India could seek inputs from some of the richest nations on a draft trade facilitation agreement (TFA) on services before submitting it formally with the World Trade Organization...
India could seek inputs from some of the richest nations on a draft trade facilitation agreement (TFA) on services before submitting it formally with the World Trade Organization (WTO) for consideration, sources told FE.
Already, senior commerce ministry officials are learnt to have held talks with US officials on this matter through video-conferencing. India could make similar pitch to other big nations to exchange their ideas on the likely contours of the draft TFA in services, some of which may also be included in the draft. Sources said any endorsement of India’s draft proposal by key nations, especially the group of the seven rich nations, including the US, could brighten its chances of wider acceptability when it’s placed before the WTO. Also, such a step would add credibility to India’s draft proposal.
IIM-Bangalore has been roped in to assist with the draft-making process and it will be ready within a month or two, said the sources.
For the first time in early June, following India’s persistent demand for a TFA on services to better regulate such trade globally, WTO director general Roberto Azevedo had asked India to submit a formal proposal so that it can be taken up by the multilateral body for wider discussion and subsequent approval.
The move is aimed at developing a broader framework governing global services trade, just like the TFA on goods.
The TFA in services would focus on issues like liberalised visa regime, long-term visas for business community and freer movement of professionals for the greater benefit of both India and the world. It could also focus on all issues concerning the services sector within the WTO framework, which could also include dispute settlement mechanism in such trade.
India is keen on boosting the services sector, as they account for over a half of its GDP. India’s services sector grew at a compounded annual growth rate of 8.6% between 2010 and 2014, outperforming 8.4% in China, 1.8% in the US and 2.5% globally, according to the Economic Survey for 2015-16.
Although India has been seeking the TFA on services since the December 2015 WTO ministerial conference in Nairobi, this will be for the first time that the country will formally put up such a proposal at the multilateral trade body.
The decision follows an informal meeting of trade ministers from 25 WTO members on the sidelines of the Organisation for Economic Co-operation and Development (OECD) ministerial council meeting in Paris in June where the WTO director general welcomed India’s proposal for the TFA on services.
The encouragement by the WTO DG is not just a boost for India, but also a crucial step on global services trade. This is because just a half of its 162 members have so far endorsed the TFA on goods. The WTO doesn’t have a similar mechanism for services trade. India has already endorsed the TFA on goods at the WTO, which will take effect once two-thirds of the members formally ratify it.
Last month, commerce minister Nirmala Sitharaman had said it was too early to say whether or not the TFA in services would subsume all existing frameworks being discussed or adhered to by WTO members. Some WTO members are already discussing treaties like The Trade in Services Agreement.