Title:Services Negotiations in Doha Round: Concerns of South Asia
Pranav Kumar. CUTS Centre for International Trade, Economics & Environment, India. Email: citee_at_cuts-international.org. Presentation Coverage. Global trade in services ... – PowerPoint PPT presentation
Title: Services Negotiations in Doha Round: Concerns of South Asia
1 Services Negotiations in Doha RoundConcerns of South Asia
WTO Doha Round and South Asia Linking Civil Society with Trade Negotiations
9-10th March 2005
Colombo Sri Lanka
CUTS Centre for International Trade Economics Environment India
2 Presentation Coverage
Global trade in services
Services sector in South Asia
A recap of the services negotiation in WTO
Current status of services negotiation in WTO
South Asian strategy in the Doha round
South Asias major interests
3 Global Trade in Services (some features)
Trade in services has grown faster than merchandise
60 of global output
30 of global employment
20 of global trade
World services trade growth 155 between 1990-2002 mfg. 97 and Ag. 40
4 Global trade in services (contd.)
The composition of FDI has shifted towards services
Early 1970s one-quarter of the world FDI
1990 less than one-half
2002 two-third of total FDI
The composition of services FDI is also changing
5 Global Trade in Services (contd.)
Developing countries share has increased
In last 15 years - a four fold increase in services export from developing cts.
Increase in share in global services exports 14 in 1985-89 to 20 in 2000.
Share in global outward FDI in services climbed from 1 in 1990 to 10 in 2002.
6 Global Trade in Services
Holds an immense potential in terms of further expansion of world trade
By 2050 the world services exports would exceed merchandise
In case of USA this situation would come much earlier by 2037
7 Global Trade in Services
Developing countries likely to benefit more
Global gain of 260bn p.a. by eliminating all post UR barriers 1/2 of it from services (Dee et al 2000).
Benefits vary from under 1 to over 50 of GDP (GEP 2002 WB)
Significant gain for DCs 1.6 (India) to 4.2 of GDP if tariff-equivalents of protection cut by 1/3 in all countries (Chadha et al 2000)
Increased developed countries quotas by 3 of their labour force generates gains of 150bn p.a. (Winters et al 2002)
8 Services Sector in South Asia
Important sector in terms of its contribution to GDP ranging between 40-50 .
Second most important sector after agriculture in providing employment
Remittances South Asia is the second largest remittance recipient area (20)
Greatly endowed in semi-skilled and unskilled labours
9 Services Sector in South Asia (contd.)
Except India and Sri Lanka other three countries witnessed a decline in their services export in post WTO period.
10 Services Sector in South Asia
Bdesh and Pak are net importers while India S.Lanka Nepal have trade surplus.
Services Exports and Imports in mn 2003
11 Services Sector in South Asia
Except India others have advantage only in mode 4. Indias interest lies in mode 1 and 2 in addition to Mode 4.
12 Services Negotiations in the WTO
Initially many countries were skeptical and opposed
High degree of flexibility in rules and market access
UR only a beginning GATS required more negotiations
Further negotiations started in 2000
End of 1st Phase In March 2001 adoption of negotiating guidelines and procedures
DDA and July Package
13 March 2001 Negotiating Guidelines and Procedures
Adoption of request-offer approach for negotiating new specific commitments on
Mandate members to continue negotiations on outstanding issues
Emergency Safeguard Mechanism (ESM)
Disciplines on domestic regulation
Disciplines on govt. procurement and subsidies
14 Services in Doha Dev. Agenda
March 2001 guidelines as the basis for continuing the negotiations
To pursue Art. XIX objective of progressively higher levels of lib. of trade in services.
Flexibility for DCs - freedom to open fewer sectors progressive ext. of market access
The mandated neg. was supposed to conclude on 1 January 2005.
15 Services in July Package
Fresh deadline for submission of revised offers
Stress on high-quality offers particularly in sectors and modes of export interest to DCs
Special attention to be given to LDCs
Emphasis on mode 4
To intensify efforts on rule-making under GATS
Targeted technical assistance to DCs
16 Current Status of Negotiations
The services negotiations are in a bad situation. If there isnt a decent services package at the end of the day its very difficult to imagine any meaningful outcome on other items
---- Hamid Mamdouh Director of
WTO Trade in Services Division
What we have on table is very poor. We have a daunting task over the next few months.
---- Alejandro Jara Cman of CTSSS
17 Current Status of Negotiations
Nearly two years after the deadline for countries to make initial offers only 47 have submitted
Most of the offers put forward to date are horizontal in nature and lack sectoral commitments
The three most popular service sectors in regards to improved offers are financial telecommunication and business
18 Current Status of Negotiations
USA expressed its inability to table a better offer in Mode 4.
Only in the area of domestic regulation some momentum has built up.
Before the May 2005 deadline for first or revised offers and the next services cluster in June several informal meetings have been planned.
A special session on LDCs shall be held in next services cluster.
19 South Asias Strategy in Doha Round
India has been very proactive. Made its initial conditional offer in January 2004
Sri Lanka also made its initial offer in September 2003.
Bangladesh and Nepal are exempt from making any offers.
Pakistan is yet to make its initial offers.
20 Indias Strategy in Services Negotiations
Probably the first DCs to make a comprehensive submission on Mode 4 in Nov. 2000
Offered to undertake extensive commitments under Mode 1 4
substantially improved access to some critical service sectors.
India signed a joint statement with 15 other countries urging CTSSS to accelerate services negotiations
21 South Asias Major Interests
India Mode 1 2 4
Sri Lanka and Nepal Mode 2 4
Pakistan and Bangladesh Mode 4
22 Major Hurdles Under Different Modes of Supply
Economic Needs Test
Strict visa procedures
Non-recognition of professional qualifications
Imposition of discriminatory standards or burdensome licensing requirements
Payment of social security without corresponding benefits
Requirement of registration with or membership of professional organisation
23 Major Hurdles Under Different Modes of Supply
US federal or state govt. reimbursement of medical expenses is limited to licensed certified facilities in the US or in a specific state.
Lack of long-term portability of health coverage for retirees from OECD countries.
24 Major Hurdles under Different Modes of Supply
Legislation by many US states to ban outsourcing of government contracts
Europe introduced a legal norms called Transfer of Undertakings and Protection of Employees to protect workers in outsourced deals.
25 Systemic Problems in Services Negotiations
Negotiations proceed through a laborious process of requests and offers.
Definitional Issues in Mode 4 lack of uniform definition statistics not compiled according to mode 4 criteria time-period of temporary movement
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