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The TISA Initiative
The plurilateral negotiations on a Trade in Services Agreement (TISA) have attracted much attention in trade policy circles. Policy and economic implications are intensely debated given the number and economic importance of participants. This paper aims to provide insights into the market access issues arising in such negotiations. Should TISA negotiations result in participants exchanging the best commitments they have so far undertaken in their preferential trade agreements (PTAs) – a reasonable starting point — TISA market access commitments would go well beyond GATS commitments and services offers tabled in the Doha Round. While this would be in itself a significant outcome (especially in terms of predictability and stability) we also highlight however that the real economic benefits would be reduced by the fact that a number of participants have already exchanged significant concessions amongst themselves through bilateral PTAs. Further and more importantly exchanging 'best PTA' commitments would not meet the participants' most important export interests. These have often remained unaddressed in many of the previous bilateral negotiations or involve countries not currently participating in TISA. Addressing better these export interests would require going beyond an exchange of 'best PTA' commitments among TISA participants — with the more difficult policy and negotiating decisions that this implies — and/or seeking to expand the group of participants. We also discuss the different forms that such a plurilateral agreement may take vis-à-vis the WTO framework.
How to Design Trade Agreements in Services
This paper deals with claims recently raised in various circles that structural faults in the General Agreement on Trade in Services (GATS) have prevented WTO Members from advancing services liberalization under the Agreement. The GATS is generally associated in this context with a bottom-up (positive-list) scheduling approach where the sectors on which trade commitments are undertaken are selected individually. This is claimed to be less efficient in terms of liberalization effects than alternative approaches under which everything is considered to be fully committed unless specifically excluded (top-down or negative listing). However a closer look at services negotiations conducted in various settings including the Doha-Round process WTO accession cases and different types of regional trade agreements suggests that such structural issues have limited if any impact on the results achieved. What ultimately matters are not negotiating or scheduling techniques but the political impetus that the governments concerned are ready to generate.
Services Rules in Regional Trade Agreements
The study tries first to assess the extent of similarities and divergences among services rules in regional trade agreements as compared to the GATS. To do so it uses a typology identifying variations in 48 key provisions structured under seven themes commonly found in RTAs and using the GATS as a benchmark. The analysis identifies two main “families” of agreements GATSinspired and NAFTA-inspired) and a residual category. The paper briefly explores the historical development that led to these families as well as their geographical spread both on an agreement by agreement basis and a country by country basis. The paper then analyses by theme the variations found in the RTAs among services rules including their novelty as compared to the GATS. Given the lack of available information on the implementation of the agreements the paper tries to assess whenever possible the magnitude of the discrepancies and their practical impacts. While subject to some qualifications the results of the study are relatively straight forward: there is no "spaghetti bowl" in services rules but just two "families" and one residual category. The details reveal that the degree of divergence between those two families does not overall seem insurmountable. This assessment concords with other studies (e.g. Marchetti Roy) that have equated them in terms of national treatment and market access and have compared directly commitments undertaken under the three families of agreements. One may even note a certain tendency to a convergence towards the GATS model (e.g. the addition of market access clause in the second generation of NAFTA-like agreements or the use of GATS-type architecture by EU for agreements else than pre-adhesion ones). In terms of "novelty" the results prove somewhat disappointing except in certain areas like mode 4 and transparency. Other issues in which in view of the intensity of WTO DDA debates one would have expected a lot of bilateral creativity such as domestic regulation safeguards and recognition provisions show themselves to be surprisingly embryonic. Finally anecdotal evidence gathered for instance during the drafting by the WTO Secretariat of Trade Policies Reviews and factual presentations on RTAs suggest that in numerous instances provisions relating to future negotiations or even regular meetings are not implemented thereby casting doubt on the effective impact of RTA provisions (including diverging ones) on trade realities.
Is There Reciprocity in Preferential Trade Agreements on Services?
