Transcript Services Trade Liberalization Under Mode 4 Perspectives

Services Trade
Perspectives from Nepal
hemant dabadi
South Asia Watch on Trade Economics &
Environment
Contents
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Importance of services in
Nepal’s economy and trade
Nepal’s commitments on
Services in the accession
process
Issues of Nepal’s Interest
The Way Forward
Importance of services in Nepal’s economy
and trade
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Services contributing about two fifth
(40%) of the GDP
Share of services in the GDP growing
from about 30% in 1980 to over 40% in
2004/05 (there was a break in the
growth because the economy was
suffering from slow growth in recent past
mainly attributed to insurgency
Share of Services still lower than in other
South Asian countries
Services will witness higher rate of
growth in future too
Growth of services higher than growth of
agriculture and industry
Importance of services in Nepal’s………,
contd.
Country/Region
Agriculture
Industry
Manufacturing
Services
1990
2003
1990
2003
1990
2003
1990
2003
Bangladesh
30
(2.1)
22
(3.1)
21 (6.0)
26
(7.1)
13 (5.2)
16 (6.8)
48 (3.8)
52
(4.7)
India
31
(3.1)
22
(2.7)
28 (6.9)
27
(6.0)
17 (7.4)
16 (6.5)
41 (6.9)
51
(7.9)
Nepal
52
(4.0)
41
(2.8)
16 (8.8)
22
(6.0)
6 (9.3)
8 (6.7)
32 (3.9)
38
(5.5)
Pakistan
26
(4.0)
23
(3.7)
25 (7.7)
23
(3.9)
17 (8.1)
16 (4.2)
49 (6.8)
53
(4.3)
Sri Lanka
26
(2.2)
19
(1.5)
26 (4.6)
26
(5.8)
15 (6.3)
16 (6.6)
48 (4.7)
55
(5.3)
China
27
(5.9)
15
(3.5)
42
(11.1)
52
(12.3)
33
(10.8)
39
(11.7)
31
(13.5)
33
(8.8)
Low
income
countries
32
(2.8)
24
(3.0)
26 (4.6)
27
(5.0)
15 (6.1)
14 (5.6)
41 (5.1)
49
(5.9)
Middle
income
countries
15
(3.6)
10
(2.2)
39 (2.6)
36
(4.2)
24 (4.0)
22 (6.1)
46 (3.1)
54
(3.5)
High
income
countries
3 (1.8)
2
(1.2)
33 (3.0)
27
(1.9)
22 (--)
18 (2.5)
65 (3.4)
71
(3.1)
World
5 (2.7)
4
(1.9)
34 (3.0)
28
(2.3)
22 (--)
18 (3.2)
61 (3.4)
68
(3.2)
Importance of services in Nepal’s………, contd.
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Services exports above 10% of GDP (national bop
statistics)
Commercial service exports increasing and as
percent of GDP only second to Sri Lanka in the region
Nepal’s export of commercial services as per cent of
GDP above the world average.
Nepal’s per capita commercial services export
($9.9) still low. World average $275
Travel related services dominating (about 66%) in
Nepal’s commercial service export
Remittance very important source of foreign
exchange earnings
Poverty reduction percentage of people below
poverty line) from 42 to 31 % in 1993 – 2003 decade
attributed to remittances
Importance of services in Nepal’s………,
contd.
Country/Region
Bangladesh
Commercial
Service Exports
($ million)
Population
(million)
Commercial
service export
(Per capita)
398
138.1
2.88
India
25043
1064.4
23.53
Nepal
302
24.7
12.23
Pakistan
1475
148.4
9.94
Sri Lanka
1386
19.2
72.19
China
46375
1288.4
36
Low Income
countries
32671
2311.9
268567
2988.6
Middle Income
countries
14.13
89.86
High Income
countries
1427894
972.1
World
1729132
6272.5
1468.88
275.67
Importance of services in Nepal’s………,
contd.
