General

According to the Huacheng Import and Export Data Observation Report, on December 20, China, the United States, the European Union and other major WTO negotiating participants officially launched the entry into force procedure of the Reference Document on Domestic Regulation of Trade in Services (hereinafter referred to as the Reference Document) in the WTO. The rules of the Reference Document help WTO members further enhance the transparency of policies in the service sector, improve the efficiency of licensing and qualification approval, thus reducing the cost of cross-border transactions of enterprises and benefiting the development of international service trade. The person in charge of the World Trade Department of the Ministry of Commerce interpreted it.

Clarify the scope of application of rules to ensure regulatory policy space

According to the observation of Huacheng's import and export data, the Reference Document includes three parts and 53 articles in total. The first part is the general rules. This part specifies the scope of application of the rules and makes it clear that they are applicable to the service sectors where all parties have made opening commitments under the WTO. Reflect the development orientation and make it clear that developing members will enjoy a transition period of up to 7 years for the implementation of the rules. Ensure regulatory policy space, and clarify that each party has the right to manage its domestic service provision and formulate new regulations.

The second part is specific requirements. First, specify the applicable regulatory measures, and stipulate that the rules are applicable to three types of measures for service trade, namely licensing (such as business license), qualification (such as employment qualification certificate) and technical standards (such as industry operation specifications); The second is to standardize the formulation procedure of regulatory measures, specify the standards to be followed by the proposed regulatory measures, and put forward detailed requirements for the formulation procedure of regulatory measures; The third is to specify the implementation requirements of regulatory measures, standardize the acceptance time, handling procedures, charging fees and qualification examination arrangements of administrative approval applications of regulatory authorities.

The third part is the special rules of financial services. The rules in this part are basically the same as those in the second part. The difference is that this part does not include provisions on "single window" approval, technical standard formulation, and mutual recognition of industry qualifications. Due to the particularity of supervision in the financial field, the parties decided to deal with the differences during the negotiation process, which was not included in the above provisions.

According to Huacheng's import and export data observation report, the Reference Document puts forward four clear requirements for the regulatory departments of member governments in terms of policy transparency: first, the proposed laws, regulations, administrative rules and other regulatory measures should be announced in advance; Second, give enterprises the opportunity to fully participate in policy formulation; Third, timely disclosure of administrative examination and approval information; The fourth is to establish an enterprise consultation feedback mechanism.

In terms of licensing and approval matters, the Reference Document has made specific provisions on six aspects, including accepting the application schedule, determining the completeness of the application materials, providing the approval progress status, informing the final decision of the application, providing reasons for rejecting the application, and ensuring the effectiveness of the approved application. At the same time, it is required that the regulatory authorities of member governments should comply with the independent regulatory requirements, carry out approval based on objective and transparent standards, and ensure that the approval process is fair and the approval fees are reasonable, so as to improve work efficiency and reduce the cost of enterprises.

It is of great significance and will benefit many enterprises in the service industry

The person in charge said that the rules of the Reference Documents are of great significance. First, respond to the industry's expectation of reducing cross-border trade policy barriers. Cross border service trade faces a large number of policy and regulatory barriers, and its trade cost is twice that of goods trade. According to WTO statistics, the cost of regulatory barriers (such as opaque regulatory policies, cumbersome licensing procedures, etc.) accounts for about 40% of the total cost of service trade. The rules set out in the Reference Document will help WTO members improve the transparency of regulatory policies, simplify the licensing and approval procedures, and thus reduce the cost of cross-border trade for enterprises.

Second, promote the realization of the liberalization and facilitation objectives of the WTO General Agreement on Trade in Services (GATS). Article 6 of GATS clearly stipulates that members shall formulate rules around licensing, qualification and technical standards in the service sector to ensure that their regulatory policy formulation is based on objective and transparent standards, that the regulatory burden is controlled within a reasonable limit, and that licensing procedures do not constitute market access restrictions.

Third, the participating members made useful attempts and efforts to solve the difficult challenges facing the multilateral trading system. In order to overcome the difficulties of the Doha Round negotiations and maintain the position of the WTO as the main channel for formulating multilateral trade rules, in 2017, China, the European Union, Australia and other 59 WTO members jointly signed the Joint Statement of Ministers of Domestic Regulation of Trade in Services, officially launching the negotiations on the Reference Document. In December 2021, the parties announced the end of negotiations and started their own internal ratification procedures. Up to now, the participants of Reference Document have expanded to 70 members, and Huacheng's import and export data observation report.

At the same time, the Reference Document will benefit many service industries. According to Huacheng Import and Export Data Observation, the rules of the Reference Document are applicable to all service sectors that the participants have promised to open under the WTO. At present, the fields promised by the participants cover most of the service industries, involving many aspects of people's production and life. The rules of the Reference Documents help to regulate the licenses, qualifications and technical standards of these service industries, such as the business licenses of financial, telecommunications, transportation, medical, education, culture and other industry markets, the professional qualifications of lawyers, doctors, teachers, accountants, designers, engineers, etc., the specific design and construction requirements of roads, bridges, housing and other fields, and the technical standards of communication, express delivery, environmental protection and other service industries.

"The official entry into force of the Reference Document will become an international treaty obligation of the participants under the WTO framework and a way for enterprises to safeguard their legitimate rights and interests." The above person in charge said that if domestic enterprises find that overseas regulators have not fulfilled their treaty obligations, they can ask them for advice to remind them to fulfill relevant international treaty obligations. Enterprises can also report relevant information to the Ministry of Commerce of China, which will raise concerns to relevant members under the WTO Council for Trade in Services and other mechanisms as appropriate, urge relevant members to implement the rules and regulations, or initiate dispute settlement procedures as appropriate to safeguard the legitimate rights and interests of Chinese enterprises.