Are market access commitments on services in Preferential Trade Agreements (PTAs) reciprocal or simply unilateral? If reciprocal do concessions granted in services depend on concessions received from the trading partner in other services or in non-services areas as well? In this paper we investigate the presence of reciprocity in bilateral services agreements by sub-sector mode of supply and type of agreement (North-North South-North South-South). To do so we use a database of concessions given and received by 36 WTO Members in 40 services PTAs. Results reveal the presence of reciprocity at the product (sub-sector) level and across economic sectors (i.e. preferences in services trade in exchange for preferences received in goods trade). Reciprocity is stronger in agreements between developed countries. The findings provide insights into motivations for services PTAs but also the multilateral negotiations. Indeed the negotiation of services PTAs provides an incentive to withhold services offers in the Doha Round in order to extract more - reciprocal- concessions at a bilateral level. The existence of reciprocity on a sectoral basis may also hold lessons on optimal ways to improve the multilateral negotiating process.
China - Certain Measures Affecting Electronic Payment Services
On 15 September 2010 the United States requested consultations with China with respect to “certain restrictions and requirements maintained by China pertaining to electronic payment services for payment card transactions and the suppliers of those services”.
SMEs in Services Trade
Issues related to small- and medium-sized enterprises (SMEs) supplying services have been raised at earlier stages of the Doha Round in various negotiating contexts and more recently at meetings of the Council for Trade in Services. It is difficult however to find a common denominator as to whether SME-related concerns might merit attention from a trade policy perspective under the General Agreement on Trade in Services (GATS). Without proposing any priorities this paper seeks to provide an overview of issues that Members might want to address in the WTO from promoting compliance with transparency disciplines under existing provisions to advancing the liberalization and rule-making mandates of the GATS with an SME focus.
Services Commitments in Preferential Trade Agreements
Preferential trade agreements (PTAs) on services have proliferated since 2000. This working paper briefly presents the expansion of the dataset initially developed in Marchetti and Roy (2008). The data permits to assess the extent to which market access commitments undertaken by WTO Members in PTAs go beyond GATS commitments and offers made in the context of the Doha Development Agenda. The dataset which covers PTA commitments of 53 WTO Members (counting EU Members States as one) is available at: http://www.wto.org/english/tratop_e/serv_e/dataset_e/dataset_e.htm
Expect the Unexpected? LDC GATS Commitments as Internationally Credible Policy Indicators? The Example of Mali
There is a stark contrast between the ambitious investment promotion efforts of many least developed countries (LDCs) and their often minimal commitments under the General Agreement on Trade in Service (GATS). At a time of urgent need to address domestic infrastructure and investment gaps this situation cannot be a positive signal for investors (either domestic or foreign) and may be a missed opportunity to address services aspects of the Millennium Development Goals (MDGs). LDCs often lack internationally credible mechanisms for making commitments which contributes to their evident difficulty in attracting the more employment-generating types of investment that could bring greater opportunities for poverty alleviation. Considering that most LDCs under domestic laws have already opened a wide range of services sectors to foreign direct investment (FDI) there may be an opportunity to enhance the international consistency and credibility of LDC investment promotion efforts by making GATS commitments while preserving substantial "policy space" with regard to the actual status quo. While reforms to domestic regulations are undoubtedly of greater importance to attracting FDI GATS commitments including partial commitments can be used to publicize LDC investment priorities in services (such as attracting new businesses encouraging joint ventures and technology transfer etc.) and make them legally binding internationally. Offers to make new GATS commitments can further be used as "bargaining chips" in the current Doha Development Agenda (DDA) negotiations. Mali has been selected as a case study due to the fact that trade and investment policies are clearly and consistently documented.
