Arpita Mukherjee Tanu M. Goyal
PROMOTING REGIONAL INTEGRATION THROUGH SERVICES SECTOR IN SOUTH AND SOUTH EAST ASIATAKING CASE OF INDIA‐THAILAND COMPREHENSIVE ECONOMIC COOPERATION AGREEMENT
Presentedat"TradeandInvestmentforTomorrow:PromotingAsia‐PacificRegionalIntegration” ARTNeTRESEARCHWORKSHOP,10‐12December2013Macao,China
11December2013
Layout of the Presentation
RationaleandObjectiveoftheStudyMethodology ApproachtheTarget Trends Analysis Findings
ConclusionandTakeaways
Layout of the Presentation
RationaleandObjectiveoftheStudyMethodology ApproachtheTarget Trends Analysis Findings
ConclusionandTakeaways
WhyarewelookingatservicesandwhyarewelookingatIndiaandThailand?Whatdoweintendtoachievebylookingatthem?
Why Services?
ServicesisanimportantcomponentofGDPofSouthandSouthEastAsia(over50%in2012)
Itisagrowingcomponentoftrade GrowthinSouthAsia’sshareinworld’sservicesexportandimportincreasedfrom1%in1990toaround4%in2010
ForEastAsia,theshareinworldservicesexportincreasedfrom8%in1990to12.8%in2010andshareinworldservicesimportincreasedfrom7.7%in1990to11.7%in2010
SouthandEastAsiahavetradecomplementaritiesinservices SouthAsiahasadvantageinknowledge‐basedserviceswhileEastAsiaininfrastructureandtravelservices
Withglobalslowdown,countriesintheregionareexploringnewmarketsanddiversifyingexportbasket
Services is a key component of trade agreements in South and East Asia – SATIS, AFAS, RCEP, TPP…
India
India’sintegrationwithEastAsiaisincreasing..
Source:ExtractedbyauthorsfromBaldwin(2007),Fig.1,page5(withmodifications)
Concludedagreements
Negotiationsongoing
Objective of the Study
Theobjective ofthisstudyistounderstandtheprospectsofenhancingservicestrade,investmentandco‐operationbetweenSouthandSouthEastAsia,takingtheexampleoftwocountriesfromeachregion—IndiaandThailand
WhyIndiaandThailand?• ServicesareagrowingcomponentofGDPinbothIndiaandThailand• Thailandisakeyplayeringlobalvaluechainingoods,whynotinservices?IndiahascompetitivenessincomputerservicesandtradeiswithlimitedcountriesoftheWest
• Thetwocountrieshavetradebarriersinservices.ThailandmorerestrictivethanIndia(49%FDIcap)– opensonbilateralbasis
• BothIndiaandThailandhasstrongMode4interest,butcategoriesdiffer• IndiaandThailandarecurrentlynegotiatingatradeagreement
Layout of the Presentation
RationaleandObjectiveoftheStudyMethodology ApproachtheTarget Trends Analysis Findings
ConclusionandTakeaways
Layout of the Presentation
RationaleandObjectiveoftheStudyMethodology ApproachtheTarget Trends Analysis Findings
ConclusionandTakeaways
Howdoweapproachtheobjective?Whatwehaveandwhatwelookfor?
