India to drag Australia to WTO arbitration on services trade commitments

NEW DELHI: In a first, India has dragged Australia to arbitration at the World Trade Organization (WTO) as Canberra is making changes to its commitments which New Delhi believes could impact its services trade.

These commitments seek to mitigate unintended trade restrictive effects or measures relating to licensing and qualification requirements.

The new disciplines on services domestic regulation is expected to lower trade costs by over $125 billion globally and around 70 countries have committed to them.


“Australia was making changes to its services commitments which India believes affects its rights and obligations at WTO,” said an official.

WTO disputes can be resolved through the arbitration process. An arbitration can be initiated at any stage of a dispute, including on appeal from a panel decision.
However, this arbitration is completely different from recourse to arbitration instead of a panel or Appellate Body.

Over 70 members like the UK and UAE, have agreed to take on additional obligations in the services sector under an agreement of the WTO to ease non-goods trade among themselves and extend similar concessions to all other members of the organisation.

Indian professional companies would seek to benefit from such commitments as they will now have equal opportunity to access markets in these 70 countries, if they meet the standards.

“India and Australia entered into negotiations with a view to reaching an agreement…However, no agreement could be reached,” India told the WTO on Monday.

India identified itself as an “affected member”.

Though the disciplines are to be applied on a “most-favoured nation” principle meaning that they will benefit all WTO members, Australia is keen to stick to its commitments under a Joint Statement Initiatives (JSI) on services domestic regulation.

“We opted for arbitration as Australia and are objecting to the JSI,” said another official.

India and other developing countries have opposed to various JSIs at the WTO as they are negotiated among a group of members and are not multilateral in nature.