Fog in GATS Commitments
The creation of the General Agreement on Trade in Services (GATS) in the Uruguay Round and its entry into force in 1995 marked a new stage in the history of the multilateral system. It was motivated essentially by the rapid expansion of international services trade within an increasingly open environment in many countries. Given the peculiarities of services trade including the intangible nature of the products concerned and the need for direct contact between supplier and user in many cases the Agreement contains a variety of conceptual innovations including its extension to modes of supply beyond conventional cross-border trade (consumption abroad commercial presence and presence of natural persons) and its coverage and legitimization of various types of non-tariff restrictions. In turn the new concepts needed time to be absorbed by the ministries and agencies involved in services trade. Further the positive-list or bottom-up approach to scheduling trade commitments under the GATS meant that great flexibility was given to Members in selecting the sectors concerned and specifying the levels of access provided under individual modes. Thus not surprisingly the schedules that emerged from the Uruguay Round which still account for the majority of current commitments contain a variety of unclear or superfluous entries that may cause interpretation problems. Their solution could contribute significantly to the clarity and comparability of access obligations across sectors and WTO Members. The scheduling conventions agreed for the Doha Round thus provide specifically for the possibility of technical refinements that leave the substance of commitments unchanged. However not only was this possibility used more sparingly to date than might have been expected but additional flaws would be introduced if some current offers were to enter into effect. The following discussion with a focus on a particular group of entries (market access via commercial presence) tries to explain the scope for such refinements and develop a clearer picture of the areas where further action might be needed.
Endowments, Power, and Democracy
In spite of their growing importance in international trade as well as in bilateral and multilateral trade negotiations services have only attracted limited attention from researchers interested in determinants of trade policies and trade cooperation. This paper seeks to account for countries' varying levels of market access commitments under the multilateral General Agreement on Trade in Services (GATS). I develop an argument suggesting how levels of democracy and factor endowments are associated with more commitments. The empirical analysis supports these propositions and also suggests that relative size as well as regulatory capacity are positively linked to GATS commitments.
China - Measures Affecting Trading Rights and Distribution Services for Certain Publications and Audiovisual Entertainment Products
On 10 April 2007 the United States requested consultations with China concerning: (1) certain measures that restrict trading rights with respect to imported films for theatrical release audiovisual home entertainment products (e.g. video cassettes and DVDs) sound recordings and publications (e.g. books magazines newspapers and electronic publications); and (2) certain measures that restrict market access for or discriminate against foreign suppliers of distribution services for publications and foreign suppliers of audiovisual services (including distribution services) for audiovisual home entertainment products.
Trade in Healthcare and Health Insurance Services
The General Agreement on Trade in Services (GATS) is broader in policy coverage than conventional trade agreements for goods and at the same time offers governments more flexibility in various dimensions to tailor their obligations to sector- or country-specific needs. An overview of existing commitments on healthcare and health insurance services shows that WTO Members have made abundant use of these possibilities. While most participants elected not to undertake bindings on healthcare services at the end of the Uruguay Round nor to make offers in the ongoing negotiations insurance services have been among the most frequently committed sectors. If there is a common denominator regardless of the Members concerned (except for recently acceded countries) it is the existence of a lot of 'water' between existing commitments and more open conditions of actual access in many sectors. This may also explain in part why there have been very few trade disputes under the GATS to date - far fewer than under the GATT in merchandise trade. Also governments appear to be generally hesitant in politically and socially sensitive areas to take action in the WTO. There are indications however that the same 'players' have acted differently in other policy contexts. For example it appears that under recent preferential trade agreements (PTAs) the European Communities has been even more cautious in committing on hospital services and protecting scope for (discriminatory) subsidies than under the GATS. Yet this is not necessarily true for the obligations assumed by many countries including individual EC Member States under bilateral investment treaties (BITs). These treaties overlap with the GATS as far as commercial presence is concerned and may be used by aggrieved investors to challenge policy restrictions in host countries. However though frequently invoked BITs do not meet the same standards in terms of transparency open (consensual) rulemaking and legal certainty as commitments under the GATS.
