Its time we sought more market access

Updated: Nov 17 2005, 05:30am hrs
Indias interests are more offensive than defensive as far as the WTOs Doha round talks on services are concerned. This is because of its actual and potential global competitiveness in a large number of sectors, especially in Mode 4 concerning movement of persons, says an Icrier study by BK Zutshi.

Titled, Market Access Negotiations in Services: Options and Strategy for India, the study said India is in a position to leverage its domestic reform and liberalisation agenda, coupled with its market size for multilateral engagement to seek market access in sectors and modes of export interest to it.

This would, in fact, call for an aggressive bold approach and the willingness to conditionally offer to bind the existing degree of openness in most sectors and be prepared to further bind on the basis of the future reform agenda, the study pointed out. It further said that on the horizontal basis, it has great interest in liberalisation under Mode 4 pertaining to movement of persons.

It pointed out that India has emerged as the most dynamic exporter of services during the last 10-15 years. Its annual average growth rate of exports of services during the 10-year period 1993 to 2002 has been over 17% as against the world average of about 5.5%. For the five-year period 1998 to 2002 the average growth was 22% while the world average was 4%.

During 2004, Indias services export grew by 16%. Indias share in the world exports during 2004 was 1.9% compared to 1.4% in the previous year. That apart, in 2004, India became the 16th largest exporter of services, up from its 21st position in 2003.

The study points out that Mode 4 would be of interest to India, particularly in respect of contractual service suppliers and independent professionals. In addition, India has major interest in expanding the coverage of the skill levels of natural persons for temporary movement to deliver services under this mode.

In respect of Mode 4, given the demands of India, the offer should roughly match the demands. The study adds that India would require to build a consensus with the concerned professional service bodies on the extent, nature and the timeframe for opening up.

It also states that in service sectors where internal reform has not been initiated or where there is a lack of regulatory system, India should refrain from making commitments. These particularly apply in case of public utility services provided at the municipal level like drinking water supply and waste disposal services.

In fact, public utility services like drinking water supply and waste disposal services continue to be monopolies and domestic reforms are yet to be undertaken in these areas.

It may be noted that services negotiations were initiated in January 2000 as part of the commitments under the Uruguay Round. Much of the enabling policy and procedural and technical framework for these negotiations like negotiating guidelines and procedures, guidelines for scheduling of commitments had been settled already by Doha.

According to the study, there is growing acknowledgement that the request offer model currently being followed in talks on services on its own is unlikely to deliver a decent and balanced package.

There is need to supplement this mode by plurilateral and multilateral approaches. There is now an agreement in principle to seek specific directions from the ministers at Hong Kong about how to proceed further in realising an ambitious and balanced outcome in market access.

Based on a paper by BK Zutshi