WTO offers preference on services export to developing economies

AS part of efforts to aid the realization of its Bali Package, the World Trade Organisation (WTO), has unveiled plans to support the growth of services trade in least-developed countries (LDCs) by providing their services exports with preferential treatment.

   According to the WTO Services Council, the measures would aid the implementation of a key Bali decision in support of LDCs, which aims to enhance their participation in world services trade.

  Indeed, some preferences would include, expanding access for the temporary movement of businesspeople (Mode 4) from LDCs for a range of services professions and occupations; waiving fees for business and employment visas for LDC persons; not imposing economic needs and labour market tests for LDC members; and extending the duration of stay of LDC professionals in the markets of preference granting members. 

   These preferences will be implemented once these members have completed their domestic processes and have notified the WTO.

   At the meeting, over 25 members indicated services sectors and modes of supply” from LDCs1 to which they would give preferential treatment.

  In a video message to open the meeting, Director-General Roberto Azevêdo said: “It is vital that we implement all the elements of the Bali Package without delay — and particularly the decisions on LDC issues. The decision on Operationalising the LDC Services Waiver is one of these, and is extremely important. Services exports from LDCs are increasing rapidly, though of course they are starting from a very low base.

     We have a duty to support the growth of this sector. I urge potential preference-granting members to indicate where they intend to provide preferential treatment to LDC services and service suppliers. ”

   Chairperson Choi Seokyoung of the Republic of Korea reported a “very high level of engagement ” from developed and developing countries in a position to do so who considered treating services exports from LDCs more favourably than those of other WTO members.  In their indications, members addressed most of the 74 services sectors in which LDCs have requested preferences. 

   Members based their announcements on a collective request that the WTO Group of LDCs submitted on 21 July 2014, in which they indicated services sectors and modes of supply of interest to them.

   The WTO services agreement, the General Agreement on Trade in Services, specifies that each member shall provide non-discriminatory treatment to services and service suppliers of other WTO members (Most-Favoured Nation principle).

    The LDC Services Waiver, adopted at the WTO Eighth Ministerial Conference (MC8) in 2011, allows non-LDC members to grant preferences to provide all LDCs greater access to their markets. For the first time, this decision allows WTO members to deviate from their Most-Favoured Nation obligation under the services agreement.

  Furthermore, many WTO members mentioned various technical assistance initiatives to improve LDC services export capacity. 

  The initiatives include training programmes for LDC service suppliers and support to upgrade infrastructure. Some members announced new initiatives and measures. 

   In his concluding remarks, the chairperson noted that this meeting was “one important stepping stone towards the operationalization of the waiver, but not the final concluding step. Today’s indications show that we are firmly on the way of a joint journey ”.

   Bangladesh’s Minister for Commerce, Tofail Ahmed MP, spoke about the potential of services to support growth in his country.