Methodology
AgreementAnalysis:foranalysing andcomparingthearchitecturalelementsofThailandandIndia’sagreements,wewilluseFinkandMolinuevo(2008)
SchedulingApproach PositiveList,NegativeList,HybridApproachInvestment Coverage ,RelationshipbetweenServicesandInvestment
Chapter,RelationshipswithInvestmentAgreementsOtherIssues GovernmentProcurement,MutualRecognitionAgreement,
PrimarySurvey• Presenceandinterestineachothersmarkets–fillingdatagaps
• Statusandbarrierstomarketintegration
Understandwhatcanbeachievedfromthetradeagreementforenhancing
servicestrade
Layout of the Presentation
RationaleandObjectiveoftheStudyMethodology ApproachtheTarget Trends Analysis Findings
ConclusionandTakeaways
Layout of the Presentation
RationaleandObjectiveoftheStudyMethodology ApproachtheTarget Trends Analysis Findings
ConclusionandTakeaways
Understandingthepresenttrendoftradeinservices,interestsandbarriersandanalysingthestrategiesintradenegotiations
Services Sector Reforms
India• Reformsstartedin1991afterbalanceofpaymentcrisis
• LiberalisationandremovalofFDIrestrictionsinanumberofservices
• Dismantlingofpublicmonopoly• Encouragingpublicprivatepartnershipinanumberofsector
Thailand• Reformsstartedin1997afterAsianFinancialCrisis
• LiberaltradeandinvestmentregimeasapartofIMFaidrequirement
• MasterPlanforStateEnterpriseSector– stateenterprisesreducedfrom100to59
• Newregulationsinplace– theBankruptcyLaw(1940)andForeignBusinessAct(1999)
Theservicessectorreformpathandtriggerhasbeensimilar
TradeandInvestmentTrends– SecondaryAnalysis
NeedforaSurvey
Trends and Patterns
Trends in Trade in Services
Source: Compiled and calculated by the authors from UNCTAD Statistics,http://unctadstat.unctad.org/*In case of percentage share, share in total trade is calculated at a percentage of trade in goods and services
Year India ThailandExport Imports Total
TradeTradeBalance
Export Imports TotalTrade
TradeBalance
Value(inUS$Billion)
1990 4.6 6.1 10.7 ‐1.5 6.4 6.3 12.7 0.12000 16.7 19.2 35.9 ‐2.5 13.9 15.5 29.3 ‐1.62005 52.5 47.3 99.8 5.2 19.9 26.8 46.7 ‐6.92011 149 131 280 18 41.1 51.1 92.2 ‐9.9
PercentageShare*1990 20.5 20.5 20.5 21.8 16 18.52000 28.2 27.1 27.6 16.7 20 18.32005 34.5 24.9 29.2 15.3 18.5 172011 33.3 22.6 27.3 15.4 22.2 18.5
Comparative Advantages in Services
Source:CalculatedbyauthorsusingBalanceofPayments(BoP)databaseoftheIMF
RCAsofIndiaandThailandinServicesTradeServiceSectors INDIA THAILAND
2001 2010 2012 2001 2010 2012
Communications 2.79 0.51 0.51 0.37 0.55 0.41
Computers and Information 9.72 5.81 5.38 0.00 0.01 0.02
Construction 0.18 0.17 0.24 1.10 0.54 0.36
Financial 0.29 0.65 0.58 0.00 0.04 0.08
Government services 1.46 0.23 0.20 0.33 0.41 0.39
Insurance 0.85 0.58 0.78 0.35 0.08 0.35
Other business services 0.61 1.10 1.25 0.79 0.75 0.59
Personal, cultural and recreational 0.00 0.33 0.47 0.00 0.29 0.22
Royalties and Licence fees 0.04 0.02 0.03 0.01 0.07 0.07
Transportation 0.60 0.47 0.50 1.05 0.84 0.60
Travel 0.60 0.47 0.50 1.77 2.41 2.72
Service‐Wise Exports and Imports of Services from Thailand to India in 2010
Service Exports(in $million)
Per centShare
Service Imports(in $million)
Per centShare
Travel 307 79.2 Travel 40 30.2Transportation 12 3.0 Transportation 16 11.9Other Services 68 17.5 Other Services 73 55.1
Legal 34 8.7 Legal 26 19.4Governmentservice
1 0.3 GovernmentService
4 2.8
Fees and othercommissions
18 3.5
Royalties andlicence fees
2 1.6
Total 388 100 Total 132 100Source: Data provided by the Bank of Thailand during the survey
Overall,ThailandhasapositivetradebalanceinserviceswithIndia,whichisdifferentfrombothThailandandIndia’sglobaltradepatterninservices.Thailandisanetexporteroftravelserviceswhileanetimporterof
transportationandotherservices
Bilateral Investments in Services: India and Thailand In2012,FDIcontributedaround2.4percenttotheGDPofboth
countries InIndia,theservicessectorhasalargeshareinFDIinflows(64%) InThailandthemanufacturingsectorisalargerecipientthoughtheshareofserviceshasincreased
IndiaandThailanddonothavemajorinvestmentsineachother’smarket
FromApril2000toJuly2013,thecumulativeFDIinflowfromThailandwas$128.62million(ranked38th,0.06%share)
ServicessectorreceivedthehighestFDI Indiaisamongtop‐20investorsinThailand– invested$60millionin
2010alone ManufacturingsectorreceivedamajorityofFDI
Both countries have FDI restrictions
The Survey Primarysurveyofover180stakeholders
In‐depthinterviewsinThailand
Pan‐Indiasurveyusing
semi‐structuredquestionnaires
Stakeholdersconsultation
Sampling FrameProfile of Respondents Number of
RespondentsIndian Companies in Thailand 59Indian Associations 17Indian Professional Bodies 15Thai Companies in India 6Thai associations and professional bodies (Thai spaassociation, Association of Thai Travel Agents, etc.)
