Director-General of the World Trade Organisation Ngozi Okonjo-Iweala speaks during the opening ceremony of the WTO ministerial meeting in Abu Dhabi, United Arab Emirates on February 26, 2024.
| Photo Credit: Reuters

Trade in services such as movement of skilled professionals accounts for over 20% of the global commerce but the sector is still not getting sufficient attention in the negotiations of the WTO, according to experts and officials.

The experts also said that developed or rich member nations of the World Trade Organisation (WTO) are only interested in pushing their own non-trade agenda and not focusing on issues which really need special focus of the Geneva-based multi-lateral body.

Also read: WTO MC13 | What’s on the agenda for India?

Trade Ministers and officials of the 166-member WTO are gathered here to discuss wide ranging issues such as agriculture, and fisheries subsidies.

The 13th ministerial conference (MC13) of the WTO on Feb. 28 entered the third day. MC is the highest decision making body of the global trade watchdog.

“There are enough issues related to trade are there to discuss in the WTO like sanitary and phytosanitary issues, technical barriers to trade and mutual recognition agreements (MRAs), but the developed nations want to push new issues,” an international trade expert, who did not wish to be named, said.

Sharing similar views, an official said that there are no discussions on services trade in terms of how this can be improved.

“There are no talks on that. They are not talking about MRAs, about mobility issues, how the mobility issues will be tackled. They are not discussing the issues which are restrictive for the developing nations,” the official said.

Another expert said that issues like the movement of care-givers from emerging nations to rich nations needs attention as countries like India have demographic dividend for another 25 years and the EU has demographic deficit.

“But they are not willing to accept immigration or mobility rules,” the official added.

Economic think tank Global Trade Research Initiative (GTRI) said that services trade account for over 20% of the world trade and despite that it is mired in non-transparent domestic regulations that impede the cross-border trade.

“It receives far less attention at WTO meetings resulting in insignificant progress on critical issues of importance to developing countries. The only issue that gets priority treatment is extension of the moratorium on customs duties on electronic transmissions as it is of interest to the USA, EU and other developed countries,” GTRI Founder Ajay Srivastava said.

The customs duty moratorium is a temporary measure to prevent countries from imposing import taxes on digital products like software, music and movies.

India, Indonesia, South Africa and many other countries are opposed to the extension which has been renewed every two years since 1998.

“However, it is expected that extension may be agreed for another two years in the spirit of bonhomie and consensus building,” Mr. Srivastava said.

He added that so far there is no progress in the MC13 on a proposal of the G-90 (group of 90 nations which consists of developing countries) for enhancing existing flexibilities and exemptions for developing countries in the General Agreement on Trade in Services (GATS).

“This could involve longer transition periods for implementing GATS commitments, greater flexibility in domestic regulations affecting services and technical assistance, and capacity building for developing countries,” Mr. Srivastava said.

India had earlier floated a proposal on trade facilitation in services (TFS).

India’s objective behind this proposal is to initiate discussions on comprehensively addressing the numerous barriers — both at the border and behind it — that hinder the full potential of services trade across all modes of supplies.

“The TFS draft emphasises the need for a counterpart agreement in services, which could lead to a reduction in transaction costs associated with unnecessary regulatory and administrative burdens related to trade in services,” he added.

By proposing rules for the four modes of services categorised under the WTO’s General Agreement on Trade in Services (GATS), India aims to facilitate smoother and more efficient cross-border services trade.

India always pushes for smooth cross-border movement of skilled service providers such as IT and medical professionals, teachers and accountants.

The world’s trade Ministers gathered in the U.A.E. on February 26 for a high-level WTO meeting with no clear prospects for breakthroughs, amid geopolitical tensions and disagreements.

The World Trade Organisation’s (WTO’s) 13th ministerial conference (MC13), scheduled to run until February 29 in Abu Dhabi, the capital of the United Arab Emirates, is the first in two years.

The WTO is hoping for progress, particularly on fishing, agriculture and electronic commerce.

But big deals are unlikely as the body’s rules require full consensus among all 164 member states — a tall order in the current climate.

“I don’t have hopes that a very substantive agreement will be announced,” said Marcelo Olarreaga, Professor of Economics at the University of Geneva.

“My impression is that the negotiators are dealing with tactical positions — how to make it look like it is the other [side] who is blocking negotiations,” he told AFP.

Even WTO Director-General Ngozi Okonjo-Iweala has said she expects the meeting to be challenging due to the “economic and political headwinds” — from the war in Ukraine, attacks in the Red Sea, inflation, rising food prices and economic difficulties in Europe and China.

Her team is working around the clock to draft agreements for the talks, she told journalists this month, noting that “negotiating positions are still quite tough”, notably on agriculture.

‘Miracle’

During the WTO’s last ministerial meeting, held at its Geneva headquarters in June 2022, trade ministers nailed down a historic deal banning fisheries subsidies harmful to marine life and agreed to a temporary patent waiver for COVID-19 vaccines.

They also committed themselves to re-establishing a dispute settlement system which Washington had brought to a grinding halt in 2019 after years of blocking the appointment of new judges to the WTO’s appeals court.

“Replicating the success, the miracle, of MC12 in 2022 will be extremely challenging,” European Trade Commissioner Valdis Dombrovskis said this month.

“Negotiations on the big-ticket items” — such as fisheries, agriculture and the e-commerce moratorium — will “remain open until the final phase of the conference”, he added.

“Negotiations on dispute settlement reform and potentially some parts of the outcome document will also be challenging.”

However, the WTO faces pressure to eke out progress on reform in Abu Dhabi ahead of the possible re-election of Donald Trump as U.S. President.

During his four years in office from 2017 to 2021, Mr. Trump threatened to pull the United States out of the trade body and disrupted its ability to settle disputes.

“There will be the U.S. elections in November…so this is the last chance,” a diplomatic source in Geneva told AFP on condition of anonymity.

“Postponing anything until after MC13 is not a good strategy.”

Earlier this month, U.S. Trade Representative Katherine Tai underlined Washington’s “commitment to reforming the WTO and creating a more durable multilateral trading system”.

But Olarreaga of the University of Geneva said the other members of the WTO “cannot expect huge concessions” from the administration of U.S. President Joe Biden in an election year.

‘Fragmentation’

While there is doubt over progress at the WTO on major issues such as agriculture, there is hope for small advances on other fronts, particularly aid for developing countries.

On Feb. 26, two new countries, the Comoros and East Timor, are expected to be accepted as WTO members.

More than 120 countries and regions, including China and the European Union, but not the United States, issued a ministerial declaration early on Feb. 26, marking the finalisation of an agreement aimed at facilitating international investments in development.

They also issued a submission requesting the official integration of the deal into the WTO, but some diplomats fear Opposition from India, which rejects any agreement that does not include all member states.

But amid the difficulty of obtaining full consensus, more and more plurilateral agreements — deals with a narrower number of signatories — are being reached, applying only to the participating countries.

Adding to the challenges for those gathering in the U.A.E., is the ongoing war in Gaza and related attacks by Yemeni rebels on ships in the Red Sea, a campaign that has disrupted global maritime trade.

“The current situation is characterised by geopolitical tensions,” said a European diplomat who spoke to AFP on the condition of anonymity.

“High expectations from developing nations following the financial crisis and the Covid-19 pandemic, as well as economic tensions due to inflation… [add to the] risk of fragmentation of the global economy,” the diplomat said.