A group of World Trade Organization (WTO) members have concluded an agreement to simplify regulations related to services trade, which will support SMEs in particular and help reduce the costs of global services trade by more than $150 billion a year.
The Joint Initiative on Services Domestic Regulation
Services represent the largest and fastest growing sector of today's economy, but complicated rules and procedures have limited the amount of trade in services significantly.
In a press release from December 2021, the European Union (EU) and the WTO announced the launch of the “Joint Initiative on Services Domestic Regulation”, an agreement concluded between 67 WTO members, including the EU, that will simplify unnecessarily complicated regulations and ease procedural hurdles faced by SMEs when it comes to trade of services.
This is the first WTO initiative in the area of trade in services in a very long time, and it will align qualification requirements and procedures, technical standards, licensing requirements, and procedures for services providers.
More specifically, the clear rules on transparency and authorization in the area of services agreed as part of this initiative will facilitate trade in services for SMEs that do not have the same resources and experience to cope with complex processes as do their larger competitors.
The Next Steps
The WTO members participating in this initiative will make specific commitments by the end of 2022 to facilitate trade in services in their markets, such as simplifying authorization procedures or ensuring transparency. It is also the first time a WTO text includes a binding provision on non-discrimination between men and women in authorization processes.
The adoption and implementation of the regulations included in the reference paper will reduce trade costs for service suppliers substantially and thus help the sector during the post-COVID-19 recovery phase. The agreement will also help the EU regarding the digital agenda, since sectors such as telecommunications, computer services, engineering, and commercial banking stand to benefit from it.
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