Services
Developing Countries in the WTO Services Negotiations
The aim of this paper is to analyse developing countries’ participation so far in the current round of services negotiations under the Doha Development Agenda. The paper analyses developing countries’ negotiating positions as evidenced by their multilateral negotiating proposals; their initial offers; and to the extent allowed by the incomplete and sketchy information available their participation in bilateral market access negotiations. A number of basic themes are raised: the essential role of services for economic development; the high costs imposed by trade protection; the benefits of liberalization; the need to make use of the WTO forum to enhance credibility and sustain domestic regulatory reform programmes; the challenges of regulatory reform and the importance of appropriate sequencing; and the benefits arising from seeking further market access overseas in those areas where developing countries have a comparative advantage.
ICT, Access to Services and Wage Inequality
This paper discusses how information and communication technology (ICT) affects the quality and reach of consumer services. These services need to be provided locally but consist of several components some of which can be digitised and transmitted over long distances. A general equilibrium model is developed and numerical simulations in a stylised two-factor two-region centre-periphery setting are presented. Trade in intermediate services improves the quality of consumer services enormously in the periphery but may reduce the quality at the centre. Trade in intermediate services also has a dramatic impact on skilled workers’ wages in the periphery both relative to unskilled workers in their own region and relative to skilled workers at the centre and leads to a more equal distribution of income both between the centre and the periphery and within the periphery.
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.
Liberalizing Financial Services Trade in Africa
This paper analyses the possible gains from regional and multilateral liberalization of financial services trade for African countries taking into account the implications of such liberalization for financial regulation and capital account liberalization. It also describes existing efforts to integrate financial markets within four African regions (WAEMU CEMAC SADC and COMESA) and discusses the existing GATS commitments of the relevant countries with respect to financial services. Although the regions differ significantly there is scope for further regional integration in all of them. Significant scope also exists for further multilateral liberalization of financial services in particular with respect to Mode 3.
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.
Covered or not Covered: That is the Question
The GATS does not offer a definition of "services" but services need to be identified and classified for the operation of the Agreement especially for the scheduling of specific commitments on market access and national treatment. There is no obligation on WTO Members to use any particular classification system in undertaking commitments. Nevertheless an informal document produced for the services negotiation during the Uruguay Round the Services Sectoral Classification List (W/120) was used and continues to be used as the principal guiding classification system not only in the WTO but also in bilateral and plurilateral services trade negotiations outside of the WTO. WTO jurisprudence has also noted the role of W/120 in the determination of sectoral coverage of GATS commitments. However services classification does not receive enough attention it deserves. This paper attempts to make contribution by providing an overview of services classification and highlighting its relevance to both trade negotiations and WTO dispute settlement. It consists of four sections. Section I reviews how a services classification system was introduced into the multilateral trading system and describes the main features of W120. Section II takes a closer look at some aspects of the classification system drawing attention to challenges in its application which arise from inter alia services with multiple end-uses overlaps between sectors and the issue of "new services". Section III considers the implications of classification on GATS commitments by examining a number of WTO dispute settlement cases. Section IV concludes. In conclusion the paper underlines the importance of services classification in assisting governments in clearly and accurately undertaking commitments. It also notes that WTO Members have taken or suggested various pragmatic approaches to addressing challenges in the application of the current services classification system. The proposed approaches again highlight the role of classification in ensuring the clarity certainty and predictability of specific commitments in services.
The evolution of services trade policy since the great recession
Are changes in services markets provoking reform restrictions or inertia? To address this question we draw upon a new World Bank-WTO Services Trade Policy Database (STPD) to analyse the services trade policies of 68 economies in 23 subsectors across five broad areas—financial services telecommunications distribution transportation and professional services respectively.