GATS 2000 : new directions in services trade liberalization /
Pierre Sauvé, Robert M. Stern, editors.
Washington, D.C. : Brookings Institution Press, c2000.
xi, 544 p.
More Details
Washington, D.C. : Brookings Institution Press, c2000.
catalogue key
Includes bibliographical references.
A Look Inside
About the Author
Author Affiliation
Rudolf Adlung: World Trade Organization Toru Aizawa: Ministry of International Trade and Industry, Japan Americo Beviglia Zampetti: European Commission and Harvard University Malcolm Bosworth: Productivity Commission, Australia William J. Drake: Carnegie Endowment for International Peace Simon J. Evenett: Rutgers University Geza Feketekuty: Monterey Institute of International Studies Christopher Findlay: University of Adelaide, Australia Gilles Gauthier: Department of Finance, Canada Bernard M. Hoekman: World Bank Robert Howse: University of Michigan Merit E. Janow: Columbia University Guy Karsenty: World Trade Organization Patrick Low: World Trade Organization Juan A. Marchetti: Argentine Mission to the World Trade Organization Aaditya Mattoo: World Bank Patrick A. Messerlin: Institut d'Etudes Politiques, Paris Peter Morrison: Clifford Chance, London Kalypso Nicolaidis: St. Anthony's College, Oxford Erin O'Brien: Department of Finance, Canada Ken A. Richeson: Consultant Pierre Sauve: Harvard University and Organization for Economic Cooperation and Development Jeffrey J. Schott: Institute for International Economics Michel Servoz: European Commission Susan Spencer: Department of Finance, Canada Sherry M. Stephenson: Organization of American States Robert M. Stern: University of Michigan Rachel Thompson: Organization for Economic Cooperation and Development Joel P. Trachtman: Tufts University Tony Warren: Australian National University Mark A. A. Warner: Organization for Economic Cooperation and Development Christopher Wilkie: Organization for Economic Cooperation and Development Allison M. Young: Department of Foreign Affairs and International Trade, Canada
First Chapter

Chapter One

New Directions in Services

Trade Liberalization:

An Overview



             The Uruguay round of trade talks broke new ground by broadening the scope of world trade rules to cover trade areas never before subject to multilateral disciplines. Services, which encompass activities from banking, transportation, travel, telecommunications, and audio-visual services to professional services such as engineering and the law as well as the dizzying array of Internet-based service offerings, have been with little doubt where such broadening was most significant in economic terms.

    Services account for more than 70 percent of production and employment in advanced industrial societies, levels that many of the developing world's emerging economies are today fast approaching. With the negotiation of the General Agreement on Trade in Services (GATS) the policies affecting access to and conditions of competition in service markets are today firmly rooted in the multilateral trading system. The pathbreaking rules established by GATS govern one of the world economy's most dynamic sectors, bringing much needed transparency and fairness to the $2.2 trillion worth of services traded globally on an annual basis.

    Despite the growing domestic and international importance of services and the increased worldwide recognition of that importance, efforts to reap the benefits of more open services markets had until recently lagged far behind efforts devoted to opening markets for manufactured goods. The entry into force of GATS in 1995 marked a watershed by providing the first multilateral set of binding rules and disciplines with which to launch orderly trade and investment liberalization for services.

    Although the Uruguay Round negotiations were generally more successful in developing trading rules than in increasing market access opportunities (whether for services or agriculture), they nonetheless laid a firm foundation for future negotiations. That future is already upon the international community as it intensifies preparations for a new round of GATS talks, which the Uruguay Round's built-in agenda has set for January 1, 2000 in Geneva.

    The essays that make up this volume address the most pressing questions now arising in services trade. Some of these were in fact not addressed by the first generation of GATS negotiators. This volume is intended to help shape the policy choices that members of the World Trade Organization (WTO), whether from developed or developing countries, will need to make as they resume negotiations under GATS. It should also prove of interest to those involved in regional attempts at liberalizing trade and investment in services. The essays have been written with policymakers and practitioners in mind. They speak first to those in government, business, and nongovernmental circles who will deal directly with difficult policy challenges--old and new--in the next set of GATS talks.

