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

This type of regulation is known as domestic regulation of services. While these regulations may be needed 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 the accountant is able to do business without too much difficulty.

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 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 are 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.

In May 2019, 59 members of the WTO issued a Joint Statement on Services Domestic Regulation committing to continued negotiation towards an outcome by the 12th WTO Ministerial Conference in June 2020(MC12).

Where is the process at?

The negotiation aims to develop rules on domestic regulation that are both commercially viable and comprehensive. Once completed, domestic and foreign services suppliers will be able to operate under rules that are fair and transparent.

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 of the rules is largely finalised and includes:

  • 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

What else needs to be done?

Members continue work on these three remaining issues:

  • the scope of application for the rules
  • transition periods and other flexibilities for developing and least developed countries
  • a provision that requires domestic regulation measures do not discriminate on the basis of gender.

 

Monthly negotiating meetings are scheduled as Members work towards a conclusion in time for MC12.