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India to pitch Trade Facilitation in Services at WTO

India will make a presentation on the proposed Trade Facilitation in Services (TFS) Agreement to World Trade Organisation (WTO) Director General Roberto Azevedo and India Inc.

The global pact proposed by India to boost services trade at the WTO-level aims to ease norms including those relating to movement of foreign skilled workers and professionals across borders for short-term work.

The proposed services pact is similar to the Trade Facilitation Agreement (TFA) in Goods adopted by the WTO Members in 2014 at Bali Summit to ease customs norms for boosting global goods trade.

Some proposed features TFS Agreement
  • Covers measures across all modes of supply for services delivery in cross-border trade, related to entry into the market as well as those applied post-entry.
  • Seeks to ensure portability of social security contributions, as well as make sure charges or fees for immigration or visas transparent, reasonable and non-restrictive in nature.
  • Pave the way for a single window mechanism for foreign investment approvals. Ensure cross-border insurance coverage to boost medical tourism.
  • Ensure publication of measures impacting services trade and timely availability of relevant information in all the WTO official languages as well as free flow of data and information for cross-border supply of services.

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India moves to WTO against US on temporary working visa issue

India has filed a complaint against the United States decision to impose high fees L-1 and H-1B categories of temporary working visas in the World Trade Organisation (WTO).

US had imposed fees on certain applicants for L-1 and H-1B categories of non-immigrant temporary working visas into the country,

According to India

  • US measure is inconsistent with the global norms and it would impact Indian IT professionals as it makes Indian IT companies less competitive in that market.
  • These measures appear to be “inconsistent” with the terms, limitations and conditions agreed under the GATS (General Agreement on Trade in Services).

Background

  • Earlier in 2015, US President Barack Obama had signed into law of spending package which had introduced a hefty $4,000 fee for certain categories of H-1B visa and $4,500 for L1 visa.
  • Under this law, companies having more than 50 employees and having more than 50 per cent of their US employees on H-1B and L1 visas were forced pay the new fee from April 1, 2016.
  • H-1B and L1 visas are temporary work visas for skilled IT professionals to work in US and India is the largest user of both H1B and L1 visas.

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Union Cabinet gives approves Trade Facilitation Agreement

The Union Cabinet has approved a proposal to notify the Trade Facilitation Agreement (TFA) of the World Trade Organization (WTO).

Decision in this regard was taken by Union Cabinet meeting chaired by Prime Minister Narendra Modi in New Delhi as per India’s consonance of ‘ease of doing business’ initiative.

The proposal regarding ratification and acceptance of the instrument of acceptance of protocol of TFA to WTO Secretariat was also approved by the Union Cabinet.

National Committee on Trade Facilitation

The Union Cabinet also has decided to constitute National Committee on Trade Facilitation (NCTF) to facilitate both domestic coordination and implementation of the provisions of the Agreement. NCTF will be set up under the Joint Chair of Secretary under the aegis of Union Ministry of Commerce and Industry’s Department of Revenue and Secretary, Department of Commerce.

What is Trade Facilitation Agreement (TFA)?

  • The TFA is the WTO’s first-ever multilateral accord that aims to simplify customs regulations for the cross-border movement of goods.
  • It was outcome of WTO’s 9th Bali (Indonesia) ministerial package of 2013. The agreement includes provisions for
  • Lowering import tariffs and agricultural subsidies: It will make it easier for developing countries to trade with the developed world in global markets.
  • Abolish hard import quotas: Developed countries would abolish hard import quotas on agricultural products from the developing world and instead would only be allowed to charge tariffs on amount of agricultural imports exceeding specific limits.
  • Reduction in red tape at international borders: It aims to reduce red-tapism to facilitate trade by reforming customs bureaucracies and formalities.

The TFA shall enter into force for the notified members upon acceptance by two-third (107 countries) WTO Members. So far 69 countries of the 162 WTO members have ratified this pact.

If this agreement is properly implemented, it may create US 1 trillion dollars’ worth global economic activity which may add 21 million new jobs and lower the cost of doing international trade by 10 to 15%.

Background

Earlier Union Government had refused to ratify TFA till its concerns about public stockholding for food security are resolved. But in order to address India’s concerns WTO had agreed to amend the Bali agreement, providing India an indefinite reprieve on food stockholding.

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