9
Academics and Sectoral Expertise 20In‐Depth Interviews in Thailand 20In‐Depth Interviews in India 25Central ministries/state governments/local bodies 5Embassy in Thailand 4Total Number 180
Thereareseveralservicesectordatarelatedissues–difficulttogetbilateraltradedata,Mode‐wisedataanddisaggregateddata
Thereforethereisaneedforaprimarysurvey
Carewastakentocovercompaniesacrossdifferentservices
SampleselectionwasbasedoninformationprovidedbyIndianandThaiembassies
Understandthepresenceineachothersmarketandthestatusandbarrierstomarketintegration
Preliminary Survey Findings – Indian Companies
• 51%oftheIndiancompaniesinThailandoperatethroughagentsanddistributors‐ only34%havewhollyownedsubsidiaries
• Around40%ofthecompaniesarepresentonproject‐basisofwhichamajorityofcompaniesgetprojectsthroughagentsandofthese,83%providecomputerandrelatedservices
• 82%ofIndiancompaniesinThailandalsohavepresenceinotherASEANcountries– amajorityinSingaporeandMalaysia
• SomeofthepotentialareasofcooperationincludetourismandThaispaservicesandamajorityfeltthatCECAwillbebeneficial 0.0 50.0 100.0
Localprocurementiseasy
Largernumberofpartnercompanies
Anarrayofinvestmentincentive…
Taxincentives
Alltypesofproceduresareprompt
Anabundanceofstaffduetolowcosts
Abundanceofland/lowland…
UseofEnglishlanguage
Highqualitystaff
Goodinfrastructure
Marketgrowthpotential
Stablepoliticalandsocialconditions
Factors determining Investment Decision – Indian companies in Thailand
Factordetermininginvestmentdecision
Percentageofrespondentcitingitasveryimportantandimportant
Preliminary Survey Finding – Thai Companies
ComparedtoIndiancompaniesinThailand,thereareveryfewThaicompaniesinIndia,somecompaniesinconstruction
MostoftheThaicompaniesinIndiaarepresentaswholly‐ownedsubsidiaries
Likemostotherforeigncompanies,Thaicompaniesalsopointedoutthatmarketpotentialandavailabilityofhighskilledpersonnelareimportantfactorsdetermininginvestmentdecision
MostThaicompaniesfeelthataCECAincludingserviceswillbebeneficialforThaicompanies
StatusandBarrier Howintegratedarethetwomarkets? Whatarethebarrierstointegration?
