At the High-Level Meeting of the WTO Council for Trade in Services held this February, over 25 Members indicated concrete offers to grant preferential access to LDC services suppliers to their markets. Their swift implementation will require Members to complete their domestic processes and formally notify their offers to the Council by the deadline of July 31st. It is hoped that no country will hide behind the best endeavour nature of the deadline.
GENEVA. At the High-Level Meeting of the WTO Council for Trade in Services held this February, over 25 Members indicated concrete offers to grant preferential access to LDC services suppliers to their markets. Their swift implementation will require Members to complete their domestic processes and formally notify their offers to the Council by the deadline of July 31st. It is hoped that no country will hide behind the best endeavour nature of the deadline.
Back in 2011, Ministers at the 8th WTO Ministerial Conference adopted a waiver to enable developing and developed-country Members to provide preferential treatment to LDC services and service suppliers for a period of 15 years, in order to promote their trade in services sectors and modes of supply that are of particular interest to them. Importantly, this is a unilateral extension of preferences to LDCs. Two years later at the Bali WTO Ministerial, noting that no member had yet extended or made use of the services waiver since its adoption, Ministers instructed the WTO Council for Trade in Services to initiate a process aimed at promoting the expeditious and effective operationalization of the waiver. It was agreed that the process would entail the tabling of a collective request by the LDC group highlighting the sectors and modes of supply of export interest to them. A high-level meeting would then be convened for Member countries in a position to do so to respond the collective request by indicating sectors and modes of supply where they intend to provide preferential treatment to LDCs.
The LDC group circulated its collective request in July 2014, focusing on 74 priority sectors including travel and tourism; ICT and other business services; banking; transportation and logistics; education and training, and creative industry services. A major hindrance identified in the request was the expensive application fees for visas, licenses, and residence and work permits, which for many LDC suppliers are tantamount to one month’s salary for their families, and a severe loss if the visa is not granted and the fees are not returned. On February 5, 2015, the WTO Council for Trade in Services convened the High-Level Meeting of the WTO Council for Trade in Services where preference-giving countries were expected to make their indicative offers.
At the opening of the high-level meeting, Hon. Amelia Anne Kyambadde, Trade Minister of Uganda (current coordinator of the LDC Group at the WTO) was optimistic that “LDCs can celebrate by coming out of this High Level meeting with concrete commitments in the form of market access and beyond market access preferences responding to our collective request.”
Indeed, the meeting saw some concrete market access offers by over 25 members, including on the presence of natural persons (Mode 4), which is the main interest of LDCs.
In particular, India made a positive impression by announcing substantial offers in market access, especially regarding the presence of natural persons (Mode 4). In this regard, it announced its intention to waive visa fees to LDC applicants coming for business, as well as to grant access to LDC contractual service suppliers and independent professionals in a number of sectors. These include engineering, computer reservation systems, management consulting, hotel and lodging, travel agencies and tour guides among others. The offer also included a capacity building component, featuring vacancies for 200 teachers, support in participation of business fairs etc.
The membership also agreed to Minister Kyambadde’s request to assess the results of the high-level meeting at the next meeting of the Council on Trade in Services of March 19. It was also decided that preference-giving Members will endeavour to submit their formal notifications no later than July 31st, 2015.
“It is now hoped that members who have announced offers will formally notify the Council by the agreed deadline, and refrain from hiding behind its best endeavour nature”, said Julien Grollier, Assistant Programme Officer at CUTS International, Geneva.
In the coming weeks, the LDC group will hold a retreat to assess the offers tabled during the High-Level Meeting, in preparation to the next meeting of the WTO Council on Trade in Services. In the meanwhile, WTO Members who tabled offers – and those yet to do so – should ensure the rapid completion of domestic processes so as to be able to formally notify their commitments to the Council by the deadline of July 31st. This would give the world a strong signal that, despite its recent hiccups, the WTO is back on track and fully committed to its development promise.
The entry into force of such preferences, by itself, will however not be enough for the poorest countries to develop their services sectors and take advantage of trade in services. In fact, a number of domestic challenges continue to hamper effective policy-making in this area. This includes the lack of reliable data, weak capacity to analyse it and take appropriate policy decisions, limited understanding of the pathways through which services competitiveness can be enhanced etc.
Some existing initiatives are striving to help them build the necessary capacities to overcome these challenges, including a joint project by three international NGOs funded by the Trade Advocacy Fund of the UK. Under the “Support to Enhance Development of Trade in Services Negotiations” initiative, ILEAP, CUTS International Geneva and the University of Sussex’s CARIS are undertaking a series of interventions that seek to improve the institutional mechanisms, the collection and use of services statistics, as well as understanding of services competitiveness issues. A workshop is expected to be held in the East African Community (EAC) this spring.