Chair and Discussant: Mr. Mohammad Sulaiman, Economic Consultant, Islamabad, Pakistan
Panel Organizer: Ms. Mehnaz Ajmal Paracha, Project Associate, SDPI, Islamabad, Pakistan
Mr. Deshal de Mel, Research Officer, Institute of Policy Studies (IPS), Colombo, Sri Lanka, presented his paper on “Domestic Preparedness: The Challenges of Liberalization of Trade in Services in Sri Lanka”, focusing on the telecom sector. Despite Sri Lanka’s commitments in GATS, telecom sector is far from perfect in terms of regulatory rigor that would provide security for investment. Sri Lanka has made commitments to implement the Telecom Reference Paper in the negotiation rounds. In practice most of the commitments have not been met, however, for further liberalization the Reference Paper Commitment is a successful initiative of domestic preparedness. Nevertheless, most of the time, the implementation of Sri Lanka’s schedule of commitments remains weak. Recommendations to curb weak implementation were suggested. Sri Lanka should focus on tightening up domestic regulatory frameworks and improve the capacity of the regulator through increased financial independence, which could result in realistic and useful commitments under the telecommunication sector in future negotiations. It was pointed out that in Sri Lanka, many professional services associations lack regulatory and legislative capacity to effectively regulate even local service providers. This capacity can be improved if there is increase in foreign participation in service sectors in Sri Lanka. This would provide greater access to foreign expertise and technology whilst triggering competition and investment that would be beneficial to consumers in Sri Lanka. However, in order to enjoy these potential benefits, the regulatory environment needs improvement.
Mr. Rojan Bajracharya, Research Officer, Technical Review Group Pvt. Ltd., Kathmandu, Nepal, in his paper titled “Tourism - A Sustainable Service Sector for South Asian Trade: Lesson from Nepal’s Experience” provided a critical analysis of Nepal’s tourism sector in terms of preparedness. Tourism in South Asia has great service potential sector, which should be included in SAFTA in order to invite the regional Foreign Direct Investment (FDI) flow and to develop a regional marketing link, which will enhance the tourist flow in the region. He explained the positive measures on trade policy taken by Nepal Government. According to the Nepali experience on trade of tourism, it was pointed out that the South Asian region needs to address the five issues which can contribute in the promotion of the tourism trade. These areas of attention include law and regulation, governance, trade facilitation and infrastructure, implementation capacity and skill. Not only this but there is also a need for a liberal trade policy regime which can liberalize visa regime, transport connectivity and regional tourism promotion strategy for regional preparedness to include tourism in SAFTA. Furthermore, the effective security measures, particularly in terms of tourist flow record, should also complement the liberal policy to minimize the security threat. By including tourism trade in SAFTA; the region can get the economic opportunity, which can be utilized to address the economic inequality, and can increase the people to people contact, which can neutralize the region’s political tension. 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.
Ms. Mehnaz Ajmal Paracha, Research Associate from SDPI, focused on Pakistani service sectors in her paper on “Domestic Preparedness under General Agreement on Trade in Services”. She examined different aspects of domestic policy and several regulatory authorities’ competency and efforts towards liberalization. It was pointed out that GATS allows members countries to enforce regulations that meet the national policy objectives and effective regulatory regimes are crucial for trade liberalization. She said that liberalization commitments are benchmarked with domestic preparedness, and steps were taken to ensure that domestic regulatory reforms were dynamic and were in line with the multilateral commitments. She also deliberated upon the research findings of 20 different regulatory bodies under services sector including, Pakistan Engineering Council, Pakistan Council of Architect and Town Planners, etc. It was discovered that although the processes that underpins GATS negotiations at Geneva exist, they are weak and requires strengthening. At the first instance key informants at the Ministry of Commerce WTO Wing highlight that response to initial requests sometimes slackens due to the slow response from respective Ministries/sectoral regulatory bodies. There are a few cases where awareness of the GATS and its commitments are not fully understood by regulatory bodies, and as a result Pakistan cannot fully or comprehensively develop its negotiating position for that particular sector. In other instances, domestic rules and regulations are ambiguous and not clearly projected. The regulator environment is thought to be cumbersome and bureaucratic.
She identified the following weaknesses in regulators: lack of understanding of GATS; time inefficient inter-ministerial consultation; and, incoherence between trade policy and agreements, which should be rectified. The major proposal in this regard was to set up an implementation task force that would be supervised by a senior advisory group, which would comprise of one member from each service sector ministry. She stressed the need of Capacity Enhancement of the officials indirectly linked with the regulation and policy formation and the domestic service providers (staff/stakeholders) should have the understanding of international negotiations.
Most important is to improve the statistical coverage of services sector with disaggregated data to make clear to policy makers the value and shape of services trade. She recommended that there should be harmonization of technical regulations and the domestic service providers should be taken into confidence about international negotiations as well as they should be protected against foreign providers.
Discussion
During the question and answer session, it was added that Pakistan has made liberal offers to the WTO. Regulation is an issue due to the absence or ineffectiveness of the regulator. The panel concluded that further commitments are dangerous without giving careful consideration to each sector’s needs. Small service providers should be protected against multinational corporations and limits should be set as to how much liberalization should take place.
Mr. Muhammad Sulaiman, Economic Consultant and former Additional Secretary, Ministry of Commerce invited as the chair and discussant of the panel in his concluding remarks said that the consultations with the stakeholders on Pakistan’s negotiations position should be broad based where transparency should be ensured.
Reported by Mehnaz Ajmal Paracha and Ali Imran
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