Scope for Enhancing Trade in Services and Market Integration
Choice of Services and their Role in Connectivity and Trade AgreementSector Type of Connectivity Role in Bilateral AgreementBanking Physical or infrastructural Crucial sector for any CECA negotiationsTelecommunication Physical or infrastructural Crucial sector for CECA negotiationsTransport and Logistics Physical or infrastructural Crucial sector for regional integrationProfessional Services People‐to‐people Sector of export interest to IndiaInformation Technology Physical or infrastructural
and people‐to‐peopleSector of export interest to India
Tourism People‐to‐people Sector of export interest to ThailandOther Services – spa andchef services
People‐to‐people Sector of export interest to Thailand and isincluded in all Thailand trade agreements
Source: Compiled by authors from the survey and secondary research
Institutionalconnectivityisanoverarchingmechanismthatcutsacrossallsectors
Status of Integration in Services – India and Thailand
Threeformsofintegration‐ Institutionalconnectivity,PhysicalconnectivityandPeople‐to‐peopleconnectivity
Betterconnectivityorintegrationofservicessectormayhelpenhancingtradeandinvestmentbetweensthetwomarket
Basedonthis,certainservicesarechosen– thesearealsoservicescrucialforIndia‐Thailandtradeagreement
Institutional Connectivity Status
o ComplementaryPolicy:India’sLookEastandThailand’sLookWesto Bothareactivelyengagedintradeagreements– withinASEANandwitheachothero ConcludedEarlyHarvestSchemecovering82productcategoriesandnegotiatingservicesunderASEANo Negotiationsareon‐goingunderIndia‐ThailandCECA‐ severalissuesinCECAnegotiationswhichalso
adverselyimpactmarketintegration
Barrierso Limitedknowledgeabouteachother’smarkets,requirementsandregulationso Weakregulatorystructureincertainsectors– evolvingregulationsmakingitdifficulttotake
commitmentso FDIlimitationso Foreignersaregrantedcase‐by‐caseapprovalandhighincidenceofcorruptiono Non‐transparentprojectbiddingprocesso Lowinvolvementofstakeholdersandindustryinpolicymakingo InThailand,foreignnationalsarenotallowedrepresentationoncompany’sboardortop‐level‐
management– unlikeSingapore,Thailanddoesnotfollownomineestructureforshareholdingo BoardofInvestmentRouteinThailandhashighminimumcapitalrequiremento StatespecificissuesinIndia– servicesquasifederalregulations
Physical Connectivity – (a) Transport and Logistics Sector
ThailandisIndia’sentrypointinASEANthroughlandconnectivity– (a)strategicreasons(b)lowerlogisticscoststoincreasecompetitiveness
Bothcountriesneedtoexploitseverallandandsearoutesthatcanbebeneficial• Myanmarhasakeyroleinphysicalconnectivity
India‐Myanmar‐ThailandTrilateralHighwaylinkingMoreh (inManipur,India)withMaeSot(inTak,Thailand)throughBagan (inMandalay,Myanmar)
Mekong‐IndiaEconomicCorridorChennai(India)withBangkok(Thailand)throughtheDawai (Myanmar)port
Scopefordevelopingdomestictransportinfrastructureandcollaboratingwitheachother• ConnectNorth‐EastofIndiawiththerest‐ Kaladan MultimodalTransitTransport
project• DedicatedFreightCorridorontheGoldenQuadrilateral• DevelopmentofChennai‐Bangalore‐MumbaiIndustrialCorridorandDelhi‐
MumbaiIndustrialCorridor
Selected Infrastructure Projects for Transport Connectivity
Chicken’s Neck
Source: Extracted from Kimura et. al. (2011), Figure 5, page 52, with inputs from survey conducted by authors
Physical Connectivity – (b) Telecommunications
Domesticmarketsareverydifferent– whileIndiahascompetitioncomparativelyThailandhasmonopolisticsituation
Thailandregulatoryregimeisevolving– independentregulator? Thereisscopeforcollaborationtobringdownbothdomesticand
internationalcallrates Internetpenetrationislowinbothcountries,Internetchargesarehighin
Thailandlandingrightsarewiththegovernment Companieshavelimitedknowledgeandpresenceineachothersmarket Scopeforfosteringintegrationthroughtradeagreement– addsecurityand
predictabilitytoinvestment ScopeforIndiancompaniesinThailand‐ largelyonewaytradeflow
LandconnectivitythroughNorthEastIndia Indiacaninvestindevelopingunder‐seacablethroughMyanmarordirectlyfromAndamanandNicobarIslands
