(De-)Globalisation of trade and regionalisation: a survey ...
Leveraging Globalisation for Trade in Services
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Professor Centre for WTO Studies
description
Leveraging Globalisation for Trade in Services. Corporate Dynamism and Innovative Professionalism 39 th National Convention of Company Secretaries Agra 14 November 2011. Professor Centre for WTO Studies. INTRODUCTION IMPORTANCE OF SERVICES. Services : Their Economic Importance. India - PowerPoint PPT Presentation
Transcript of Leveraging Globalisation for Trade in Services
ProfessorCentre for WTO Studies
INTRODUCTIONINTRODUCTIONIMPORTANCE OF IMPORTANCE OF
SERVICESSERVICES
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IndiaTotal share of services in the GDP is
almost 57%
Services : Their Economic Services : Their Economic ImportanceImportance
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GATSGATS
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The BackgroundThe BackgroundGATS Framework
It envisages[Art. II]
According MFN treatment to all member countries[Art. III]
Maintain transparency in all measures of general application
[Art. IV]Progressive liberalisation
[Art. XVII]According same national treatment to
service providers from all member States22 April 2023
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The BackgroundThe Background
GATS FrameworkAlso provides for
Selective liberalisation of services for developing countries
Regulation of services provided by national and foreign service providers
May exclude trade in services in the larger social and national security interests
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The BackgroundThe BackgroundDoha Declaration – November, 2001
Article 15Negotiation on Trade in Service shall be
conducted with a view to:A.Promoting economic growth of trading partnersB.Development of developing and least developed countries [LDCs]C.Guidelines and procedures adopted for negotiations by the Council for Trade in Service in March, 2001 reaffirmedD.Submit Initial Request for specific commitment by 30th June, 2002 and Initial Offers by 31st March, 2003E.All negotiations should be completed by 2005
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How to make commitments
Schedule of commitmentsA positive aspect
A government makes commitments only for those
sectors it wishes to openA negative aspect
a listing of all the conditions (or limitations) a country intends to
place on trade in services (regarding market access,
national treatment and others)
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Modes of Supply of Modes of Supply of ServicesServicesMode 1Mode 1
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Country A
Country B
Service Provider
Consumer
Modes of Supply of Modes of Supply of ServicesServicesMode 2Mode 2
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Country A
Country B
Service Provider
ConsumerConsu
mer
Modes of Supply of Modes of Supply of ServicesServicesMode 3Mode 3
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Country A
Country B
Service Provider
Consumer
Modes of Supply of Modes of Supply of ServicesServicesMode 4Mode 4
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Country A
Country B
Service Provider
Consumer
Service Provider
Modes of Supply of Modes of Supply of ServicesServicesMode 4Mode 4
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Country A
Country B
Service Provider
Consumer
Service Provide
r
Modes of Supply of Modes of Supply of ServicesServicesMode 4Mode 4
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Country A
Country B
Service Provider
Consumer
Service
Provider
World Trade in Services World Trade in Services Source: WTO,2005
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Rights and Obligations Rights and Obligations under GATSunder GATS
Progressive Liberalization (Article XIX)In each successive round of negotiation and should be done in a way to promote economic growth of all trading partners
and development of developing countriesThe basic aim being to reduce any
measures that have a trade distorting effect and at the same time respecting
each individual national policy objective
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Rights and Obligations Rights and Obligations under GATSunder GATS
Transparency (Article III)Each trading partner is under an obligation to notify and identify its regulations, policies or administrative procedures that might affect
services or service providers in any way to the Council on Trade in Services
Under this governments are to maintain an inventory of all the regulations that affect
services and establish Enquiry points to which trading partners can address their queries to
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Rights and Obligations Rights and Obligations under GATSunder GATS
Most Favored Nation (Article II)
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Rights and Obligations Rights and Obligations under GATSunder GATS
National treatment (Article XVII)
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Mutual Recognition Mutual Recognition AgreementsAgreementsArticle VII
Allows scope for recognition of education or other qualifications obtained by an individual supplier in
other member states, without MFN obligationsSuch recognition can be granted through agreement
or on autonomous basisProvidedProvided
such recognition is not on exclusive basis, i.e. members are given opportunity:
to negotiate their accession to such agreements; orto demonstrate that their requirements be
recognised as welloverall trade barriers are not raised for non-
participants
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Domestic Regulations Domestic Regulations
Purpose of regulationThe right of the member to enforce
domestic policyTrading partners need to be aware of the
state of playExpected efficiency gains from
liberalisation made without compromise on quality or other policy objectives
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Domestic RegulationsDomestic RegulationsDisciplines
Needed to ensure regulations do not act as barriers to tradeHence a three step test envisages that domestic regulations
are:Based on objective and transparent criteria, such as
competence and ability to supply the service;Not more burdensome than necessary to ensure quality of
the service;In the case of licensing procedures, not in themselves a
restriction on the supply of the service
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Domestic RegulationsDomestic Regulations
Mandate for disciplines onQualification Requirements and
Procedures (QRP)Licensing Requirements and
Procedures (LRP)Technical Standards
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Services Services NegotiationsNegotiations
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Mechanism of negotiationMechanism of negotiationRequests and Offers
Requests made on individual trading partners on bilateral or plurilateral basisOffers made to all member states on
multilateral basisOffers and commitments
Offers are documents for negotiations and can be altered
Commitments are binding22 April 2023
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Mechanism of negotiationMechanism of negotiation
InterestsOffensiveDefensive
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Mechanism of negotiationMechanism of negotiation
Offensive InterestsIdentification of interestsAssessment of regulatory
regime in target marketBe ready for reciprocal
demands in the same or other sectors
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Mechanism of negotiationMechanism of negotiationDefensive Interests
Identification of interestsAssessment of the extent to which domestic regulations can protect the
sectorLook for suitable regulatory modifications
In an expanding market condition, domestic market generates offensive
interest22 April 2023
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Mechanism of negotiationMechanism of negotiationBalancing Interests
Sectoral interests need not match national interests
Sectoral interests can be sacrificed if overall interest served on the balanceSectoral definitions not harmonised
across jurisdictions:Hence negotiations can be complicated
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Issues/ConcernsIssues/ConcernsUnknown territory
first time negotiation on servicesMethodology for Negotiations
still evolvingdefinitions being modified
Long term impactEconomic, social & culturalLack of information
Service providers, local regulations, etc.
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Issues/ConcernsIssues/ConcernsAdvantage developed
countries!More sophisticated economies
have more sophisticated:Negotiating strategies
Regulatory regimesDatabases
Legal systemsAcademic and research backup
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Issues/ConcernsIssues/ConcernsAdvantage developed
countries!Developed economies offer:
More services in tradeMore reciprocal opportunities at
lower end of the value chainMay lock in the upper end of the
value chain though22 April 2023
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Issues/ConcernsIssues/ConcernsChanges in Policy will be
necessitatedto regulate foreign service providers
No regulatorsMany sectors do not have national
level regulatorsDifficult to monitor
Intangible nature of Services22 April 2023
Thank youThank you
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