Fri, Jan 18, 2019 - Page 1 News List

Government opposes UK proposal on services rules

Reuters, GENEVA, Switzerland

The World Trade Organization’s headquarters are seen in Geneva, Switzerland, on July 26 last year.

Photo: Reuters

Taiwan has objected to Britain’s proposed rules for managing its trade in services if it leaves the EU and has requested negotiations at the WTO, according to a document seen by reporters on Wednesday.

Britain in 2016 voted in a referendum to leave the EU, which has spoken for Britain on trade matters ever since the WTO was founded in 1995.

As part of the Brexit divorce, Britain needs its own WTO membership texts, known as schedules, to set out how it will treat its trading partners in goods and services.

Last month, Britain formally submitted its proposed new services schedule to the WTO.

The process would replicate existing arrangements as far as possible and was “only a technical exercise,” British Secretary of State for International Trade Liam Fox said.

In a document circulated to other WTO members on Wednesday, Taiwan raised objections, saying that the new text made more than purely technical changes.

Taipei looked forward to “entering into consultations expeditiously with the United Kingdom in order to reach a satisfactory resolution to this matter,” the document read.

It cited eight sections where it had objections, mainly clauses that were no longer relevant or necessary.

However, in financial services and aircraft leasing and rental, Taiwan said that the new schedule would leave it with less market access than it had previously.

“Current European Union commitments require European Union member states to allow airlines to lease aircraft registered anywhere in the European Union. However, the United Kingdom has changed this obligation to require United Kingdom airlines to lease aircraft registered in the United Kingdom,” the document read.

“This appears to reduce market access, as the scope of where aircraft may be registered has been reduced. The United Kingdom should delete this limitation,” it added.

Similarly, in financial services, there were several areas where the EU schedule included a requirement for establishment in the EU, the document read.

“The United Kingdom changed ‘EU’ to ‘UK’ for these entries in its draft schedule. This would appear to reduce market access, as it reduces the geographical scope of establishment,” it read.

If Taiwan and potentially other WTO members press Britain for improvements to the text, Fox might need to offer them compensation by opening up trade in other areas, although any such liberalization would apply across the WTO.

Britain is facing similar objections to its goods schedule, with widespread dissatisfaction among agricultural suppliers.

Failing to reach a rapid agreement might be a bureaucratic headache and add to criticism of the Brexit process, but it would not affect the Brexit timetable. Many WTO members trade without finalized schedules, on the understanding that they are trying in good faith to reach an agreement in the meantime.

Minister Without Portfolio John Deng (鄧振中), head of the Office of Trade Negotiations, yesterday told the Central News Agency that given the uncertainty over Brexit, the proposed schedules would not necessarily be adopted.

However, in the event that the proposed rules are adopted, Taiwan’s rights would therefore be affected and it would then request negotiations, Deng said, adding that most WTO members with trade relations with the UK have also expressed a similar intent.

Additional reporting by CNA

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