UndertakeR&Dinvestmentsandsoftwaredevelopment IndianserviceproviderscanestablishpresenceinThailandandinvestinsettinguptelecommunicationinfrastructure
Physical Connectivity – (d) Information Technology IndiaisoneofthelargestexporterofITserviceswhileThailandisoneofthelargestmarketsin
SoutheastAsianregion India’sFDIregimeisopenwhileThailandhasarestrictivemarket PostIndia‐SingaporeCECA,mostIndiancompaniesoperateinThailandthroughSingaporeon
project‐by‐projectbasis ShortageoftechnicalskillsinThailandandscopeforIndiancompanies/serviceprovidersto
operatedirectlyinthemarket CanprovideITservicestosectorssuchaslogisticsandsupplychain,financialsectorandcontent
fortelecommunicationssector Scopeforinter‐governmentalagreementinareaslikee‐governance
Withgrowingcommercialconnectivitythereisaneedforgreaterfinancialconnectivity Atpresentthelevelofbankingintegrationislow– therearerestrictionsonforeignbankbranches
andsubsidiariesinThailand Indianbanksarekeentoestablishpresencebuttherearemarketaccessrestrictions– licenses RBIpreferBankingthroughreciprocityintradeagreements Limitedknowledgeabouteachothersregulatoryregime
Physical Connectivity – (c) Banking
Barriers to Physical Connectivity
Bottlenecksintransportnetworko Forlandlinks,thereisfirstneedtodevelopbetterroadsinIndialinkingNorth‐Easttotherestofthecountryo Evenifsea‐linksarebuilt,thereisneedtostreamlinecustomproceduresinIndia– shipmentsareoftennot
deliveredontimetodestinationo Inter‐statelinksarepoorinIndiaandthereisnoguaranteeofcargoclearanceo InThailand,foreignserviceproviderscannotprovideintegratedlogisticsservices– fragmentedsupplychain
Telecommunicationinfrastructureisnotwelldeveloped,landline,mobile,internetandbroadband
Inadequatefinancialinfrastructure BankingsectorismostrestrictiveinThailand– foreignownershipallowedupto49%andrequireprior
approvalfromBankofThailand Bankingregulationschangerandomly– increasedminimumcapitalrequirementfrom5to12millionBaht AnIndianbankpointedoutthatittook6yearstogetalicenseandthereareseverebranchrestrictions–
ATMsarealsotreatedasbranchinThailand InIndia,RBIimposesalimitofthenumberofoverseasbranchanIndianbankcanhaveandtherefore,most
IndianbanksarenotkeentoopenbranchesinThailandwhencomparewithcountrieswithhigherReturnonInvestment
ThaigovernmentusepriceschemestoprohibitprivateplayersfromenteringandsettinguptheirowninfrastructureintheITsector
People‐to‐People Connectivity – (a) Tourism Service
SignificantbilateraltradebetweenIndiaandThailand– largelyonewayflowfromIndiatoThailand,oneofthelargestforeignexchangeearnersinThailand
Categoriesoftouristincludeleisure,medical,pilgrimsandMICErelated‐ majorityoftouristsfromIndiatoThailandvisitonleisuretourismwhilefromThailandtoIndiaitisonpilgrimage
Complementaritytothetourismindustryisthehospitalityindustry– scopeforIndianhotelierstoopenchainsinThailandandforThailandtoinvestinbudgethotelsinIndia– havesupportedgrowthofairtransportfacilities
Scopeforjointtourismpromotionforattractingthirdcountrytouriststhroughdigitalmarketingandundertakingjointprogrammesformedicaltourism–developmentofservicesvaluechain
Year Number(inMillions) PercentshareinTotalForeignTouristsArrivedinThailand
2008 0.54 3.692009 0.61 4.232010 0.79 5.442011 0.55 3.80
Source: Information provided by the Tourism Authority of Thailand during the survey
Indian Tourist Arrivals in Thailand (2008‐2011)
People‐to‐People Connectivity – (b) Specialty Services: Spa and Ayurveda Specializedskills‐ SpaservicesareofkeyimportancetoThailand– coveredinalltrade
agreements SpaandAyurvedacantogetherbeapartofglobalvaluechaininmedicaltourism‐
complementaryservicesandIndiaandThailandcanhavejointpackagesforthirdcountrynationals
ThereisademandforThaispaworkersinIndiahowever,theknowledgeislowandmisleadingperceptionsabouttheservice
ThereisscopeforanMRAbetweenIndiaSpaandWellnessAssociationandThaiSpaAssociationforeasiermovementofpeopleandskillrecognition
People‐to‐People Connectivity – (c) Professional Services IndiahaslargeeducatedEnglish‐speakingworkforce‐ Mode1and4areofkeyimportanceto
