PH at the forefront of ASEAN in facilitating trade in services in WTO
Left photo: Ambassador Manuel A.J. Teehankee, Permanent Representative of the Philippines to the WTO, during the negotiations on the World Trade Organization (WTO) Joint Initiative on Services Domestic Regulation.
GENEVA, 03 December 2021 – On 02 December 2021, the Philippines joined 66 other countries in successfully concluding negotiations on the World Trade Organization (WTO) Joint Initiative on Services Domestic Regulation, which will enhance transparency, predictability and effectiveness of procedures that businesses must comply with in obtaining authorization to supply their services.
The Philippines is one of three ASEAN Member States, alongside Singapore and Thailand, that joined the initiative under the General Agreement on Trade in Services (GATS). The agreement, which also includes the EU, China and the United States, covers more than 90% of global services trade. During her remarks, WTO Director General Ngozi Okonjo-Iweala noted that the agreement is expected to result in global trade cost savings of USD 150 billion annually.
Speaking during the launch, Ambassador Manuel A.J. Teehankee, Permanent Representative of the Philippines to the WTO, noted that, “services represent the driver of our economy, accounting for more than 60% of GDP and covering more than 55% of our labor force. The Philippines has long advocated for MSMEs and their integration into the global economy. The Philippines expects that the disciplines will make it easier for our MSMEs to enter the global market, where they will stand to benefit from a higher than average trade cost reduction of up to 10 percent. Philippine firms, particularly those involved in transport and logistics, financial services, and knowledge-based professional services will be in a better position to attract the Philippines to the WTO, noted that “investments, allow MSMEs to pursue further integration into global services value chains, and support our economic recovery.”
The Asia Pacific Services Coalition lauded “the leadership in South East Asia shown by Thailand, Singapore and the Philippines” noting that “adoption and implementation of the new GATS Reference Paper will ensure our regulatory regimes are fit-for purpose as we strengthen our economies, address the pandemic and meet the challenge of digital transformation and environmental sustainability.” Leadership through the National Economic Development Authority (NEDA) and Department of Trade and Industry has been instrumental in pushing forward this regulatory reform agenda. The Philippines expects to submit its schedule of commitments by the end of February 2022.
The Joint Initiative is the first services outcome under GATS in almost 25 years and will enhance regulatory quality and facilitation, including the acceptance of electronic applications and authenticated copies of documents, transparent information on documentary requirements, single points of enquiry, and clear timeframes for processing applications.
The WTO Trade Report of 2019 showed that costs of trade in services is twice the costs of trade in goods, largely due to the unintended trade-restrictive effects related to licensing requirements and procedures, qualification requirements and procedures, and technical standards. A 2021 OECD study showed that streamlining procedures would result in an average cost reduction of 7% across all service sectors in Asia-Pacific, with the highest impact estimated for commercial banking (-22%), telecommunications (-14%), insurance (-11%) and computer services (-7%). Among professional services, engineering (-6%) and architecture (-6%) would stand to gain the most. END
For more information, visit https://wtopm.dfa.gov.ph/.