GATS-Minus Trade Agreements: Why the Managerial School Does not Apply

It is accepted wisdom that the great majority of preferential trade agreements that include services do not comply with one or more of the GATS requirements. As trade in services becomes more important to global economic growth and efficiency, these agreements are actively undermining the World Trade Organization’s rules that are meant to increase global trade. Individual nations seek to include protectionist elements in agreements that violate WTO rules for internal political reasons. However, why a partner nation would accept such GATS-minus provisions can only be explained by geopolitical strategies or factors related to the managerial school, which proposes that the ambiguity of the WTO rules and lack of capacity to understand and/or implement the rules leads to GATS-minus agreements. However, this argument appears unfounded based on analysis of agreement configuration; the three major economies of the globe are partner to many of these agreements. Clearly, the managerial school does not apply when the leading nations of the WTO are complicit in agreements that undermine its rules. Instead, balance of power struggles between rising and/or revisionist powers provides the impetus for status quo and revisionist powers alike to conclude agreements that threaten the legitimacy and institutional integrity of the WTO.