Country/Re
Transport
Travel
Insurance &
Computer,
gion
financial
services
information
,
communica
tions, and
other
commercial
services
1990
200
3
1990
200
3
1990
2003
1990
200
3
Bangladesh
12.9
18.1
6.4
14.3
0.1
8.1
80.6
59.5
India
20.8
10.9
33.8
12.5
2.7
1.5
42.7
75.1
3.6
11.9
65.6
65.9
--
0.2
30.8
22
Pakistan
59.3
56.7
12
8.1
1.4
2.3
27.3
32.8
Sri Lanka
39.7
40.5
30.2
30.6
4.2
3.5
25.9
25.4
China
47.1
17.0
30.2
37.5
3.9
1.0
18.7
44.4
Low
income
countries
29.2
16.3
28.4
19.7
2.5
1.8
40.3
62.4
Middle
income
countries
27.0
24.1
45.4
46.9
3.2
2.6
25.0
26.5
Nepal
Nepal’s commitments in Services
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General commitments
• No limit in cross border supply
• Limit of us $ 2000 per annum for
Nepalis going abroad
• Condition for existing foreign supplier
not to be more restrictive than they
exist at the time of Nepal’s accession to
WTO
• movement of natural person kept
unbound or restrictive except in the
categories of services sales persons,
persons responsible for setting up a
commercial presence, and intracorporate transferees
Nepal’s commitments in Services
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General commitments
• No limitation on national treatment for
commercial presence except
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Prior approval from Department of Industry
for Foreign investment
Foreign forms can be barred from incentives
and subsidies provided only to wholly nepali
owned firms and companies
• Decision on foreign investment to be
provided within 30 days
• Repatriation of profits and devidends,
royalties, loans and interest, proceeds
from sales of equity allowed ,
Nepal’s commitments in Services
Specific commitments (Mostly based on limit on
foreign equity participation under mode)
• Up to 51% in accounting, auditing;
veterinary services; research and
development; rental/leasing without
operators; market research; management
consulting; technical testing; packaging;
printing and publishing; convention; general
construction work for civil engineering;
distribution services; franchising; higher,
adult and other education; sewage, refuse
disposal; hospital; tourism (travel agency
and tour operators); cinema theatre
including cinema projection services (in
some cases the percentage to be increasd
after 5 years)
Nepal’s commitments in Services
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Specific committments
• Up to 67% in architectural services;
engineering services; integrated
engineering services; urban planning and
landscaping; advertising services; and
financial services
• Up to 80% in computer and related
services; courier services; basic
telecommunications; mobile
telecommunications services; value added
telecommunications; wholesale trade
services of radio and television equipment,
musical instruments, and records, music
scores and tapes; hotel and lodging (star
hotels only) and graded restaurants
• Minimum investment prescribed($1million
in cinema projection)
Ongoing WTO negotiations and issues of
Nepal’s interest
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Nepal not required to make additional
commitment
Effective implementation of Modalities for
the Special Treatment for LDC Members in
Negotiations on Trade in Services,
particularly related to mode 4.
Additional and commercially meaningful
commitments in initial and revised offers,
particularly under mode 4.
De-linked mode 4 offers from Mode 3.
Elimination of pre-employment
conditions, ENTs / LMTs.
Ongoing WTO negotiations and issues of
Nepal’s interest
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Qualification requirements and recognition.
Quota restrictions on visas (GATS Visa), and
restriction on duration of stay.
Immigration and security issues.
Discriminatory tax treatment (so called social
security payments)
Minimum wage Issue (comparative
advantage is lossed)
Issues of social security (social dumpingexploitation of foreign workers and increase
unemployment at destination country).
Movement of low and semi-skilled persons.
The Way Forward
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Effective and skillful participation in
on-going WTO negotiations to seize
the opportunities unlocked by WTO
membership
Identification of sectors/sub-sectors
of Nepal’s comparative advantage and
export interest
Identification of countries where
Nepal can supply services persons
Human resource development as per
the
requirements
of
identified
sectors/sub-sectors and countries.
The Way Forward
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Establishment of appropriate institutions to
finance education and human resource
development
Establishment of an institutional mechanism
that assists in the overseas job search, in
visa preparation, and in travel arrangements
Increase
participation
organizations
of
professional
Alignment with developing countries and
LDC group to raise voices in WTO forums
are necessary to seize the benefits of
services trade liberalization under mode 4
Thank You Very Much.