IDEAS home Printed from https://ideas.repec.org/
MyIDEAS: Login to save this paper or follow this series

Tentative first steps : an assessment of the Uruguay Round agreement on services

  • Hoekman, Bernard

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.

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.

File URL: http://www-wds.worldbank.org/servlet/WDSContentServer/WDSP/IB/1995/05/01/000009265_3961019105408/Rendered/PDF/multi_page.pdf
Download Restriction: no

Paper provided by The World Bank in its series Policy Research Working Paper Series with number 1455.

as
in new window

Length:
Date of creation: 31 May 1995
Date of revision:
Handle: RePEc:wbk:wbrwps:1455
Contact details of provider: Postal: 1818 H Street, N.W., Washington, DC 20433
Phone: (202) 477-1234
Web page: http://www.worldbank.org/
Email:


More information through EDIRC

References listed on IDEAS
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.:

as in new window
  1. 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.
  2. Maskus, Keith E & Konan, Denise Eby, 1997. "Trade Liberalization in Egypt," Review of Development Economics, Wiley Blackwell, vol. 1(3), pages 275-93, October.
  3. 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.
  4. Hoekman, Bernard, 1992. "Conceptual and Political Economy Issues in Liberalizing International Transactions in Services," CEPR Discussion Papers 666, C.E.P.R. Discussion Papers.
  5. Hindley, Brian, 1988. "Service Sector Protection: Considerations for Developing Countries," World Bank Economic Review, World Bank Group, vol. 2(2), pages 205-24, May.
  6. André Sapir, 1987. "North-South issues in trade in services," ULB Institutional Repository 2013/8262, ULB -- Universite Libre de Bruxelles.
  7. André Sapir, 1993. "The structure of services in Europe: a conceptual framework," ULB Institutional Repository 2013/8184, ULB -- Universite Libre de Bruxelles.
  8. Bhagwati, Jagdish N, 1987. "Trade in Services and the Multilateral Trade Negotiations," World Bank Economic Review, World Bank Group, vol. 1(4), pages 549-69, September.
  9. 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.
Full references (including those not matched with items on IDEAS)

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

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 you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.

This information is provided to you by IDEAS at the Research Division of the Federal Reserve Bank of St. Louis using RePEc data.