Obinna Chima
The Director-General of the World Trade Organisation (WTO), Roberto Azevêdo, has advised regulators across the world to serve domestic policy objectives while preserving a level playing field for market competition.
According to him, businesses want increased transparency and predictability so that they would be able to make informed decisions.
He said this in his opening address at a workshop organised by the governments of Mexico, Indonesia, South Korea, Turkey and Australia on domestic regulation held recently, at Geneva.
He added: “The services sector now accounts for a bigger share of output than manufacturing or agriculture in many economies, developed, developing, and least-developed. At the same time, the services sector is, by its very nature, regulation-intensive. This is why services trade often faces heavy regulatory requirements, especially when suppliers are established abroad.”
He pointed out that the WTO 2019 World Trade Report looked precisely at the “Future of Services Trade,” and part of its findings was that even though trade costs in services have fallen in recent years, they were still almost twice as high as those for trade in goods. One of the main reasons for this, according to him, was the more complex policy regimes applicable to services trade.
“The answer here is not to do away with or prohibit regulations, but to get them right. Regulations should serve domestic policy objectives while preserving a level playing field for market competition. Competitive, dynamic services markets cannot thrive in the absence of a supportive policy environment and a well-functioning regulatory framework.
“And that’s precisely what businesses everywhere are asking for. When it comes to regulations, they want increased transparency and predictability so that they can make informed decisions. I want to emphasise that this is something we hear from LDC services exporters — most recently at the LDC Services Workshop a few weeks ago. As I noted earlier, work has been going on at the WTO to respond to these needs,” he added.
He revealed that a group of WTO Members had launched discussions on regulatory disciplines for services trade.
The Joint Initiative on Services Domestic Regulation comprises 60 Members from different levels of development and regulatory backgrounds, together accounting for more than 70 per cent of world trade.
“Good regulatory practice is compatible with a variety of regulatory systems and approaches — no matter the level of development or the societal choices reflected in domestic regulation. The main objective is to ensure that certain types of regulations are not opaque and unnecessarily cumbersome. Enhancing regulatory quality and facilitating services trade are the key goals here.
“Today’s workshop is an excellent opportunity to go deeper into these issues. It will also allow for a better understanding on the relationship between regulatory quality, sustainable growth and development, and competitive services markets,” he added.
