Sound In­dian Move on Ser­vices Trade

In­dia has to do its bit for mul­ti­lat­er­al­ism

The Economic Times - - The Edit Page Longer Lifespan -

In the back­ground of the World Trade Or­ga­ni­za­tion’s Trade Fa­cil­i­ta­tion Agree­ment for cross-bor­der com­merce in goods com­ing into force on Fe­bru­ary 22, In­dia has done well to press ahead with its pro­posal for a sim­i­lar agree­ment for ser­vices. It is wel­come from two per­spec­tives. One is re­ju­ve­nat­ing a list­less mul­ti­lat­eral process of reach­ing agree­ment on trade, which had been squeezed, on the one side, by short­sighted re­fusal on the part of mem­ber coun­tries, in­clud­ing In­dia, to reach agree­ment even on sub­jects on which dif­fer­ences be­tween par­ties are mi­nor, and, on the other, by a shift in pref­er­ence to re­gional trade agree­ments. Now that pro­tec­tion­ist ten­den­cies are rais­ing their head in sev­eral ad­vanced coun­tries, in­clud­ing in the US, it makes em­i­nent sense to re­in­force the mul­ti­lat­eral trade fo­rum, the WTO.

The other per­spec­tive from which In­dia’s present ini­tia­tive is wel­come is that ser­vices, trade in which has been grow­ing faster than trade in goods, per­mit In­dia to make com­mon cause with in­dus­trial coun­tries, which dom­i­nate the trade. In­dia’s rank in trade in ser­vices is sev­eral notches higher than its rank in trade in goods. In­for­ma­tion tech­nol­ogy-re­lated pro­fes­sional ser­vices oc­cupy the spot­light, thanks to the pro­posed tight­en­ing of H-1B visas in the US. But In­dia is un­able to tap in full the po­ten­tial for, say, med­i­cal tourism be­cause in­surance in the home coun­try of the tourist is not read­ily por­ta­ble across borders and hos­pi­tals in In­dia do not get ac­cred­ited for treat­ment. In the jar­gon, H-1B visas re­late to Mode 4 de­liv­ery of ser­vices, in which peo­ple cross borders to that end. Med­i­cal tourism is Mode 2 trade in ser­vices, in which the ser­vice buyer trav­els to the ex­port­ing coun­try. Is­sues in all four modes have to be tack­led. The grow­ing trade in au­dio-vis­ual con­tent of­fers com­mon cause for Hol­ly­wood and Bol­ly­wood, pro­vided In­dia demon­strates the will to en­force pro­tec­tion of in­tel­lec­tual prop­erty.

The gov­ern­ment’s move to rally sup­port from G20 and Brics na­tions is sound. What In­dia must pre­pare for is to give, not just take, when it comes to trade ne­go­ti­a­tions.

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