In the Services Council, members also addressed implementation issues from the 12th Ministerial Conference (MC12) related to WTO reform and pandemic response, the Least-Developed Country (LDC) Services Waiver — which seeks to boost the participation of LDCs in services trade — and the E-commerce Work Programme. Also under consideration were various concerns reiterated by members regarding measures affecting trade in services.
WTO reform
The WTO Secretariat detailed how the Council for Trade in Services and its most active subsidiary body, the Committee on Specific Commitments, function. Members commended the recent improvements in the functioning of the Council and put forward additional ideas for further improvements.
Pandemic response
Pandemic response was also discussed in the Council on 12 June. In addition to engaging in the first of a series of experience-sharing sessions on the impact of COVID-19 on trade in services (see below), members continued discussions on two submissions from India calling for dedicated discussions on the role of telemedicine services in response to the COVID-19 pandemic and on the possibility of building a pool of health professionals to respond effectively to pandemics.
While some members noted the importance of discussing these topics in the wake of the COVID-19 pandemic, others questioned the relevance of the WTO’s General Agreement on Trade in Services (GATS) to some of the issues raised and noted that the experience-sharing session on health services that already took place in the Council provided an opportunity to discuss relevant issues.
Transport and logistics services in the wake of COVID-19
On 13 June, WTO members discussed the implications of the COVID-19 pandemic for transport and logistics services in an informal experience-sharing session. This is part of the work on the WTO response to pandemics, which ministers mandated at MC12 a year ago. Under discussion were the main challenges members encountered, the trade-facilitative measures governments introduced in the wake of the pandemic, and the implications of the crisis, specifically for LDCs.
In a presentation, the WTO Secretariat said that transport services were heavily affected by the COVID-19 pandemic. Trade in these services recorded a 37 per cent decline between the first quarter of 2021 and the first quarter of 2022. Supply and demand shocks and COVID-19 restrictive measures led to drastic fluctuations in sea cargo volumes and prices, extensive bottlenecks across the maritime supply chain, and a dramatic fall in air passenger transport. They also led to significant imbalances in the air cargo market, severe financial losses, and shortages of drivers for road transport.
Several members from different geographic regions and levels of development shared their own experience. Among the challenges faced during the pandemic, WTO members cited fluctuating costs, limited transport modalities, shortage of workers, and border closure leading to port congestion and delays. Landlocked developing countries and fragile transport and logistics markets in African countries faced particular difficulties. Consumers’ increased reliance on e-commerce added further pressure, even if it represented a source of sustained demand.
In spite of these challenges, COVID-19 also provided opportunities. It reinforced market trends and transformations that were already evident before the pandemic. As one speaker said, “COVID-19 was one of the greatest digitisation pushes the world has ever seen.” It accelerated the uptake of digital technologies, for instance, to optimise parcel packing, shipment tracking and tracing, and, more generally, to increase operation efficiencies. The importance of implementing the WTO’s Trade Facilitation Agreement was also stressed.
Trade in financial services
A seminar on “Financial Services: Trade, Sustainability and Accessibility” took place under the auspices of the Committee on Trade in Financial Services on 14 June. Participants looked at women’s economic empowerment and financial inclusion, including the role that digital technology can play in supporting marginalized groups in accessing financial services. The seminar also explored national and international initiatives to foster access to financial services. National regulators, academics, as well as representatives from international organizations and the private sector featured among the panellists. The programme and the presentations are available here.
At a meeting of the Committee held on 15 June, members agreed to follow up on the seminar by zooming in on those issues that may warrant further examination and experience sharing. The Committee also considered a proposal from India and the Philippines to organize a thematic seminar on cross-border remittance services.
The Committee on Trade in Financial Services is one of the Services Council’s subsidiary bodies.
Exemptions from MFN principle
The Services Council reviewed nearly 600 exemptions in members’ services schedules from the WTO’s MFN principle, under which members are normally prevented from discriminating between WTO members. The purpose of the review is to examine whether the conditions creating the need for the exemptions still prevail and to determine the date of any further review. Members highlighted the importance of engaging in the review and stressed the need for members to eventually reduce exemptions in place. Written questions were submitted in advance of the review and several delegations provided answers in writing or at the meeting, contributing to enhanced transparency with regard to MFN-inconsistent measures.
The list of members’ exemptions can be found here. The latest review took place in 2016. The Council decided to defer the decision on the date of a next review to 2028.
E-commerce Work Programme
As part of an experience-sharing exercise taking place in the Council, Jamaica detailed the Jamaica Digital Exchange, which legalises a central bank digital currency, and the Jamaica Business Gateway, a centralized online platform for businesses launched last month. These initiatives seek to facilitate digital inclusion, ease business operations and support Jamaica’s transition to a digital economy.
India presented its “Digital India” initiative launched in 2015 to widen the availability and use of services resources and facilitate electronic transactions. It is centred on the availability of digital infrastructure — including high-speed internet and mobile banking — the availability of governmental services — including for health services — and the digital empowerment of citizens, notably by widening digital literacy.
Operationalizing the LDC Services Waiver
Also in the Council, the WTO LDC Groupsaid it is finalizing a submission on implementing the MC12 Outcome Document’s paragraph 8 related to the LDC Services Waiver. In addition,members took note that a seminar on improving data collection in LDCs will take place in early October. More disaggregated and bilateral services export data for LDCs is expected to help assess the impact of the preferences notified by WTO members.
A total of 51 members have notified preferences for LDC services and service suppliers under the Services Waiver. The waiver was formalized by a decision adopted at the 2011 Ministerial Conference.
A total of 36 WTO members are classified as LDCs. More information on the waiver can be found here.
Services trade concerns
Members discussed four specific trade concerns previously addressed in the Council involving cybersecurity measures and 5G-related measures, among other services-related topics.
Japan and the United States, echoed by some other members, reiterated concerns about the cybersecurity measures of China and Viet Nam. China recalled its concerns about Australia’s 5G measures and repeated concerns with certain measures of the United States. China also reiterated its concerns regarding India’s measures in relation to mobile applications.
The impact of decarbonization on transport services
Separately, the impact of decarbonization on transport services was the focus of a webinar organized by the WTO’s Trade in Services and Investment Division on 13 June as part of the “Simply Services” series. Underscoring the many initiatives to reduce greenhouse gas emissions in the transport sector, experts from the transport industry discussed their implications for their sector as well as for trade costs, trade flows, transport networks and connectivity. Also under discussion were policies which could help address the subsequent challenges that the industry and policymakers are facing. More information is available here.
The “Simply Services” speaker series is an informal platform for sharing the latest information on trends in services trade. It was launched for the first time five years ago.
More information on the series is available here.
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