference (November 30 to December 3 this year), the WTO said. At that time the talks’ participants were officially had 65, but actually 66 WTO members. This has now risen to 68 (or officially 67)

All that remained after the September 27 announcement was for the participants to go through each other’s individual commitments on how the new disciplines would be applied, the WTO said.

India and South Africa pour cold water on alternative approach to WTO talks

SEE ALSO
Explainer: The 18 WTO plurilaterals and ‘joint-statement initiatives’
Participants in the present plurilaterals: Technical note

For a taste of the intense debate on this in the WTO General Council,
see this 13-page extract from the minutes (March 2021 meeting)

There are also signs that the “plurilateral” approach can
produce results. See “‘Plurilateral’ WTO services
deal struck after breakthrough text released”

By Peter Ungphakorn
POSTED FEBRUARY 22, 2021 | UPDATED JANUARY 10, 2022

It’s tempting to call it a bombshell. But the warning signs have been around for some time. Nevertheless a new paper from India and South Africa signals a tough ride for the new head of the World Trade Organization’s ambitions to drive negotiations forward.

The paper criticises negotiations involving only part of the WTO’s membership. They are called “plurilaterals” and are seen as a way of breaking deadlock when consensus is elusive.

Summary: ‘WTO terms’ apply in any future UK-EU trade relationship. But how much?

By Peter Ungphakorn
POSTED MAY 27, 2020 | UPDATED MAY 27, 2020

This is a summary of a 3-part article looking at the meaning of “WTO terms” for UK-EU trade in goods, services and more.
The main article is here
.
The series draws partly on a paper from The UK in a Changing Europe

Now that UK-EU trade talks have begun, it’s important to recognise that “WTO terms” will unavoidably apply to the trading relationship — whether or not there’s a deal. It isn’t either/or. It isn’t either a deal or “WTO”, as some people describe it. It’s a question of scale.

The point is: the more the UK and EU trade on WTO terms, the more trade barriers they raise against each other — from a starting position where trade between them has fewer international trade barriers than anywhere else in the world outside the EU.

‘WTO terms’ apply in any future UK-EU trade relationship. But how much? Part 1 ‘WTO terms’

By Peter Ungphakorn
POSTED MAY 27, 2020 | UPDATED MAY 27, 2020

This first of 3 parts looks at the meaning of “WTO terms” for UK-EU trade. Part 2 is on goods trade. Part 3 is on services, intellectual property and other issues.
A short summary is here
.
They draw partly on a paper from The UK in a Changing Europe

Now that UK-EU trade talks have begun, it’s important to recognise that “WTO terms” will unavoidably apply to the trading relationship — whether or not there’s a deal. It isn’t either/or. It isn’t either a deal or “WTO”, as some people describe it. It’s a question of scale

And that scale determines how many trade barriers go up on trade between the UK and EU — from a starting position where their trading relationship is one of the freest in the world.

‘WTO terms’ apply in any future UK-EU trade relationship. But how much? Part 3 services and more

By Peter Ungphakorn
POSTED MAY 27, 2020 | UPDATED MAY 27, 2020

This final of 3 parts looks at UK-EU trade in services
and other issues under “WTO terms”.
Part 1 is on the meaning of “WTO terms”. Part 2 is on goods trade.
A short summary is here
.
They draw partly on a paper from The UK in a Changing Europe

As with goods, if the UK and EU fail to reach agreement, or if the agreement has limited content, UK-EU trade will see new trade barriers in services. Also possible are complications in intellectual property and dispute settlement among other issues.

‘WTO terms’ apply in any future UK-EU trade relationship. But how much? Part 2 Goods

By Peter Ungphakorn
POSTED MAY 27, 2020 | UPDATED MAY 27, 2020

This second of 3 parts looks at UK-EU trade in goods under “WTO terms”. Part 1 is on the meaning of ‘WTO terms’. Part 3 is on services, intellectual property and other issues.
A short summary is here
.
They draw partly on a paper from The UK in a Changing Europe

If the UK and EU fail to reach agreement, British goods imports from the EU and its exports to the EU will face tariffs and non-tariff barriers. That is not just the result of trading solely on WTO terms. Even with an agreement, some aspects of goods trade will still face the new barriers of trading on WTO terms.

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.