Economy

India opposes binding pact on open services trade at WTO

Amiti Sen New Delhi | Updated on October 23, 2020 Published on October 23, 2020

New Delhi insists on flexibility on movement of professionals

In an effort to help governments address climate change goals and the global impact of Covid-19, five members — Australia, Canada, Mexico, New Zealand and Switzerland — have pitched for a greater opening of architectural design, engineering, consulting, and construction services at the World Trade Organisation (WTO).

The pitch, made at the ‘Trade in Services’ negotiations at the WTO this week, led to a mixed reaction from members with India reminding everyone the importance of built-in flexibilities for developing countries provided by the General Agreement for Trade in Service (GATS), a Geneva-based trade official told BusinessLine.

In their joint paper, Australia, and the four other members, said its objective was to make environmental-related services trade more affordable through increased market opening by WTO members.

Climate-neutral status

The paper got the support of a number of delegations including Brazil, China, Chile, the EU, Japan and the UK, which expressed their interest on the matter. The EU said that environmental protection was in line with the European Green Deal and it also matched its goal of achieving climate-neutral status by 2050.

India informed members that all negotiations in the area of services have to recognise the special status of developing countries and least-developed countries (LDCs) and extend flexibilities to them.

Low bar on LDS

This means that the commitments that developed nations would take on under GATS, will not be matched by developing countries, including India, who would take on relatively lesser obligations.

New Delhi added that there was a need to start serious discussions on Mode 4 of the services negotiations related to easier movement of professionals. Other delegations, such as Barbados, Fiji and South Africa, on behalf of the African Group, said that developing countries need to be assisted to increase their share of environmental-related services exports, build capacities and address their infrastructural constraints.

Warning against attempts to bind the existing levels of levels of commitment, South Africa said it would not help in this regard and liberalisation will not address the trade-distortive effects of governmental subsidies.

These negotiations are important as attempts are being made at various forums of the WTO to shortlist issues that can be taken up for decisions at the next Ministerial meeting. The Ministerial scheduled in June, 2020 had to be postponed due to the Covid-19 pandemic and the WTO administration is now hopeful of holding it next year.

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Published on October 23, 2020
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