WTO plurilateral Joint Initiative on Services Domestic Regulation

Services sectors can be regulated in a number of ways such as through licensing, technical standards, or requiring certain qualifications in order to be authorised to operate in a market.

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This type of regulation is known as “domestic regulation” of services. While these regulations are legitimate, if poorly designed they can also make trade difficult.

For example an accountant who may be thinking of working in another market might need particular qualifications and/or a licence in that market before they can begin work. Domestic regulation rules aim to make sure that processes are impartial, transparent and fair so that the accountant is able to apply for the license or qualification to do business without too much difficulty.

In some instances these types of regulatory requirements can be time consuming and force businesses to pay large compliance costs. They can reduce New Zealand exporters’ ability to operate efficiently and competitively in export markets. Rules on how services domestic regulation is designed are commonly found in many of New Zealand’s free trade agreements, but the existing World Trade Organisation (WTO) rules that apply to a wider range of economies have until now been less developed.

Who is involved?

At the WTO 11th Ministerial Conference in Buenos Aires a group of 59 WTO members issued a Joint Statement announcing the start of negotiations for rules on domestic regulation of services.

As the negotiations continued, more WTO Members joined the process, and in December 2021, 67 WTO Members adopted a Declaration announcing the successful conclusion of negotiations. See a full list of Members involved(external link).

Where is the process at?

In December 2022, New Zealand, along with 58 other WTO Members, officially signed up to the Joint Initiative on Services Domestic Regulation by submitting an amendment to our GATS schedule for certification at the WTO.  As a country with well-established administrative processes, New Zealand does not need to change its legislation or practice to meet the requirements of the WTO disciplines. Once the new rules enter into force, New Zealand exporters will benefit from more transparent and fair rules for authorisation to supply services in overseas markets. See the official update from the WTO(external link).  

The Members taking part in this initiative have agreed that the domestic regulation rules will apply on a Most Favoured Nation basis. This means that the rules apply to all Members of the WTO, and all will benefit (regardless of whether they intend to make commitments or not). This should encourage other Members to eventually sign up to the rules and apply them in their domestic legislation.

What is in the rules?

The text on Services Domestic Regulation includes rules on:

  • reducing the number of applications required for authorisation
  • allowing applications to be made at any time
  • allowing electronic applications and acceptance of copies
  • processing of applications
  • fees
  • assessment of qualifications
  • independence from regulators
  • making information available to the public
  • transparent development of regulatory processes

The final text also includes:

  • flexibilities for developing and least-developed country Members
  • a voluntary provision for Members that choose to implement it, which would require domestic regulation measures to not discriminate on the basis of gender

Download the full Services Domestic Regulation text(external link) from the WTO website.


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