WTO JSI on Domestic Regulation

In the context of services negotiations at the WTO, the term Domestic Regulation is used to refer to measures related to an authorization to supply a service, such as a licensing requirement or procedure, other than those disciplined by the Market Access and National Treatment articles of the WTO General Agreement on Trade in Services (GATS). The GATS, which entered into force in 1995, does not include finalized rules on Domestic Regulations, but instead contains a mandate for future negotiations on the matter. 

While maintaining the ability of a Member to regulate in the public interest, enhanced rules on Domestic Regulation have the potential to facilitate increased trade in services. These potential rules could ensure, for example, that licensing authorities are transparent with respect to the criteria they consider when evaluating an application, that the requirements related to that application are clear, and that all applications are processed in a timely manner. When rules are not applied in a transparent and predictable manner, a services supplier can be effectively blocked from accessing a particular market by opaque and arbitrary actions on the part of a foreign licensing authority, even where the sector in question is fully committed under the GATS.

WTO negotiations aimed at achieving disciplines on Domestic Regulation took place over several years after the operationalization of the GATS, but a successful outcome was not reached. In 2017, a group of Members, including Canada, co-sponsored a first Joint Ministerial Statement affirming the importance of good regulatory practice to trade in services and called on Members to intensify work towards concluding a set of disciplines. The JSI on Services Domestic Regulation negotiations has been conducted as an open process, wherein any interested Members may participate. In May 2019, Canada and 59 other Members participating in the open negotiations adopted a second Joint Ministerial Statement, recognising the progress made and targeting an outcome for the 12th WTO Ministerial Conference in June 2020.  

Domestic policy considerations

Canada has been an active and constructive participant in the JSI negotiations on Services Domestic Regulation. This reflects Canada’s clear interest in establishing enhanced WTO rules that can benefit Canadian services exporters when they engage with licensing and certification authorities abroad. It is not expected that the WTO rules will require any changes to Canadian domestic practices, given Canada’s practices already exceed the minimum standard the WTO rules would set out. Finally, it is notable that Canada has taken the opportunity through the negotiations to further efforts at making trade more inclusive by tabling a provision on gender equality. If included, this provision would require that any criteria related to an authorization to supply a service must not discriminate between men and women.

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