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India revises draft plan on trade facilitation for services

Livemint:  August 07, 2017

Geneva: India has moderated the level of ambition in its proposal on trade facilitation for services (TFS) at the World Trade Organization (WTO) by informing its counterparts that the proposed TFS agreement will only apply to the existing commitments scheduled under the General Agreement on Trade in Services (GATS), according to the latest proposal reviewed by Mint.

After facing headwinds from both developing countries, including allies such as South Africa, as well as many industrialized countries on the earlier TFS proposal, India has now floated a revised draft proposal which is largely moderated so that it remains as a bargaining chip during the current negotiations on the domestic regulation barriers in services, according to a trade official who asked not to be quoted.

In the 18-page restricted job document issued on 27 July, India has maintained that it is “in the spirit of constructive engagement.”

“India has sought to refine the TFS text by making changes to incorporate the various comments and suggestions raised by members in order to make the TFS text more meaningful and acceptable,” it suggested.

Further, India ensured that the proposal is in line with the ongoing negotiations on domestic regulation that are based on the revised draft texts issued by two chairs during 2009 and 2011. The proposed changes include that “the TFS agreement is being limited to commitments that are scheduled under GATS, with the exception of Art. 8.2 (dealing with Mode 2 movement for persons seeking medical treatment).”

In the first draft circulated last year, India had said “Article 2 on Publication had also been made applicable to all sectors, whether or not scheduled.” “But we have now limited Article 2 also to scheduled commitments,” India said in its latest proposal, suggesting that the proposed TFS is primarily aimed at making scheduled commitments more effective.

In a similar vein, India’s initial draft had used the term “immigration formalities” to refer to entry measures (visas, work permits, etc.) which are relevant for the entry of short-term service providers offering services for specific durations. This term is being replaced with the phrase “measures relating to entry and temporary stay”, given the various sensitivities expressed by several members associated with the term “immigration”, India maintained.

“However, we have in this revised draft limited Article 3 on “Administration of Measures” to the two main types of measures affecting supply of services, namely: authorisation and measures relating to entry and temporary stay,” it argued.

The term “authorisation” refers to permits/licences, etc. required for a service, and “measures relating to entry and temporary stay” pertains to visa/work permits required for Mode 4 movements.

The reason for limiting Article 3 to only two types of measures, India said, is because this provision deals with “administration” related aspects, and places several onerous requirements relating to timeframes, and procedural requirements for dealing with applications, etc. “Since the main thrust of concern on TFS is measures pertaining to authorisation and measures relating to entry and temporary stay, we have limited this provision accordingly.”

The main objective, according to India, is to ensure that existing scheduled commitments by members in the GATS are made “more effective.” India has clarified that the term “immigration facilities” such as visas, work permits that are relevant for the entry of natural persons under Mode 4 of the GATS in the original draft proposal is now replaced with the phrase “measures relating to entry and temporary stay.” This would address the “sensitivities” expressed by members associated with the term “immigration,” India has argued.

In response to concerns raised by the African Group about the right to regulate trade in services, the revised draft says “recognizing the right to regulate, and to introduce new regulations, on the supply of services within their territories in order to meet national policy objectives and, given asymmetries existing with respect to the degree of development of services regulations in different Members, the particular need of developing countries to exercise this right.”

India has argued that the proposed TFS agreement “should not be construed to prescribe or impose particular regulatory approaches or any particular regulatory provisions in relation to measures affecting the supply of services.”

By re-calibrating its proposal, India has retrieved a lot of ground and ensured that the proposal remains a strong bargaining chip during the negotiations on domestic regulation barriers in services ahead of the WTO’s eleventh ministerial meeting in Buenos Aires later this year. A group of industrialized countries and their allies in the developing world are seeking transparency-related improvements without addressing the main barriers faced by countries such as India in the movement of short-term services providers, said a trade analyst, who preferred not to be quoted.

The US, which is tightening the provisions on H-1B visas for short-term services providers is likely to oppose India’s latest proposal on TFS even though it has lowered the level of ambition, the analyst said.

Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.