Globalization
Panel 3: Domestic Preparedness: The Challenges of Trade Liberalization and Globalization
Domestic Preparedness of India: The Challenges of Trade Liberalization and Globalization
by Pranav Kumar* and Archana Jatkar**
Since the 2001 WTO Doha Ministerial Conference there has been a fundamental shift in India's position on services. From leading the opposition during the Uruguay Round it has now become a forerunner of service trade liberalisation under the GATS (General Agreements on Trade in Services) agenda. This more recent negotiating stand on services is attributable to the growing importance of the service sector in its economy and its trade and investment flow. With a large pool of skilled and qualified people in its work force, India has a huge interest in export of services especially in cross border supply (Mode 1) and presence of natural persons (Mode 4) as India has comparative advantage in these two modes of supply services. To sustain the dynamism of services, India needs to access foreign market’s counter current and potential protection. However, before access to foreign markets, the priority calls for the domestic preparedness of the country for said liberalisation in trade in services.
This paper analyses the domestic preparedness of India taking into consideration three major factors: domestic regulatory framework; generating export surplus; and safeguards. It will do so by:
1. Scrutinising the current state of domestic preparedness in terms of regulatory framework export enhancement and safeguards.
2. Examining features and extent of service sector liberalisation in India.
3. Examining experiences and growth in the commitments made by India in GATS negotiations and implications thereon.
4. Exploring the potential areas where further commitments can be done and the scope for new commitments along with probable concerns associated with it.
5. Suggesting ways to improve domestic preparedness and safeguards to be followed to have a better negotiating position.
These will be analysed by reviewing the literature on existing domestic regulations in India and it’s obligation under General Agreement on Trade in Services (GATS) of WTO. The paper will look at ways to improve the domestic preparedness and safeguards to be followed in order to facilitate effective liberalisation of trade in services.
* Pranav Kumar is a Policy Analyst at the Consumer Unity and Trust Society (CUTS), Center for International Trade, Economics & Environment (CITEE), Jaipur, India.
** Archana Jatkar is an Assistant Policy Analyst at the CUTS Center for International Trade,
Economics & Environment (CITEE), Jaipur, India.
Tourism: A Sustainable Service Sector for South Asian Trade
Lesson from Nepal's Experience
by Rojan Bajracharya*, Nephil Matangi Maskay** and Amrit Bahadur Rai***
South Asia has enormous potential to cultivate tourism as a sustainable sector of trade, which can spurt the region's efforts for economic growth, development and poverty alleviation. Despite this acknowledgement, the nations of this region have been unable to tap the opportunity of tourism trade due to the absence of regional commitment at the tourism front which is important for: i) the tourist flow between the South Asian countries; ii) the tourist inflow from outside the region; and iii) facilitation in the overall trade integration between South Asian countries due to the spillover effect of tourism trade. The theme of this paper deals with globalization and highlights the importance of regional commitment for promoting tourism at the South Asian level with reference to the experience of Nepal, a founder member of SAARC, and a major player in the regional tourism trade. Thus, the objectives of the paper are: 1) to discuss on the crucial issues related to the region's preparedness for ensuring inclusion of tourism trade in regional agreements, such as SAFTA, and, 2) to recommend further policy measures to enhance such preparedness, in view of. the country study of the Nepal's experience.
In this regard, the paper utilizes data from Government of Nepal and Nepal Rastra Bank source to review country's trade, visa regime, immigration and frontier procedures, tourism plan, export promotion policies and transport connectivity; and bring out five issues for enhancing a nation’s preparedness. These five issues are: Law and Regulation; Governance; Trade Facilitation and Infrastructure; Implementation Capacity; and Skill. The paper finds that the more liberal policies with reference to the above five issues particularly in terms of export promotion (viz. package tour and regional marketing strategy), visa regime, immigration and frontier procedure; and civil aviation are necessary for tourism promotion but they are not sufficient for enhancing tourism flow. Further, the paper highlights that how the inclusion of tourism in SAFTA would provide economic opportunities in the region that would in turn encourage the overall peaceful political environment and diplomatic relation within the region which appears to be important, especially to enhance tourists from developed countries. The major findings from Nepal's experience for South Asia in terms of regional commitment in tourism are to continue addressing the above mentioned issues for enhancing tourist flow that would in turn influence the settlement of territorial conflicts and terrorism and hence lead to sustainable South Asian Economic Community.
Acknowledgment: Standard disclaimers apply with the views expressed being those of the authors alone and not necessarily representing those of the Government of Nepal, the Nepal Rastra Bank, Technical Review Group Pvt. Ltd or any other author affiliated institutions.
