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WTO Symposium on Cross-Border Supply of Services Regulatory Issues Related to Cross-Border Trade 29 April 2005 Thomas Chan, Deputy Representative, Hong.

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Presentation on theme: "WTO Symposium on Cross-Border Supply of Services Regulatory Issues Related to Cross-Border Trade 29 April 2005 Thomas Chan, Deputy Representative, Hong."— Presentation transcript:

1 WTO Symposium on Cross-Border Supply of Services Regulatory Issues Related to Cross-Border Trade 29 April 2005 Thomas Chan, Deputy Representative, Hong Kong, China

2 Outline Relevance and challenges of regulatory issues; impact of regulatory issues on cross-border services trade. Relevance and challenges of regulatory issues; impact of regulatory issues on cross-border services trade. Relevance of on-going negotiations under Article VI:4; elements to address regulatory barriers in cross-border services trade. Relevance of on-going negotiations under Article VI:4; elements to address regulatory barriers in cross-border services trade. Other possible means of addressing regulatory barriers to cross-border services trade. Other possible means of addressing regulatory barriers to cross-border services trade.

3 Regulatory Issues in Cross-Border Services Trade (1) Generally more liberal MA regimes in Mode 1/2 Generally more liberal MA regimes in Mode 1/2 Liberal MA commitments in Mode 1/2 (?) Liberal MA commitments in Mode 1/2 (?) Source: WTO Secretariat, S/C/W/99, 3 March Liberal NT commitments in Mode 1/2 (?) Liberal NT commitments in Mode 1/2 (?) % of full/partial MA commitments Mode 1 Mode 2 Mode 3 Accounting24%/51%34%/54%7%/91% Data processing 61%/23%70%/21%24%/74% R&D services 73%/9%70%/15%6%/94% Management consulting 65%/21%69%/23%26%/73%

4 Regulatory Issues in Cross-Border Services Trade (2) Regulatory regime often not mode-specific Regulatory regime often not mode-specific Size and sophistication of suppliers Size and sophistication of suppliers Supply of services to multiple regulatory regimes Supply of services to multiple regulatory regimes Physical distance between regulators and suppliers Physical distance between regulators and suppliers Jurisdictional issues Jurisdictional issues Regulatory feasibility Regulatory feasibility

5 Qualification requirements (education, training, experience, language, etc.) and recognition Qualification requirements (education, training, experience, language, etc.) and recognition Restriction on means of supply Restriction on means of supply Residency-related requirements Residency-related requirements Procedures requiring physical presence/ electronics documents not accepted Procedures requiring physical presence/ electronics documents not accepted Data privacy/protection laws/regulations Data privacy/protection laws/regulations Regulatory Issues in Cross-Border Services Trade (3)

6 Regulatory Issues in Cross-Border Services Trade (4) Measures targeting extra-territorial service suppliers - indemnity, withholding tax, etc. Measures targeting extra-territorial service suppliers - indemnity, withholding tax, etc. Other labour measures - wage parity, social security, etc. Other labour measures - wage parity, social security, etc. Enforcement of regulations Enforcement of regulations Availability of legal remedies Availability of legal remedies Visa issues Visa issues

7 Article VI:4 & Cross-Border Services Trade (1) Regulations should be transparent to service suppliers, at all levels of governments and non- governmental bodies involved as regulatory authorities, and applicable to work visa or permit requirements and procedures Regulations should be transparent to service suppliers, at all levels of governments and non- governmental bodies involved as regulatory authorities, and applicable to work visa or permit requirements and procedures Application of regulations should be objective and impartial (Article VI:1) Application of regulations should be objective and impartial (Article VI:1) Regulatory requirements and procedures should be not more trade-restrictive or burdensome than necessary to achieve regulatory objectives Regulatory requirements and procedures should be not more trade-restrictive or burdensome than necessary to achieve regulatory objectives

8 Article VI:4 & Cross-Border Services Trade (2) Mechanism should be available for taking into account foreign qualifications requirements and technical standards Mechanism should be available for taking into account foreign qualifications requirements and technical standards As a norm, residency requirement should not be a pre-requisite for supply of service, qualification, certification, or examination leading to such As a norm, residency requirement should not be a pre-requisite for supply of service, qualification, certification, or examination leading to such Fulfillment of requirements and procedures by electronic means should be allowed (licensing, certification, compliance, etc.) Fulfillment of requirements and procedures by electronic means should be allowed (licensing, certification, compliance, etc.)

9 Article VI:4 & Cross-Border Services Trade (3) Question: Question:  Are mode-specific regulatory disciplines necessary for cross-border services?

10 Questions for Regulators Is it necessary for cross-border services to be regulated? What are the policy objectives to be achieved by regulating cross-border services? Is it necessary for cross-border services to be regulated? What are the policy objectives to be achieved by regulating cross-border services? Is it technically feasible to regulate cross-border services? Are there differences between Mode 1 and Mode 2? Are there alternatives to direct regulation that could achieve the same objectives? Is it technically feasible to regulate cross-border services? Are there differences between Mode 1 and Mode 2? Are there alternatives to direct regulation that could achieve the same objectives? Is it necessary for cross-border services to be subject to the same regulatory requirements and standards as applied to services supplied domestically? Is it necessary for cross-border services to be subject to the same regulatory requirements and standards as applied to services supplied domestically?

11 Further Thoughts (1) Regulatory co-operation Regulatory co-operation International standards International standards Equivalence and recognition Equivalence and recognition General equivalence: General equivalence:  For services suppliers subject to regulations in home country, where regulatory co-operation exist and/or international standards are being applied, could there be a general presumption of competence? Harmonization of Mode 1/2 requirements: Harmonization of Mode 1/2 requirements:  To the extent that the same regulatory objectives apply to services supplied through Mode 1 and Mode 2, could there be a general principle that the same regulatory requirements and procedures could be applied to both Mode 1 and Mode 2 supply of services?

12 Further Thoughts (2) Location-specific services: Location-specific services:  e.g. postal/courier/express, telecommunications*, construction, distribution*, financial services*, transport* (* - part of the sector) Non-location-specific services: Non-location-specific services:  e.g. professional services*, business services, computer and related services, R&D services, other business services


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