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G. Srinivasan

New Delhi, July 23 With India’s services exports at $86 billion in 2007-08 and accounting for 40 per cent its aggregate exports of goods and services, the stakes for India on Friday’s ‘Signalling’ conference in WTO assumes significance.

WTO members would be likely to signal where and how they plan to improve access to their services markets for the other WTO members to ensure a proper balance between the three central parts of negotiation on agriculture, industrial goods and services at this stage.

Already developed countries representing the European Union (EU) made it plain that on top of its “unparalleled offer” on services, it is “ready to go even further, especially on developing country priorities, so long as we get clear commitments to proportionate offers from others”.

In the crucial Trade Negotiations Committee meeting of the WTO in Geneva, the US Trade Representative Ambassador, Ms Susan C. Schwab, said that ‘a successful outcome of the signalling conference on services is crucial to our work”.

India’s services exports remain mainly in the information technology and IT-enabled sectors, travel and transport and financial sectors with the main destinations including the US (33 per cent), the EU (15 per cent) and other developed countries. India has ‘autonomously’ liberalised its services trade across the board, with notable market access granted in core areas of interest to advanced countries encompassing telecommunications (74 per cent of FDI), financial services (26 per cent FDI in insurance, 74 per cent in private banks, 100 per cent FDI in asset management firms), retail (51 per cent FDI for single brand retailing), courier services (100 per cent FDI). Last week the Union Commerce and Industry Minister, Mr Kamal Nath, said “India is ready to further signal new sub-sector and making improvements in sub-sectors already offered”. But these “signals” remain contingent on the developed countries addressing India’s interests in Modes 1 (provision of a service across a national border such as an Indian doctor giving medical advice to his client in the US or Europe) and four (temporary presence of an Indian computer engineer in Europe to complete an IT project). India has unequivocally made it clear that these are necessary and ‘must haves’ to address the development dimension of the Doha Round.

Despite this strident posture before the crucial meeting, there are some genuine apprehensions that India has not much of a wriggle-room to demand “a special footing” even as it is providing ‘substantial new market access to the developed countries in agriculture and non-agricultural market access (NAMA)”.

A new report on services, in the form of a ‘text’ issued by the Chair of the Services Negotiations Ambassador, Mr Fernando de Mateo of Mexico, has been agreed to at a July 15 meeting of Ambassadors of the so-called “Enchilada Group”, comprising the US, the EU, Japan, Canada, Brazil, India, China, South Africa, Pakistan, the Philippines, Indonesia, Malaysia, Thailand and others. But the report was opposed by Venezuela, Bolivia and Cuba.

Though there was no agreement on its contents at an informal meeting on services held in Geneva on July 17, trade policy analysts and non-governmental organisations (NGOs), currently camping in Geneva, told Business Line that the services text has been put forward with the Chair passing the text as report.

What is objectionable, they contend, is that the text is a big compromise because Para 4 in the draft text asks members to bind the current level of autonomous liberalisation.

The wordings in Para 4 that members shall to the maximum extent possible respond to the bilateral and plurilateral requests by offering deeper and or wider commitments and such responses, where possible, substantially reflect current levels of market access and national treatment and provide new market access and national treatment in areas where significant impediments exist, in sectors and modes of supply of export interest to developing countries such as modes 1 and 4” could be a double-edged tool.

As it promises relief to service exporters like India specialising in Modes 1 and 4, it has also extracted firm commitments on the current autonomous liberalisation in health, telecom, financial and courier services India has already provided, besides seeking and deeper wider commitments in these areas.

Trade policy experts are of the view that even as hardened positions in agriculture and NAMA talks had led to breakdown of green room meeting in Geneva on Wednesday, India should be cautious in treading on the path of services negotiations with greater focus to secure its fundamental interests without imperilling its policy space for future course of action or correction if the domestic situation so warranted.

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