    The GATS 2000 negotiations will confront two central challenges: completing the incipient framework of GATS rules and disciplines so as to ensure the agreement's (and the WTO's) continued relevance in a globalizing environment, and achieving greater overall trade and investment liberalization than was possible during the Uruguay Round and in subsequent sectoral negotiations.

    What are the stakes of the next GATS round in terms of trade and investment liberalization? And what are the benefits associated with multilateral attempts to achieve such liberalization? Much of the analysis in this volume focuses on these two challenges. They are important, not least because, unlike in the Uruguay Round, negotiators will enter the GATS 2000 Round against the backdrop of a tested, if far from complete or fully satisfactory, framework of rules and disciplines and a machinery for negotiating liberalization commitments. The task of setting priorities on where scarce negotiating resources should best be spent in the GATS 2000 talks should accordingly prove easier. In turn, this should help make a success of a negotiating cycle that many WTO members intend to keep relatively short.

    Two reasons can be adduced to explain the greater ease that GATS members may experience in setting priorities for the next round. First, there has never been a lull in GATS negotiations, which have been going on since the inception of the Uruguay Round and the entry into force of the WTO in 1995. Second, and closely related, WTO members have been able to internalize a great deal of the learning by doing that has characterized the agreement's development. However, a critical ingredient to the success of the next round is that members heed some of the lessons they have learned, especially when it comes to proposals to amend the architecture of GATS rules or seek alternative routes to trade and investment liberalization under existing rules. WTO members must similarly keep an eye to the future by ensuring that GATS rules properly anticipate the development of new technologies and the greatly expanded scope they offer for new forms of service delivery within and across borders.

    In keeping with the conference format in which the following essays were originally presented, the volume is organized into five parts. Parts I to IV address the challenge of how best to complete and refine the incipient framework of rules negotiated during the Uruguay Round, while part V is chiefly devoted to a discussion of various negotiating modalities for the new round.

Part I. The Benefits of Services Trade and

Investment Liberalization

    The four chapters that make up the book's opening part provide a clearer sense of the economic and commercial significance of what is at stake in the GATS 2000 Round. Such stakes are considerable.

    The opening chapter by Guy Karsenty attempts to measure the value of commercial transactions carried out globally under GATS's four modes of supply: (1) cross-border trade, (2) commercial presence (or investment), (3) consumption abroad, and (4) the movement of natural persons (service suppliers). Karsenty notes that although knowledge of the size and nature of internationally traded services remains sketchy, efforts undertaken during the last decade to improve trade statistics, including data on sales of services by local affiliates of multinational firms (so-called establishment-related trade), have greatly improved our knowledge of the flows involved.

    Karsenty estimates that total measurable trade in services as defined by GATS is $2.2 trillion. This represents 7.6 percent of world GDP and close to a third of total trade. These are significant amounts, especially for a sector that was long regarded as nontradable. Although cross-border trade and commercial presence, GATS's two major modes of delivery, account for four-fifths of total trade in services, Karsenty shows that, on the basis of available statistics, "traditional" trade in services--defined to measure cross-border transactions--is today larger in absolute size than establishment-related trade in services. Such a finding interestingly contrasts with GATS's negotiating reality, which has seen most commercially meaningful liberalization commitments focused on establishment-related trade. Karsenty's findings draw attention to the untapped potential for cross-border liberalization that GATS members will undoubtedly pay closer attention to in the next negotiations, particularly in light of the explosive growth of electronic commerce.

    Karsenty also documents the relative insignificance of trade involving the movement of service providers. Although data on this subject are notoriously poor, such a finding is broadly in line with the political sensitivities typically associated with this highly restricted mode of supply, one in which a number of developing-country GATS members enjoy a strong comparative advantage.