China - Measures Affecting Trading Rights and Distribution Services for Certain Publications and Audiovisual Entertainment Products
On 10 April 2007 the United States requested consultations with China concerning: (1) certain measures that restrict trading rights with respect to imported films for theatrical release audiovisual home entertainment products (e.g. video cassettes and DVDs) sound recordings and publications (e.g. books magazines newspapers and electronic publications); and (2) certain measures that restrict market access for or discriminate against foreign suppliers of distribution services for publications and foreign suppliers of audiovisual services (including distribution services) for audiovisual home entertainment products.
Services Liberalization from a WTO/GATS Perspective: In Search of Volunteers
There has been virtually no liberalization under the General Agreement on Trade in Services (GATS) to date. Most existing commitments are confined to guaranteeing the levels of access that existed in the mid-1990s when the Agreement entered into force in a limited number of sectors. The only significant exceptions are the accession schedules of recent WTO Members and the negotiating results in two sectors (financial services and in particular basic telecommunications) that were achieved after the Uruguay Round. The offers tabled so far in the ongoing Round would not add a lot of substance either. Apparently negotiators are 'caught between a rock and a hard place'. For one thing the traditional mercantilist paradigm relying on reciprocal exchanges of concessions seems to be provide less momentum than in the goods area. For another there are additional - technical economic and political - frictions that tend to render services negotiations more complicated timeconsuming and resource-intensive. The novelty of the Agreement adds an additional element of legal uncertainty from a negotiator's perspective. This paper discusses various options that might help to overcome the ensuing reticence to engage. Few appear within reach at present however. The bare minimum that would need to be achieved is to revive work on scheduling and classification issues with a view to putting both existing commitments and new offers on a safer footing and to improve compliance with long-existing information/notification obligations.
Domestic regulation: What are the costs and benefits for international trade in services?
Services have been considered non-tradable and therefore outside the scope of trade policy-making until quite recently. A logical consequence is that explicit policy barriers to cross-border trade in services are rare. What segments markets for tradable services is therefore largely in the realm of domestic regulation. Both the General Agreement on Trade in Services (GATS) and a number of regional trade agreements (RTAs) aim at developing disciplines on domestic regulation. GATS Article VI states that disciplines on qualification requirements and procedures technical standards and licensing requirements shall be established to ensure that regulation is not more burdensome than necessary to ensure the quality of the service. Such disciplines are however yet to be established but a reference paper on pro-competitive domestic regulation in telecommunications has been included in a number of World Trade Organization (WTO) members’ GATS schedules of commitments and some RTAs have quite detailed disciplines on domestic regulation in this sector.
Operating integrated logistics services in a fragmented regulatory environment: What is the cost?
Estimated at US$36 billion and employing over four million people the Indian health care sector is one of the largest service sectors in the economy today. With a compound annual growth rate (CAGR) of 15 per cent the Indian health care sector is expected to reach US$280 billion by 2020. A 2003 report titled India’s New Opportunity: 2020 prepared jointly by the All India Management Association Boston Consulting Group and the Confederation of Indian Industries predicts that over 40 million new jobs and US$200 billion increased revenues are expected to be generated by the Indian services sector by 2020 and the health care sector will play an important role in generating these jobs and revenues (AIMA/BCG 2003). Hence this sector is predicted to grow rapidly and is seen to have considerable potential due to the growing demand for health care services in India. The reasons are many including rising incomes a growing propensity to spend on health care an emergence of lifestyle-related diseases and demographics.
Domestic regulation of retail food distribution services in Israel: The missing link between food prices and social protest
This chapter provides a case study tracing the impact of domestic regulation on market structure in the retail distribution services sector and its ultimate effects on consumer food prices. Taking Israel a small and relatively liberalized Organisation for Economic Co-operation and Development (OECD) economy as an example our research investigates whether market concentration and the absence of international competition can be attributed to domestic regulation. We place this discussion in the context of recent consumer-led social protest against the rising cost of food in Israel.
