The entry into force of new disciplines on the national regulation of services, announced this Tuesday (27.02.2024) in the 13th Ministerial Conference of the World Trade Organization (WTO – MC13), reduce trade costs by more than USD 125 billion worldwide.
The new rules apply to a large and diverse group of WTO members, including developed, developing and least developed countries, which account for 92% of global trade in services.
The novelty lies in the fact that the regulations seek to mitigate the unintended trade-restrictive effects of measures relating to licensing requirements and procedures, qualification requirements and procedures and technical standards. The aim is to make the regulatory environment more business-friendly and able to help in particular micro, small and medium-sized enterprises and not only large ones.
The disciplines will be applied on a “most-favoured-nation” basis, meaning they will benefit all WTO members. New WTO research has found that their implementation will help reduce services trade costs by 10% for lower-middle-income economies and 14% for upper-middle-income economies, with overall savings of US$127.000 billion. If all WTO members apply the disciplines, large welfare and trade gains are projected, especially for developing economies. By 2032, global real incomes are projected to rise by at least 0,3%, representing US$300.000 billion, and global services exports are expected to rise by 0,8%, amounting to US$206.000 billion.
With the entry into force of the disciplines, the Director General Okonjo-Iweala She said: “Services are the largest generator of jobs, particularly for women and youth, and have been the biggest driver of trade growth in recent years. It is therefore high time that recognised good regulatory practices on trade in services are brought under the WTO umbrella. Implementing the disciplines has enormous potential for developing economies.”
For his part, the UAE Minister of Foreign Trade, Dr. Al Zayoudi, He noted: “The implementation of this outcome will significantly reduce red tape and facilitate trade in services. It will enable services exporters to trade with confidence. While goods, manufacturing and commodities will always play an important role in the economy, much of our future prosperity will depend on services exports. The openness and transparency of this achievement represents the WTO at its best.”
El Minister of Foreign Trade of Costa Rica, Manuel Tovar, whose country is coordinating the initiative, added: “This is the first outcome on trade in services in more than 25 years, a much-needed update of the WTO rules. It is very significant because WTO members representing more than 92% of global trade in services have committed to implementing these practices (…) This shows that it is possible to make progress on the WTO negotiating pillar, to find consensus among committed members to support and strengthen the multilateral trading system.”
"The disciplines address a long-standing request from our business community for transparent and efficient authorisation procedures and address the needs of modern trade in services. They will dramatically improve the way our businesses are treated in this area, in 72 countries around the world," the statement concluded. Vice-President of the European Commission, Valdis Dombrovskis.
In view of this, the WTO considers that the efficiency and competitiveness of the services sector can also indirectly improve the performance of all other economic sectors, including manufacturing and agriculture.
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Members participating in the discussions: Albania, Argentina, Australia, Brazil, Canada, Chile, China, Colombia, Comoros, Costa Rica, El Salvador, United Arab Emirates, United States, Russian Federation, Philippines, Georgia, Hong Kong, China, Iceland, Israel, Japan, Kazakhstan, Liechtenstein, North Macedonia, Mauritius, Mexico, Moldova, Montenegro, Nigeria, Norway, New Zealand, Paraguay, Peru, Kingdom of Saudi Arabia, Kingdom of Bahrain, United Kingdom, Republic of Korea, Singapore, Switzerland, Thailand, Chinese Taipei, Thailand, Timor Leste, Türkiye, Ukraine, European Union and Uruguay.
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