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Services in a development round : three goals and three proposals

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  • Mattoo, Aaditya

Abstract

The benefits of services trade reform are huge but services negotiations in the World Trade Organization (WTO) are making little progress. A proximate cause is the current negotiating process, based on an inertial request-and-offer approach rather than a set of goals that would give direction and momentum to the negotiations. The paper suggests that WTO members should consider: (1) locking in the current openness of cross-border trade for a wide range of services; (2) eliminating barriers to foreign investment either immediately or in a phased manner where regulatory inadequacies need to be remedied; and (3) allowing greater freedom of international movement at least for intra-corporate transferees and for service providers to fulfill specific services contracts. A deeper problem is that WTO members have sought to negotiate market access in services without adequately addressing concerns that the General Agreement on Trade in Services (GATS) commitments limit regulatory freedom unduly and unpredictably, that regulatory institutions in many countries are too weak to cope with liberalized markets, and that there is no provision for the regulatory cooperation that is necessary for successful liberalization, particularly of temporary labor mobility. Three types of actions are needed: (1) at the current stage of its development, theGATS must focus primarily on disciplines for measures that discriminate against foreign services and providers, rather than on politically sensitive and legally complex rules for nondiscriminatory measures; (2) a credible assistance mechanism must be established to help developing countries make the regulatory improvements needed for successful liberalization; and (3) where necessary, WTO members should make access commitments on labor mobility conditional on the fulfillment of specific conditions by source countries-to screen services providers, accept and facilitate their return, and combat illegal migration.

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Bibliographic Info

Paper provided by The World Bank in its series Policy Research Working Paper Series with number 3718.

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Date of creation: 01 Sep 2005
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Handle: RePEc:wbk:wbrwps:3718

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Keywords: Trade and Services; TF054105-DONOR FUNDED OPERATION ADMINISTRATION FEE INCOME AND EXPENSE ACCOUNT; Trade and Regional Integration; Governance Indicators; ICT Policy and Strategies;

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References

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  1. Hoekman, Bernard, 2005. "Expanding WTO membership and heterogeneous interests," World Trade Review, Cambridge University Press, vol. 4(03), pages 401-408, November.
  2. Mattoo, Aaditya & Rathindran, Randeep, 2006. "Measuring Services Trade Liberalization and Its Impact on Economic Growth: An Illustration," Journal of Economic Integration, Center for Economic Integration, Sejong University, vol. 21, pages 64-98.
  3. Chaudhuri, Sumanta & Mattoo, Aaditya & Self, Richard, 2004. "Moving people to deliver services : how can the WTO help?," Policy Research Working Paper Series 3238, The World Bank.
  4. Aadtya Mattoo, 2000. "Financial Services and the WTO: Liberalisation Commitments of the Developing and Transition Economies," The World Economy, Wiley Blackwell, vol. 23(3), pages 351-386, 03.
  5. Mattoo, Aaditya & Wunsch, Sacha, 2004. "Pre-empting protectionism in services - the WTO and outsourcing," Policy Research Working Paper Series 3237, The World Bank.
  6. Sherman Robinson & Zhi Wang & Will Martin, 2002. "Capturing the Implications of Services Trade Liberalization," Economic Systems Research, Taylor & Francis Journals, vol. 14(1), pages 3-33.
  7. L. Alan Winters & Terrie L. Walmsley & Zhen Kun Wang & Roman Grynberg, 2003. "Liberalising Temporary Movement of Natural Persons: An Agenda for the Development Round," The World Economy, Wiley Blackwell, vol. 26(8), pages 1137-1161, 08.
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Citations

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Cited by:
  1. Martin, Will & Mattoo, Aaditya, 2008. "The Doha development agenda : what's on the table?," Policy Research Working Paper Series 4672, The World Bank.
  2. Hoekman, Bernard & Mattoo, Aaditya, 2007. "Regulatory cooperation, aid for trade and the general agreement on trade in services," Policy Research Working Paper Series 4451, The World Bank.
  3. Joseph F. Francois & Bernard Hoekman, 2009. "Services Trade and Policy," Economics working papers 2009-03, Department of Economics, Johannes Kepler University Linz, Austria.
  4. André Sapir & Bernard Hoekman & Aaditya Mattoo, 2007. "The political economy of services trade liberalization: a case for international regulatory cooperation?," ULB Institutional Repository 2013/8098, ULB -- Universite Libre de Bruxelles.
  5. Hoekman, Bernard & Mattoo, Aaditya, 2006. "Services, Economic Development and the Doha Round: Exploiting the Comparative Advantage of the WTO," CEPR Discussion Papers 5628, C.E.P.R. Discussion Papers.
  6. Jansen, Marion, 2006. "Services Trade Liberalization at the Regional Level: Does Southern and Eastern Africa Stand to Gain from EPA Negotiations?," CEPR Discussion Papers 5800, C.E.P.R. Discussion Papers.

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