Tentative first steps : an assessment of the Uruguay Round agreement on services
A major result of the Uruguay Round was the creation of a General Agreement on Trade in Services (GATS). The GATS greatly extends coverage of the multilateral trading system, establishing rules and disciplines on policies affecting access to service markets. In this paper, the author asks: what does the GATS do to bind policies? And has it established a mechanism likely to induce significant liberalization through future rounds of negotiations? The GATS consists of two elements: 1) a set of general concepts, principles, and rules that apply across the board to measures affecting trade in services; and 2) specific commitments on national treatment and market access. These apply only to service activities listed in a member's schedule - reflecting the agreement's"positive-list"approach to determining coverage - and only to the extent that sector-specific or cross-sectoral qualifications or conditions are not maintained. The impact of the GATS depends largely on the specific commitments made by members, and sectoral coverage is far from universal. High-income countries scheduled about half of their service sectors; developing countries as a group (including Eastern European countries in transition) scheduled only 11 percent. And the sectors scheduled often continue to be subject to measures that violate national treatment or limit market access. High-income countries scheduled only 28 percent of the universe of services without exceptions to national treatment or market access obligations. For developing countries, that figure is only 6.5 percent. Much remains to be done. The GAT's weaknesses include: 1) a lack of transparency. No information is generated on sectors, subsectors, and activities in which no commitments are scheduled - most often the sensitive areas where restrictions and discriminatory practices abound; 2) the sector-specificity of liberalization commitments. Negotiations were driven by the concerns of major players of each industry, leading to an emphasis on"absolute"sectoral reciprocity, limiting the scope for incremental liberalization, tradeoffs across issues, and an economywide perspective; and 3) the limited number of generic rules. Rather than lock in liberal situations that exist, the GATS allows for the future imposition of restrictions (creating"negotiating chips"). To foster nondiscriminatory liberalization, sectoral agreeements should be firmly imbedded in a framework of general rules and disciplines. Many of the framework's general principles apply only if specific commitments have been made. Therefore they are not general. Proposals for improving the GATS should probably build on the existing structure as mush as possible. Possibilities include the following: 1) ultimately, apply the same rules to goods and services. Eliminate the artificial distinction between the two; 2) adopt a negative-list approach to scheduling commitments for the sake of transparency; 3) eliminate overlap between national treatment and market access; 4) develop generic,"horizontal"disciplines for the different modes of supply through which service markets may be contested; 5) explore the possibility of converting quota-like market access restrictions to price-based equivalent measures, thus ensuring that the most-favored-nation and national treatment principles are satisfied; 6) make framework disciplines general by eliminating all instances in which rules are conditional on the scheduling of specific commitments; and 7) agree to a formula-based approach for liberalizing and expanding the GAT's sectoral coverage in future negotiations.
|Date of creation:||31 May 1995|
|Contact details of provider:|| Postal: 1818 H Street, N.W., Washington, DC 20433|
Phone: (202) 477-1234
Web page: http://www.worldbank.org/
More information through EDIRC
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Hoekman, Bernard & Mavroidis, Petros C, 1995. "The WTO's Agreement on Government Procurement: Expanding Disciplines, Declining Membership?," CEPR Discussion Papers 1112, C.E.P.R. Discussion Papers.
- Maskus, Keith E & Konan, Denise Eby, 1997. "Trade Liberalization in Egypt," Review of Development Economics, Wiley Blackwell, vol. 1(3), pages 275-293, October.
- Deardoff, A.V. & Brown, D.K. & Stern, R.M. & Fox, A.K., 1995. "Computational Analysis of Goods and Services Liberalization in the Uruguay Round," Working Papers 379, Research Seminar in International Economics, University of Michigan.
- Sapir, André, 1991.
"The Structure of Services in Europe: A Conceptual Framework,"
CEPR Discussion Papers
498, C.E.P.R. Discussion Papers.
- André Sapir, 1993. "The structure of services in Europe: a conceptual framework," ULB Institutional Repository 2013/8184, ULB -- Universite Libre de Bruxelles.
- André Sapir, 1985.
"North-South issues in trade in services,"
ULB Institutional Repository
2013/8264, ULB -- Universite Libre de Bruxelles.
- Bhagwati, Jagdish N, 1987. "Trade in Services and the Multilateral Trade Negotiations," World Bank Economic Review, World Bank Group, vol. 1(4), pages 549-569, September.
- repec:fth:michin:379 is not listed on IDEAS
- Hindley, Brian, 1988. "Service Sector Protection: Considerations for Developing Countries," World Bank Economic Review, World Bank Group, vol. 2(2), pages 205-224, May.
- Bernard M. Hoekman & Robert M. Stern, 1991. "Evolving Patterns of Trade and Investment in Services," NBER Chapters, in: International Economic Transactions: Issues in Measurement and Empirical Research, pages 237-290 National Bureau of Economic Research, Inc.
- Hoekman, B.M., 1992.
"Conceptual and Political Economy Issues in Liberalizing International Transactions in Services,"
309, Research Seminar in International Economics, University of Michigan.
- Hoekman, Bernard, 1992. "Conceptual and Political Economy Issues in Liberalizing International Transactions in Services," CEPR Discussion Papers 666, C.E.P.R. Discussion Papers.
When requesting a correction, please mention this item's handle: RePEc:wbk:wbrwps:1455. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Roula I. Yazigi)
If references are entirely missing, you can add them using this form.