Services provisions in regional trade agreements: Stumbling blocks or building blocks for multilateral liberalization?

A remarkable feature of the recent wave of regional trade agreements (RTAs) is the inclusion of a trade in services component in many agreements. At the end of 2006, the WTO counted fifty-four such service accords, of which only five predate the conclusion of the Uruguay Round.2 The rising interest in service trade agreements reflects a number of developments. First, as tariffs have come down, policymakers have turned their attention to other barriers restricting international commerce. Second, the growth of world trade in goods and the emergence of international production networks have highlighted the importance of an efficient services infrastructure – whether in telecommunications, finance, logistics or legal advice. Market openings in services offer the prospect of performance improvements in services, and allow goods producers to draw on multinational service networks in organizing their business.