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World Trade Organisation Joint Statement Initiative on Services Domestic Regulation

The entry into force of the disciplines marked the first outcome on services at the WTO in more than 20 years. For Canada, these disciplines took effect on May 22, 2024.

On December 2, 2021, Canada along with 66 other WTO Members endorsed a Declaration announcing the conclusion of negotiations.

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Benefits of new trade rules for services

The negotiated JSI DR disciplines contain new trade rules that provide greater transparency and predictability in the regulatory environment for services and lead to better economic performances. For example, the new rules aim to do this by ensuring that licensing authorities are transparent with respect to the criteria they consider when evaluating an application and that such applications are processed in a timely manner.

The initiative has the potential to help address the challenges faced by Canadian service providers, and especially micro, small and medium enterprises (MSME) who are typically less equipped to navigate opaque and costly requirements procedures. The agreement also includes the first binding provision on non-discrimination between men and women within the WTO framework. This provision represents a key milestone in Canada's leadership promoting women's economic empowerment and a significant step towards making trade rules more inclusive.

The JSI DR disciplines reinforce good regulatory practices. While Canada's domestic practices already exceed the agreed minimum standard, these new WTO rules will undoubtedly support Canadian services exporters in markets where Canada has no bilateral free trade agreements, as transparency and predictability play a major part in overall trade openness and ease of doing business. An Organisation for Economic and Cooperation and Development (OECD) study^{Footnote 1} estimates that JSI DR disciplines could reduce services trade costs by around 7% on average in the Asia-Pacific Economic Cooperation (APEC) region and 6% for the G20, which translates to total trade cost savings in the range of USD 75 billion for APEC economies and USD 140 billion for the G20.

The benefits of these new disciplines will be extended to all WTO Members, regardless of their participation in the JSI DR. These disciplines will generally apply to the sectors covered in a Member’s Schedule of Specific Commitments.

Background

In the context of services negotiations at the WTO, the term domestic regulation is used to refer to measures related to an authorization to supply a service, such as a licensing requirement or procedure, other than those disciplined by the . The GATS, which entered into force in 1995, does not include finalized rules on domestic regulations, but instead contains a mandate for future negotiations on the matter. 

WTO multilateral negotiations aimed at achieving disciplines on domestic regulation took place over several years after the operationalization of the GATS, but a successful outcome was not reached. In 2017, a group of Members, including Canada, co-sponsored a  affirming the importance of good regulatory practice to trade in services and called on Members to intensify work towards concluding a set of disciplines. In May 2019, Canada and 59 other Members participating in the open negotiations adopted a , recognizing the progress made and targeting an outcome at the 12th Ministerial Conference (MC12), in June 2022. Due to delays related to the COVID-19 pandemic, JSI participants formalized the conclusion of negotiations on December 2, 2021.