India is seeking arbitration proceedings before Aus under the WTO rules on services
India has sought arbitration proceedings against Australia under WTO rules to resolve an issue related to the services sector as it could impact trade in services in New Delhi, an official said.
The official said India has already communicated with the World Trade Organization (WTO) on its request for arbitration on the issue.
On November 17, 2023, Australia notified the WTO Secretariat of its intention to amend its list of specific obligations under the General Agreement on Trade in Services (GATS) to include additional obligations regarding domestic regulation of services to take.
GATS is a WTO agreement that entered into force in 1995. India has been a member of the Geneva-based organization since 1995. The WTO is a global trade watchdog and settles trade disputes between member states.
As an “affected member”, India has stated that Australia’s proposed change to its specific obligations does not meet certain conditions, the official said.
“After this, India and Australia started negotiations with a view to reaching an agreement. The period for completing these negotiations was extended by mutual agreement until April 19, 2024. However, no agreement could be reached. India hereby requests arbitration proceedings with Australia,” the official said.
In February, more than 70 WTO countries agreed in Abu Dhabi to take on additional obligations under the General Agreement on Goods in Services (GATS) to facilitate trade between them in non-goods and extend similar concessions to all other members of the WTO.
These obligations under their schedules in the GATS are intended to mitigate unintended trade restrictive effects or measures relating to licensing requirements and procedures, qualification requirements and procedures and technical standards among themselves.
It will also benefit Indian professional companies, who will now have an equal opportunity to access the markets in these 70 countries, if they meet the standards.
It is estimated that this measure will help reduce trade costs in the services sector by 10 percent for lower-middle-income economies and 14 percent for upper-middle-income economies, with a total saving of $127 billion.
WTO disputes can be resolved through the arbitration process.
Another official said the arbitrator would decide how much impact it would have on India.
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First print: June 6, 2024 | 12:30 pm IST