* Rojan Bajrachraya is a Research Officer of Technical Review Group Pvt. Ltd., Kathmandu and he has participated in research projects funded by ADB and GDN on trade related issues of South Asia and Nepal in particular.
** Dr. Nephil Matangi Maskay is a Deputy Director at the Nepal Rastra Bank (Central Bank of Nepal) and is presently deputed to National Planning Commission, Government of Nepal. He is a trade specialist.
*** Amrit Bahadur Rai is an Under Secretary at the Ministry of Foreign Affairs, Government of Nepal. Previously, he had been working at the Ministry of Culture, Tourism and Civil Aviation, Government of Nepal.
Domestic Preparedness under GATS Related Services Trade Liberalization
by Sobia Nazeer Ahmad* and Mehnaz Ajmal Pracha**
As the fastest growing sector in the Pakistani economy, which accounts for 58 percent of the GDP and employs approximately 40 percent of the labor force (Qureshi, 2007) , the services sector’s significance and potential for Pakistan’s development can no longer be ignored. Officials at the Ministry of Commerce in Pakistan look upon the services sector as having ‘critical importance’ due to its development implications and hence prioritized it (along with the agricultural sector) in the 2006-07 Trade Policy.
Within the Trade Policy, the first step marked for immediate action was desegregation of the balance of payment figures in order to carefully scrutinize import and export trends for sub sectors. The second step was requesting the Deputy Chairman Planning Commission to develop sectoral strategies for the service sectors in order to tie them in with WTO negotiations at the Doha Development Round. This is essential, since the WTO provides a forum where export and import opportunities can be negotiated with member countries, thereby allowing a country such as Pakistan rule based market access. As party to the General Agreement on Trade in Services (GATS), Pakistan has made a schedule of commitments whereby services sectors in the economy are liberalized and horizontal, market access and national treatment commitments are specified.
This paper aims to analyze Pakistan’s domestic preparedness in light of the GATS negotiations and subsequent commitments. We aim to study the current domestic consultation process that underpins the multilateral negotiating stance, as well as focus on the ‘implementation issues’ of current commitments. Towards the end, recommendations to strengthen domestic policy support to multilateral commitment will be suggested.
* Sobia Nazeer Ahmad is a former Research Associate of Sustainable Development Policy Institute (SDPI). She has done her MSc in Global Politics from the London School of Economics (U.K). Her main areas of interest are the Political Economy of Development and Political Economy of Earthquake Rehabilitation.
** Mehnaz Ajmal Paracha is a Project Associate at the Sustainable Development Policy Institute, (SDPI), Islamabad, Pakistan.
Keynote Address by the Commerce Minister of Pakistan as presented by the Additional Secretary of the Ministry of Commerce, Mr. Nasim Qureshi, 17 March 2007.
Humayun Akhtar Khan, Minister for Commerce, Trade Policy speech, 17 July 2006.
Domestic Preparedness: The Challenges of Liberalization of Trade in Services in Sri Lanka
by Deshal De Mel*
The paper examines the opportunities and challenges faced by Sri Lanka in the pursuit of liberalization of trade in services. Sri Lanka has one of the most liberal services sectors in South Asia, particularly in mode 1, 2 and 3. Nonetheless, Sri Lanka’s commitments in trade in services in the GATS are very limited. Furthermore, services will be on the agenda in SAFTA and BIMST-EC, and Sri Lanka is in the process of signing a services agreement with India and will shortly embark on such an agreement with Pakistan as well. Whilst it is in Sri Lanka’s interest to engage in such multilateral and bilateral services agreements, there are many challenges that need to be addressed.
The paper examines the telecommunications sector as a case study since Sri Lanka has made commitments in GATS in telecom, but is expected to receive further requests for liberalization of this sector. It is clear that the domestic regulatory framework is not conducive to further liberalization at this stage – primarily because the regulations as they stand do not create a good market environment to enable new players to compete effectively. Using telecommunications as a case study, the paper examines the potential for further liberalization, in particular the overall regulatory framework in the country in major service sectors. It turns out that most service sectors in Sri Lanka lack effective regulatory frameworks to manage international competition. This is unfortunate given the potential benefits Sri Lanka stands to gain through increased foreign participation in many services. The paper provides a background to the services sector in Sri Lanka, the liberalization that has taken place thus far at multilateral, regional and bilateral levels and examines the potential for further liberalization – elaborating on the opportunities and challenges inherent in this process.
* Deshal De Mel is a Research Officer at the Institute of Policy Studies, Sri Lanka.
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