Telecommunications reform in China: Fostering competition through state intervention
As in many developing countries the telecommunications services sector in China has for a long time been monopolized by the state through the Ministry of Post and Telecommunication (MPT). Established in 1949 the MPT is not only the regulator of telecommunications services but also the sole owner and operator. Not surprisingly such monopoly has resulted in the slow growth of the sector. However such slow growth did not cause major problems in the first thirty years following the founding of the People’s Republic of China because there was little mobility among the population thus little need for long-distance communication. During this period the telephone was an exclusive luxury available mostly to the government and the military.
Regulatory impact analysis: Addressing the trade and regulatory nexus
The potential for productivity growth to generate higher incomes makes it a natural and important consideration for decision-makers. Productivity is the only driver of income growth that is unlimited as opposed to resource exploitation or increases in population and labour force participation each of which faces natural limits. The continuing need to stimulate productivity growth rightly remains at the forefront of government policy and is a key priority of the Australian government.
Domestic regulations and India’s trade in health services: A study of hospital and telemedicine services
Estimated at US$36 billion and employing over four million people the Indian health care sector is one of the largest service sectors in the economy today. With a compound annual growth rate (CAGR) of 15 per cent the Indian health care sector is expected to reach US$280 billion by 2020. A 2003 report titled India’s New Opportunity: 2020 prepared jointly by the All India Management Association Boston Consulting Group and the Confederation of Indian Industries predicts that over 40 million new jobs and US$200 billion increased revenues are expected to be generated by the Indian services sector by 2020 and the health care sector will play an important role in generating these jobs and revenues (AIMA/BCG 2003). Hence this sector is predicted to grow rapidly and is seen to have considerable potential due to the growing demand for health care services in India. The reasons are many including rising incomes a growing propensity to spend on health care an emergence of lifestyle-related diseases and demographics.
Reasonableness, impartiality and objectivity
Similar to the General Agreement on Tariffs and Trade (GATT) the General Agreement on Trade in Services (GATS) imposes requirements of reasonableness and impartiality on World Trade Organization (WTO) members with respect to their administration of certain measures. This general obligation of procedural fairness offers a potentially powerful mechanism for ensuring equitable treatment for traded services and service suppliers beyond the substantive disciplines of WTO law such as those related to discrimination. Yet the provision has been subject to relatively little extended commentary or jurisprudence perhaps because of an underlying concern about the sovereignty implications of WTO dispute settlement organs assessing the reasonableness of WTO members’ administration.
Regulation of postal services in a changing market environment: Lessons from Australia and elsewhere
The digital revolution and the exponential growth of the Internet have led to radical changes in the ways in which countries conduct their commerce communicate and store information. Coupled with the digital revolution the last several decades have also seen a fundamental rethink of the role of the state in the economy. Broadly the past reliance in many countries on state control and regulation has given way to a greater emphasis on competition trade openness and market forces.
Wto Domestic Regulation and Services Trade
Domestic regulation of services sectors has a significant impact on services trade liberalization which is why General Agreement on Trade in Services (GATS) disciplines are negotiated in the WTO. With the help of analyses and case studies from academics regulators and trade experts this book explores the scope and limits of WTO legal principles to promote domestic regulatory reform. Case studies discuss country specific challenges and experiences of regulating important service sectors such as finance telecommunications distribution legal education health postal and logistics services as well as the role of regulatory impact assessments. The findings will interest trade officials policy makers regulators think tanks and businesses concerned with the implications of domestic regulation on access to services markets and with the opportunities for formulating trade disciplines in this area. It is also a useful resource for academics and students researching regulatory approaches and practices in services sectors.
Introduction to Part III
In Part III of this book a number of case studies on domestic regulation in services sectors are presented. These case studies concern the following sectors: legal services telecommunications information and communications technology mobile banking financial services higher education logistical services postal services and retail food distribution.
Mutual recognition of services regulation at the WTO
Mutual recognition is a useful tool for international liberalization in particular contexts. However it has two types of limit and to the extent that it may exceed these limits it poses two important types of risk.
