WTO MEET BUILDS BRIDGE TO US, EU FOR INDIAN PROS

Amiti Sen & Sheila Mathrani, Geneva, July 28, 2008
The Economic Times (Delhi edition)

Contractual service providers and independent professionals from India may have easier access to the EU and the US if the two translate the signals made by them at the ongoing mini-ministerial meet of the World Trade Organization (WTO) into serious offers.

While the EU proposed replacing the restrictive regime of economic needs test and labour market test with a fixed annual quota for professionals, the US said the administration was willing to address issues related to additional concessions in the movement of workers and professionals with the Congress, trade diplomats said.

On its part, India has indicated it could take on more commitments at the multinational level in the area of opening up its telecom and courier services and, to some extent, certain parts of its financial services by relaxing foreign equity caps. The country’s levels of commitments in services at WTO made during the previous Uruguay round are lower than the existing levels of openness in the country.

After the conference, commerce and industry minister Kamal Nath said there was a good movement by the US and EU. “They have offered to do some bindings in contractual service supplies and independent professionals, which is a constructive sign. We have made substantial offers in many areas. Obviously, our offers are subject to what we get,” he said.

According to commerce secretary G K Pillai, the EU offer was more specific. “They have put a quota system and have removed the economic needs test,” he said. The economic needs test is a non-tariff barrier which requires that it be proved that the economy of the country to which a worker is travelling to for providing services really requires his/her services. Trade diplomats said the EU has proposed it could replace the test with a quota of 80,000 professionals every year. The proposed quota is much higher than the US quota of 60,000 professionals.

The EU too seems happy with the indications given by India in the conference. EU trade commissioner Peter Mandelson told media after the session that there had been ‘some interesting’ offers from India and China. “I heard some interesting signals from India, and a couple of things from China, one in particular that I want to specify, to follow up,” he said.

The US said its Mode 4 (movement of workers, professionals and others) commitments could be enhanced by applying it to all sectors on which it is giving offers and an expansion of the list of such sectors. It added it would discuss the issue of additional concessions in Mode 4 with the Congress.