General

According to Huacheng Import and Export Data Observation, on December 20, China, the United States, the European Union and other major WTO negotiation participants officially launched the entry into force 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 will help WTO members to 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 head of the World Trade Department of the Ministry of Commerce interpreted it.

Define the scope of application of the rules and ensure the regulatory policy space

According to Huacheng Import and Export Data Observation, the Reference Document includes three parts and 53 articles in total. The first part is the general principles. This part specifies the scope of application of the rules and clarifies its application to the service sectors that all parties have made opening commitments under the WTO. Reflect the development orientation and clarify that developing members will enjoy the transition period of rule implementation up to 7 years. Ensure regulatory policy space, and clarify the right of all parties to manage and formulate new laws and regulations on the provision of services within their territory.

The second part is the specific requirements. The first is to clarify the applicable regulatory measures and stipulate that the rules are applicable to the three types of measures of service trade, namely, licenses (such as business licenses), qualifications (such as professional qualifications) and technical standards (such as industrial operation specifications); The second is to standardize the formulation procedure of regulatory measures, stipulate the standards to be followed by the regulatory measures to be adopted, and put forward detailed requirements for the formulation procedure of regulatory measures; The third is to specify the implementation requirements of the regulatory measures in detail, and standardize the acceptance time, processing procedures, fees and qualification examination arrangements of the administrative approval application of the regulatory authorities.

The third part is the special rules of financial services. This part of the rules is basically consistent with the second part, but the difference is that this part does not include "single window" approval, technical standard development and mutual recognition of industry qualifications. Due to the special nature of financial supervision, the parties decided to deal with the differences in the negotiation process and not to include the above provisions.

According to the report of Huacheng Import and Export Data Observation, in terms of policy transparency, the Reference Document puts forward four clear requirements for the regulatory authorities of member governments: first, the laws, regulations, administrative rules and other regulatory measures to be implemented will be announced in advance; Second, give enterprises the opportunity to fully participate in policy formulation; Third, timely disclosure of administrative approval information; Fourth, establish the enterprise consultation and feedback mechanism.

In terms of licensing approval matters, the Reference Document has made specific provisions on six aspects: acceptance of the application schedule, determination of the completeness of application materials, provision of approval progress status, notification of the final decision of the application, provision of reasons for rejection of the application, and ensuring the effectiveness of the approved application. At the same time, the regulatory authorities of member governments should comply with the independent requirements of supervision, carry out approval based on objective and transparent standards, ensure that the approval process is fair and the approval fee is reasonable, so as to improve the work efficiency and reduce the enterprise's employment costs.

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

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

The second is to promote the realization of the liberalization and facilitation requirements of the General Agreement on Trade in Services (GATS) of the WTO. Article 6 of GATS clearly stipulates that members should formulate rules around licensing, qualification and technical standards in the field of service industry to ensure that their regulatory policies are based on objective and transparent standards, the regulatory burden is controlled to a reasonable limit, and the licensing process does not constitute market access restrictions.

The third is the beneficial attempts and efforts made by participating members to solve the difficulties and challenges faced by the multilateral trading system. In order to overcome the difficulties of the Doha Round negotiations and maintain the status of the WTO as the main channel for formulating multilateral trade rules, in 2017, China, the EU, Australia and other 59 WTO members jointly signed the Joint Statement of Ministers of Domestic Regulation of Trade in Services, and officially launched the negotiation of the Reference Document. In December 2021, the parties announced the end of negotiations and began their own internal approval procedures. So far, the participants of the Reference Document have expanded to 70 members, and Huacheng 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 all participants have promised to open under the WTO. At present, the areas that the participants have promised to open up include most of the service industries, involving many aspects of the people's production and life. The rules of the Reference Documents help to standardize the licensing, qualification and technical standards of these service industries, such as the business license of the financial, telecommunications, transportation, medical, education, culture and other industrial markets, the professional qualifications of lawyers, doctors, teachers, accountants, designers, engineers and other professional qualifications, the specific design and construction requirements of roads, bridges, housing and other fields, and the technical standards of the communication, express, environmental protection and other service industries.

"The official entry into force of the Reference Document will become the international treaty obligations of the participating parties under the framework of the WTO and the way for enterprises to safeguard their legitimate rights and interests." The above-mentioned person in charge said that if domestic enterprises find that the overseas regulatory agencies have not fulfilled their treaty obligations, they can consult with them to remind them to fulfill relevant international treaty obligations. Enterprises can also report relevant information to the Ministry of Commerce of China. The Ministry of Commerce will raise concerns to relevant members under the WTO Council for Trade in Services and other mechanisms as appropriate, urge relevant members to comply with the provisions of the Rules, or initiate dispute settlement procedures as appropriate to protect the legitimate rights and interests of Chinese enterprises.