Developing Countries and the Uruguay Round Negotiations on Services

In the late 1980s many developing countries experienced something of a paradigm shift, in that governments began to pursue more market oriented domestic policies. There was increasingly a perception that liberalizing access to service markets was a potentially low cost and effective method of improving the quality and efficiency of domestic service sectors. These unilateral policy developments increased the incentives for developing countries as a group to participate in a multilateral agreement to liberalize trade in services. This paper explores the extent to which initial negotiating positions of developing countries are reflected in the draft General Agreement on Trade in Services (GATS) that has emerged from the Uruguay Round negotiations. One issue that is addressed is whether the unilateral policy changes implemented by many developing countries in the late 1980s had a discernible impact on their negotiating stances and on the framework agreement. Another objective is to discuss the potential relevance of the draft GATS for developing countries. Given that many developing countries are pursuing regulatory reform and liberalization efforts, to what extent will signing the GATS help governments seeking to enhance the efficiency of their service sectors?