Headline: In Wake Of Big Global Services Deal, U.S. Leadership Key To A Revitalized WTO



Christine Bliss | Coalition of Services Industries

In a largely unheralded breakthrough, the World Trade Organization managed to wrap up an important negotiation late last year that will boost services trade for years to come. Though the agreement on services domestic regulations has garnered few headlines, it deserves attention.

Not only is the deal a reminder that persistence and political will can actually yield results at the WTO, but it is also commercially meaningful. The agreement has 67 signatory countries – including the United States – that account for 90% of world services trade. At a time too many governments are resorting to protectionist policies on trade, it’s all the more notable that so many WTO members signed onto the deal.

The agreement commits countries to create more transparent and predictable rules for services suppliers. It won’t affect the substance of regulation. But it will increase transparency in rule-making, reinforcing the rule of law and contributing to a more level playing field for business.

This will especially help smaller firms with limited staff. It means a company that used to have to spend a lot of time navigating paperwork will be able to devote more of its resources to business development and expansion.

The deal will also help keep a lid on the prices that consumers end up paying for services. Until now the costs associated with services trade have been twice as high as goods, mostly because of opaque regulations and cumbersome procedures. But a 2021 OECD/WTO study estimated the new agreement will save up to $150 billion by cutting red tape and increasing transparency, especially in the financial, business, communications and transport sectors.

This success story did not happen overnight. It is the product of over 16 years of negotiations, beginning with the WTO’s Doha Round of negotiations. Australia, Costa Rica, EU, the U.S., and other participating delegations are to be commended for their persistence, creativity, and political will in finalizing the agreement. The decision of a number of ASEAN members to support the Agreement – including Singapore, Thailand and the Philippines – was also an important element in achieving a truly global outcome. WTO Director-General Ngozi Okonjo-Iweala, her deputies and many WTO delegations are to be commended for helping guide negotiations to a positive finish.

But there’s another crucial factor: the Biden administration opted to formally support the negotiations, which provided a major boost to get the agreement over the goal line. That decision highlights just how much of a difference constructive U.S. participation and leadership can make in achieving positive outcomes in the WTO.

The conclusion of the domestic regulations deal stands alongside other recent WTO efforts that underscore that organization’s critical role among multilateral institutions. These include setting an ambitious timeline for the conclusion of WTO e-commerce negotiations, stepping up discussions on trade-related climate change and environmental measures, and leveraging trade frameworks to offer better global access to pandemic-related goods and services. All these initiatives demonstrate the collective will of the Director-General Okonjo-Iweala and many WTO members to push forward despite the challenges presented by the global pandemic.

Along with the successful conclusion of negotiations on services trade, they are powerful reminders that the WTO matters. With global economies still struggling in the face of the pandemic, the WTO stands to play a vital role in stabilizing trade. Continued strong U.S. engagement in the WTO will be critical to maintaining that momentum. 

Christine Bliss, president of the Coalition of Services Industries, previously served as Assistant U.S. Trade Representative (USTR) for Services and Investment in the Office of the U.S. Trade Representative.

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