Domestic regulations in Malaysia’s higher education sector
The growth of private higher education institutions (PHEIs) in Malaysia is politically and economically motivated. Excess demand and the use of ethnic quotas in a limited number of public universities with the implementation of the New Economic Policy in 1970 had raised the potential for inter-ethnic conflicts in multi-ethnic Malaysia. The government therefore utilized private provision to supplement public supply thereby increasing access and reducing the possibility of inter-ethnic conflicts due to limited access. Over time the perennial deficit in services trade since independence in 1957 contributed to the idea of using private higher education to reduce student outflows and its negative impact on services trade and instead to increase export revenues through inflows of international students. This led to the aspiration to be a regional hub for higher education based on Malaysia’s comparative advantage in terms of costs and language via the use of English in transnational programmes offered in PHEIs with degrees awarded by parent institutions in developed countries such as Australia and the United Kingdom.
Why regulate? An overview of the rationale and purpose behind regulation
The starting point for any economist is the superiority of the market mechanism of free exchange in efficiently allocating resources and thereby maximizing social welfare. However in order for that ‘invisible hand’ to perform its winning act the market needs to display certain characteristics
Mobile money services provision in East Africa: The Ugandan experience
Services constitute a major and growing sector of Uganda’s economy in terms of its contribution to gross domestic product (GDP) exports and employment. Uganda’s Service Sector Export Strategy of 2005 has also identified information and communications technology (ICT) services as a priority. Similar to the situation in many least developed countries (LDCs) Uganda’s services sector is liberal. Specific General Agreement on Trade in Services (GATS) commitments have been undertaken on both telecommunications and financial services. There is a high degree of foreign ownership in Uganda’s financial and telecommunications sectors. In the financial sector eighteen of the twenty-five commercial banks licensed in 2012 were foreign owned. In the telecommunications subsector six of the seven operational mobile operators are foreign owned. In addition this subsector has expanded rapidly in recent years with respect to domestic and foreign-owned mobile service providers (MSPs) the number of mobile subscriptions and the emergence of non-voice services such as mobile money. Once established in Uganda foreign and local suppliers of financial or telecommunications services are subject to the same regulatory and supervisory procedures.
Information communications technology: The Mauritian experience of regulation and reform
This chapter presents the evolution of the information and communications technology (ICT) sector in Mauritius and the advances made in defining clear institutional policy legal and regulatory frameworks which have positively influenced trade in the ICT services. The case study analyses the pre-existing conditions that facilitated competition in telecommunications thus paving the way to making ICT a key pillar for the development of the Mauritian economy through its Cyber Island Strategy. The study also reviews the prominent role played by the sector ministry and the ICT regulator in fostering widespread application of modern technologies and reporting on the ensuing economic benefits for the country.
Services liberalization, negotiations and regulation: Some lessons from the GATS experience
The services economy has been undergoing a major transformation over the last three decades moving away from the old model where services were more often than not government functions provided by public utility entities towards a new paradigm of private sector-led competitive markets where services are exchanged on a commercial basis. Accordingly the role of governments has fundamentally changed in many activities from being the provider of the service into that of the supervisor or regulator in pursuit of public interests. Increasingly services markets continue to be liberalized motivated by the usual gains from competition (better quality lower prices wider choices expanding markets and more job creation).
Balancing legal certainty with regulatory flexibility
The concept of legal certainty is a central element of most legal systems in the world (Maxeiner 2008: 28). It can be associated with the rule of law but variations exist concerning its exact contours and its relative importance vis-à-vis other fundamental legal principles. In particular legal certainty is often contrasted with principles of justice or rightfulness (von Arnauld 2006: 638). Indeed a formal understanding of legal certainty which focuses on issues of stability and consistency does not guarantee a fair and just outcome. More fundamentally even though legal certainty is one of the most effective safeguards against governmental and administrative arbitrariness it offers no protection against unjust or unfair laws. How can the potential for conflict between legal certainty and justice be solved?
