India’s Trade Facilitation for Services proposal draws mixed response

Several developing countries said that India’s Trade Facilitation for Services proposal would impose burdensome commitments on them


India explained that the underlying rationale of the TFS is to simplify procedures to ensure that market access for services remain effective and commercially meaningful. Photo: AFP
India explained that the underlying rationale of the TFS is to simplify procedures to ensure that market access for services remain effective and commercially meaningful. Photo: AFP

Geneva: India’s proposal on trade facilitation for services, which seeks to eliminate several hurdles in global trade in services, has received a mixed response from members of the World Trade Organization (WTO). Several developing countries said on Tuesday that it would impose burdensome commitments on them, according to negotiators familiar with the development.

India made a formal presentation of the 13-page draft legal text at a meeting of the WTO’s Working Party on Domestic Regulation on Tuesday. India explained that the underlying rationale of the TFS (Trade Facilitation for Services) which is drawn up on the lines of the Trade Facilitation Agreement for goods is to simplify procedures to ensure that market access for services remain “effective” and “commercially meaningful”.

India emphasized that the TFS “is not about new market access” for services. It argued that the draft legal text covering Mode 1 (cross-border services), Mode 2(consumption abroad) and Mode 4 (movement of short-term services providers or natural persons) is based “on a careful mix of certain mandatory obligations, and those qualified as ‘to the extent practicable,’ or as ‘endeavor’ obligations.”

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It provides for special and differential treatment provisions under which developing countries are offered a transition period while least-developed countries are exempted from undertaking any commitments arising out of the TFS agreement, India argued.

Major industrialized members such as the European Union (EU), Canada, Switzerland, Australia and New Zealand, among others, welcomed the Indian proposal, signalling their intention to discuss various issues set out in it. Australia posed around 25 questions on the Indian proposal, giving an impression that it would face rough weather in making progress, according to a services negotiator who asked not to be quoted.

Turkey praised the Indian proposal which covers several issues in Mode 4 and cross-border insurance. Turkey said it is ready to work on the basis of the elements proposed in the Indian proposal.

The EU welcomed India’s engagement in services, suggesting that the overarching notion in the Indian proposal is valuable and promising, the negotiator cited above said. The EU suggested that substantive issues in the Indian proposal must be discussed, pointing that substance should prevail over form.

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Switzerland said it would support the idea of TFS as proposed by India. It asked for a further clarification of several issues. Norway sought to know whether issues raised in the Indian proposal could be taken up along with other proposals to improve domestic regulation disciplines for trade in services.

China said the proposal demonstrates India’s intention to negotiate strong disciplines in domestic regulation.

But the US, which matters most in global trade in services and which is currently tightening the procedures for the movement of short-term services providers under its H1B visa regime, remained conspicuously silent.

Significantly, the Indian proposal was subjected to critical scrutiny by the African Group of countries, Bolivia, and Venezuela among others on grounds that it would impose burdensome requirements on developing countries.

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On behalf of the African Group, South Africa expressed sharp concern over the Indian proposal as it remains “broad” in its commitments without any prior mandate. South Africa said the Indian proposal would impose burdensome/costly multilateral obligations, suggesting that it cannot be fitted into the template for trade facilitation agreement for goods.

Instead of being a development-centered proposal, the TFS actually imposes onerous requirements on many African countries, particularly the least-developed countries, South Africa said. It maintained provisions such as creation of a “single window”, resolution of appeals on a fast track, and several other elements are costly and difficult for African countries to implement at this juncture.

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