Indiaintradeagreements(WTOandbilateral) Thailandhaslimitedinterestinthesector Foranytradetohappen,thereisaneedformutualrecognitionofqualificationsbetween
professionalassociations Thesurveyrevealedthatthereisreluctanceonbothsidestocollaborateinthesector– sensitive
forbothcountries
Barriers to People‐to‐People Connectivity
Mode4issensitiveintradenegotiations:BothIndiaandThailandaredemandeurofMode4inWTOandFTAs– However,whileIndiademandsmovementofhighskilledprofessionals,Thailanddemandsspecializedskills
Anumberofservicesareclosedforforeignnationals– legal,accountancy,etc. Conditionsonforeignserviceproviders:anumberofprofessionsarereservedforThai
nationalswhileinIndiathereareregistrationrequirements Mutualrecognitionisanissueincertainprofessionsandservices Problemsrelatedtovisaandworkpermit:Indiaimposesminimumsalaryrequirementwhile
Thailandhasrestrictionsoncitizenship Thailandhasaneconomicneedstestandcompulsorylocalemploymentcondition(1:4ratio)‐
insomesectorslikebanking,difficulttomeetlocalhiringconditions Languageisamajorbarrier:knowledgeofEnglishlanguageislowinThailand QualityofIndianworkforceisdeterioratingandworkattitudeisnotconsideredgoodbyThai
employers Indiadoesnotgivevisaonarrival‐ businessvisitors Lackofsocialsecurityarrangementleadingtoamuchlowertake‐homeincomeforexpatriates
ApproachintheWTO BilateralAgreements– howfardotheygo?
Analysis of Trade Agreements
WTO Offer of India and Thailand Bothhavemadeanofferbelowtheautonomousregime Indiaofferedtomakecommitmentin11sectors,Thailandin10 BothIndiaandThailandimposemarketaccessandnationaltreatmentrestrictionsinModes3
and4 WhileThailandrestrictsforeigninvestmentsto49%inallsectors,Indiaimposednational
treatmentrestriction– preferentialaccesswithtechnologytransfer InMode4,differencesindefinitionofservicesuppliers(managersandspecialists) India’sofferinMode4betterthanThailand(broaderdefinition,longerdurationofstay) BothIndiaandThailandaredemandeurs inModes1and4– however,Indiademandshigh‐
skilledpeoplewhileThailand’sskillrequirementsareveryspecificandspecialized Insector‐specificoffer,Thailandofferedmarketaccessinonlycertainsub‐sectors,limitingthe
abilitytoprovideend‐to‐endservices SectorssensitivetoThailand:integratedengineeringservices,medicalanddentalservices,
servicesprovidedbymidwives,nurses,physiotherapistsandpara‐medicalpersonnel,R&Dservicesinsocialsciencesandhumanities,servicesrelatedtomanagementconsultingservices,touristguideservices,amongothers
SectorssensitivetoIndia:education,retail,postalservices,railways Overall,Thailand’sRevisedOfferismorerestrictivethanIndia’s
Commitments in FTAs BothIndiaandThailandhavecomprehensiveagreements– IndiawithSingapore,
Japan,MalaysiaandKoreaandThailandwithAustraliaandJapan IndiafollowsafixedpatternacrossallFTAswhileThailandcustomizeitsagreements
totherequirementsofatradingpartner InMode3Thailandhasgonebeyondautonomous– increasedinvestmentlimitsand
madecommitmentsinsectorsotherwiserestricted‐ Thailandundertakesforward‐lookingcommitments
Indiadoesnotundertakeforwardlookingcommitmentsbuttrytobindtheexistingautonomousregime– sinceIndiahasbeenliberalisingthedomesticmarket,theextentofcommitmentshaveimprovedovertheWTORevisedOffer
Mode4,Indiacommittedunderallfourcategoriesofservicesuppliers,ThailanddidnotcoverIPbutgivespreferentialtreatment‐ ProvisionofAPECAustralianBusinessTravelcardunderitsagreementwithAustralia
ThailandhastheIndiatriestosecureliberalisationcommitmentsinModes1and4 Indiaisalsoaproponentofdevelopingdisciplinesondomesticregulations Bothhavechaptersoncooperationandrecognisetheimportanceofmutual
recognitionagreement
Comparison of Design and Coverage of Bilateral Agreements
Parameters India–Korea CEPA India–Japan CEPA Thailand–Japan EPA Thailand–Australia FTASectors covered India has taken commitments
in all 11 broad services sectors covered under the W/120
India has taken commitments in all 11 broad services sectors covered under the W/120
Thailand has taken commitments in 10 broad sectors. The excluded sector is health and social services.