WTO Domestic Regulation and Services Trade
Domestic regulation of services sectors has a significant impact on services trade liberalization which is why General Agreement on Trade in Services (GATS) disciplines are negotiated in the WTO. With the help of analyses and case-studies from academics regulators and trade experts this book explores the scope and limits of WTO legal principles to promote domestic regulatory reform. Case-studies discuss country-specific challenges and experiences of regulating important service sectors such as finance telecommunications distribution legal education health postal and logistics services as well as the role of regulatory impact assessments. The findings will interest trade officials policy-makers regulators think tanks and businesses concerned with the implications of domestic regulation on access to services markets and with the opportunities for formulating trade disciplines in this area. It is also a useful resource for academics and students researching regulatory approaches and practices in services sectors.
An introduction to domestic regulation and GATS
International trade in services is governed principally by regulatory measures. Unlike trade in goods border measures in the form of tariffs and quotas are not the main barriers to trade. This peculiarity of services trade is due to the manner by which services are produced and consumed. Due to the intangible and non-storable nature of services suppliers and consumers often have to be in physical proximity to each other for the transaction to be completed. For this reason economists have traditionally considered services to be non-tradable across borders and have paid little attention to it in trade theory.
Opening services markets at the regional level under the CAFTA-DR: The cases of Costa Rica and the Dominican Republic
The cases of Costa Rica and the Dominican Republic (DR) offer interesting examples of why smaller countries choose to negotiate in a regional context and help explain why the CAFTA-DR regional agreement has led both of them to make services commitments that go significantly beyond their WTO GATS schedules.
The liberalization of postal and courier services: Ready for delivery?
Even if postal and courier services represent traditional means of communication they remain essential to a country’s economic and social development even in today’s information society where new communication technologies keep emerging. Nevertheless these services have been transformed in many aspects in order to face the challenges resulting from the IT revolution.
Services liberalization in the WTO and in PTAs
The first decade of this century has been characterized by intensive trade negotiations. Countries all over the world have resorted to a plethora of fora and mechanisms to enhance trade opportunities overseas. Negotiations at the WTO have been ongoing since November 2001 under the umbrella of the Doha Development Agenda. In parallel to that many new preferential trade agreements have entered into force.
PTAs in services: Friends or foes of the multilateral trading system?
Preferential trade agreements are proliferating around the globe. By the end of July 2007 380 PTAs had been notified to the WTO. Only 142 of these agreements were concluded between 1948 and 1994 – the period from the establishment of the GATT to the end of the Uruguay Round. The remaining agreements entered into force thereafter. To put it provocatively it could be said that just after WTO members pledged their commitment to a non-discriminatory trading system by concluding the most far-reaching of all multilateral trading rounds they went off to sign a plethora of discriminatory trading pacts.
Services trade and growth
One of the stylized facts of economic development is that the share of services in GDP and employment rises as per capita income increases. In the lowest-income countries services generate some 35 percent of GDP. This rises to over 70 percent of national income and employment in OECD countries. The expansion in the services intensity of economies is driven by a number of factors. Standard explanations revolve around both demand- and supply-side factors including income elasticities of demand for services that exceed one limited scope for labor productivity improvements in the supply of consumer (final product) services and the rise in demand for coordination and intermediation services associated with structural change (e.g. the shift out of subsistence agriculture urbanization changes in business practices) and the expansion of the extent of the market as well as incentives for firms and government bodies to spin off service activities to specialized providers (outsourcing). Advances in information and communication technologies (ICT) are increasingly permitting cross-border – disembodied – trade in labor-intensive services accelerating the growth of services activities.
