Around 72 nations have agreed to enhance commitments in services under the General Agreement on Trade in Services (GATS) to facilitate non-goods trade among themselves and have extended similar concessions to all members of the World Trade Organisation (WTO).
Addition of Obligations
These nations have incorporated additional obligations in their schedules in GATS, aiming to alleviate the unintended trade-restrictive impacts of measures concerning licensing requirements, qualification procedures, and technical standards among themselves.
Principle of Application
The disciplines will be applied on a “most-favoured nation” principle, ensuring benefits for all WTO members. This equalizes opportunities for Indian professional companies to access markets in these 70 countries if they meet the stipulated standards. These obligations are termed Services Domestic Regulation (DSR) and became effective during the 13th Ministerial Conference of the WTO.
Cost Reduction and Savings
According to a new WTO research, the implementation of new obligations will lead to a reduction in services trade costs by 10% for lower-middle-income economies and 14% for upper-middle-income economies, resulting in overall savings of $127 billion.
Projected Increases
By 2032, it is projected that global real income will increase by at least 0.3%, equating to $301 billion, and global service exports are expected to rise by 0.8%, amounting to $206 billion.
Participating Nations
The nations involved in this initiative include Albania, Argentina, Australia, Bahrain, Brazil, Canada, China, Colombia, Costa Rica, Japan, Korea, New Zealand, Norway, Saudi Arabia, Singapore, Switzerland, the United Arab Emirates, the UK, and the US.
Initiation and Negotiations
The negotiations for this initiative were initiated during the 11th Ministerial Conference in Buenos Aires in 2017. India advocated for these unilateral commitments to be multilateral and extended to all members, a proposal that was agreed upon in January of the following year.
Multiple Choice Questions (MCQs):
- What is the primary objective of the nations’ agreement to enhance commitments in services under GATS?
- A) To restrict trade barriers among themselves
- B) To facilitate non-goods trade among themselves and extend similar concessions to all WTO members
- C) To increase tariffs on services
- D) To limit market access for Indian professional companies
- What principle governs the application of the new obligations under GATS?
- A) National treatment
- B) Most-favoured nation
- C) Preferential treatment
- D) Bilateral agreements
- According to the WTO research, what are the projected reductions in services trade costs for upper-middle-income economies due to the implementation of new obligations?
- A) 10%
- B) 14%
- C) 20%
- D) 5%
- When did the negotiations for this initiative begin?
- A) 2015
- B) 2016
- C) 2017
- D) 2018