Thailand has undertaken commitments in 8 broad sectors identified in W/120.The three excluded sectors are environmental, financial and health and social services.
Scheduling GATS‐style hybrid approach ‐positive listing of sectors and negative listing of barriers
GATS‐style hybrid GATS‐style hybrid Negative list
Sectoral carve‐outs
Air transport services Air transport services and cabotage in maritime transport services
Air transport services and cabotage in maritime transport services
‐
Coverage Dual coverage for investments (under investment chapter and under Mode 3 in trade in services chapter) and movement of people
Dual coverage for investments and movement of people
Dual coverage for investments and movement of people
Single schedule
Has separate chapters on
Telecommunication, movement of natural persons and investments
Movement of natural persons and investments
Movement of natural persons and investments
Movement of natural persons, investments and e‐commerce
Types of service suppliers covered
BV, CSS, ICT, IP BV, CSS, ICT, IP BV, CSS, ICT BV, CSS, ICT
Layout of the Presentation
RationaleandObjectiveoftheStudyMethodology ApproachtheTarget Trends Analysis Findings
ConclusionandTakeaways
Layout of the Presentation
RationaleandObjectiveoftheStudyMethodology ApproachtheTarget Trends Analysis Findings
ConclusionandTakeaways
The Way Forward – Enhancing Trade in Services through Negotiations
PrimereasonforThailandtoenterintoanagreementwithIndiaisproliferationofFTAsinASEANandIndia’sgrowingintegrationwithASEANmemberstates
Bilateraltradeinservicesatpresentislowhowever,thereisscopeforenhancingtradeandinvestment
Anumberofbarriersarerelatedtomarketaccessthatcanaddressedthroughnegotiations
ThailandisanetexporterofservicestoIndia– primarilyduetolargeexportoftravelservices– soitshouldnotworryaboutservicesagreement
Regulatorybarrierswithstrongdomesticreformsandclearimplementationstrategy
Knowledgesharingisimportantandgreatercooperationisrequiredinthisregard
Scopeforcollaborationinspecificsectors
Key Takeaways BothIndiaandThailandhaverestrictiveFDI
regimeandevolvingregulations– affectstransparency
Integrationinphysicalinfrastructureandeasingmovementofpeoplewillhelpinenhancingtradeinservices
Businessfacilitatinginstrumentssuchasbankshouldbeencouraged
Soundinstitutionalframeworkandgreatercooperationandinteractions– governmenttogovernment,industryassociationsandbusiness
Reciprocity– visaonarrivalandaccommodationofeachothersinterest
Thailandcustomizesitsagreementaspertradingpartnersrequestandoffers– Indiashouldutilizetheflexibilityoneachothersinterest
Focusofcommitmentsratherthanonlycooperation
India‐ThailandCECAnegotiationsare
slow– stickyissues(a)commitmentsonmovementofpeople(b)slowreformsand
domesticbarriers
ThailandisdemandingmarketsaccessforThaispaworkersandremovalofUS$25000salarycondition– IndianMinistryofLabour isreluctanttocommit
Indiademandbettercommitmentsinbankingsector– ThaibankingsectorisfairlyrestrictedandThailandisreluctanttocommitinthesector
TherecentslowdowninIndianmarkethasalso
sloweddownthespeedofnegotiations
ThailandhasgainedfromEarlyharvest‐worried
abouttheimplicationofbroadeningtheagreement
Thank YouFordetailscontact:ArpitaMukherjeeProfessor,[email protected],ResearchAssociate,[email protected]
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