Opening Markets for Trade in Services
Trade in services is an increasingly important part of global trade and as such figures prominently in multilateral regional and bilateral trade negotiations. In this volume of essays academics negotiators and experts from various international organizations explore the challenges motivations and achievements of such negotiations. The contributions highlight issues in important services sectors such as distribution energy finance telecommunications air transport and the postal and audiovisual sectors as well as areas such as cross-border trade the movement of natural persons and government procurement. Case studies look into the experiences of specific countries. The focus on sector analysis and country experiences sheds light on the state of services liberalization and the regulation of international trade in services at the beginning of the twenty-first century making this an indispensable guide to ongoing and future international negotiations on this topic.
Services liberalization in PTAs and the WTO: The experiences of India and Singapore
The services sector plays a crucial role in the economic growth and development of both India and Singapore. The two countries have liberalized unilaterally and developed global competitiveness in selected services and now they are major exporters. Consequently they not only have an aggressive interest in the multilateral liberalization of trade in services but also perceive this sector as an integral part of their preferential trade agreements.
GATS plus or minus? Services commitments in comparative contexts for Colombia and Uruguay
The increasing proliferation of bilateral regional and multilateral trade agreements has put new twists and brought new questions to the fore in the old debate on the effects of these agreements (either separately or together) on the concerned economies as well as on world trade as a whole. By July 2007 nearly 380 preferential trade agreements had been notified to the WTO and it is estimated that over 400 PTAs will be in force by 2010. Earlier the chief concern had been whether regional or bilateral agreements were building blocks or stumbling blocks toward multilateralism; this became an issue empirically for a while centering on how the two types of agreements had to exist “side by side” for better or for worse (Fisch 2001). As one Colombian negotiator put it: “The WTO is not a place of liberalization but consolidation”. The concern is now revisited in the context of a possible breakdown or slowing down of the multilateral order itself and the increasing pressure on small economies to meet the demands of the great powers in bilateral free trade agreements in defecting from both regional and multilateral trade arrangements. This chapter attends to the latter set of concerns in speaking of the GATS+-type arrangements becoming de rigueur in bilateral agreements. In doing so however it also showcases trade as an increasingly complex set of arrangements between local national regional and international dynamics.
Financial services liberalization in the WTO and PTAs
The financial services sector has been going through a dramatic process of change for the last two decades. Technological change deregulation and the opening up of financial systems to international competition amongst other factors have reshaped the financial landscape for ever. Against this background trade in financial services (understood as both cross-border financial transactions and the establishment of premises abroad) has expanded at a rapid pace prompting a deeper integration of markets worldwide.
A warmer welcome? Access for natural persons under PTAs
In comparison to the other three modes of supplying services under the GATS few market opening commitments have been undertaken by WTO members with respect to the movement of natural persons – mode 4 – as a result of the Uruguay Round and subsequent extended negotiations. This begs the question: have WTO members been more forthcoming in their PTAs?
A reader’s guide to basic GATS concepts and negotiations
The purpose of this appendix is to provide the reader with an overview of key concepts used in negotiations on trade in services. Many of these concepts find their origin in the WTO General Agreement on Trade in Services which has served as the model for the services chapters contained in many preferential trade agreements. Reference to other concepts not pertaining to the GATS but nevertheless necessary to understand other negotiating models is made whenever appropriate. The appendix also provides an overview of current services negotiations within the WTO Doha Development Agenda.
The liberalization of energy services: Are PTAs more energetic than the GATS?
Energy is an indispensable component of daily life. It gives us light allows us to cook our food and heat – or cool – our homes and transports us on road rail or water or in the air. It underpins all economic activities. A lack of reliable and affordable energy supply affects human welfare and economic development. The importance of this sector for social and economic life coupled with the specificities of energy trade have led governments to be directly involved in the provision of energy goods and services. Until the beginning of the 1990s the structure of the energy sector left limited room for private operators. The market was dominated by large vertically integrated state-owned utilities which were responsible for the whole chain from exploration and production to marketing and sale to the final consumer; trade in energy was seen essentially as trade in goods in which services were a value added element. Moreover many countries endowed with energy resources were not members of the GATT/WTO.