    The lack of a clear statistical description of services did not prove a decisive issue in the Uruguay Round, given the attention that negotiators devoted to the development of rules and disciplines. However, to the extent that matters of trade and investment liberalization will loom more importantly in the GATS 2000 Round, Karsenty argues that the need for improved services statistics could become more pronounced, whether in setting quantitative negotiating objectives or in measuring the balance of concessions resulting from negotiations. Efforts to deepen the nascent dialogue between statisticians and GATS negotiators and greater research efforts in this often neglected area will be needed to ensure that statistical reporting systems take better account of negotiating needs. Improvements in services data may similarly allow political proponents of trade and investment liberalization to more credibly measure the resulting gains and to better document how economic adjustment operates in the sector.

    Although there is little doubt that improved data on trade flows are needed to support services negotiations, it is arguably more important from an economic perspective to gather data that shed light on barriers restricting competition in services markets. The chapters by Karsenty and by Tony Warren and Christopher Findlay illustrate how data on barriers affecting trade in services remain noticeably weaker and less comprehensive than those available for trade in goods. This is a matter of concern on several levels, not least of which is that a paucity of information on the extent and impact of impediments to services trade plays into the hands of those interested in limiting liberalization reform efforts. Warren and Findlay stress that transparency of policy affecting services trade and investment is critical for successful reform, whether it is enacted unilaterally or pursued through trade negotiations. Making the costs of protection as transparent as possible can go a long way toward building coalitions that support liberalization, particularly among user industries. It will also allow policymakers to have greater confidence in their chosen path of reform.

    Like Karsenty, Warren and Findlay note that the need for a more complete inventory of barriers to trade and investment in services will likely be greater in the GATS 2000 Round given its heavier emphasis on liberalization-related matters. Gaining a clearer sense of existing barriers and establishing a more explicit hierarchy of their nature, importance, and sectoral incidence are critical to assessing the potential for trade expansion and the magnitude of the welfare gains that may be obtained by pursuing liberalization.

    Warren and Findlay outline a methodology aimed at securing greater information about impediments to services trade that they developed as part of a research project funded by the Australian Research Council. This methodology involves three stages. First, available qualitative evidence that compares the way nations discriminate against potential entrants in various service industries is collected. This evidence is then transformed into a frequency index, coupled with an attempt to weigh discriminatory policies by their economic significance. Second, the impact of the policies as measured by the frequency indexes is assessed against national differences in domestic prices or domestic quantities, with the effect of other factors explaining national differences taken into account. And third, the measured impact of the frequency indexes (the coefficient) on prices or quantities is incorporated into a general equilibrium model to assess the economywide impacts of the policies at issue. Where possible, partial equilibrium modeling can also be undertaken to allow the specific impacts of liberalization to be more clearly understood.

    Warren and Findlay show that despite the overall dearth of information it is still possible to develop weighting schemes by which policy measures affecting international services transactions can be compared. Measures of impediments to trade in services are becoming available that can legitimately be used as tools for the documentation and comparative assessment of reform efforts and liberalization commitments. The increased sophistication of their measurement techniques has several implications for the negotiating process: information may be more readily available to help set priorities at the national and international levels; liberalization commitments can be codified more easily, which should in turn facilitate cross-sectoral negotiations; and, perhaps more controversially, the adoption of a negative list approach (whereby all nonconforming measures are generated by the negotiations) to scheduling GATS commitments may be facilitated by the greater information disclosures that such techniques afford.

    Warren and Findlay make a persuasive argument for giving priority attention to improving data and qualitative information on barriers to entry, trade, and investment that affect services. International organizations such as the World Bank, the UN Conference on Trade and Development (UNCTAD), and the Organization for Economic Cooperation and Development (OECD), all of which have recently begun work in this area, should cooperate more closely. Multinational businesses should also devote resources required to launch what the chapter by Pierre Sauvé and Christopher Wilkie calls an "operation transparency," which would entail drawing up non-legally binding lists of nonconforming measures affecting trade and investment in services. At the WTO level, some progress was made in the Uruguay Round with the creation of the Trade Policy Review Mechanism. However, TPRM resources, and the wealth of information contained in country reports, have yet to be marshaled with a view to generating the type of comparative analytical work that could help underpin future negotiations.

    The chapters by Geza Feketekuty and Rudolf Adlung move away from quantitative matters to focus on normative issues. Perhaps the greatest acquis of GATS is how it has allowed a fuller appreciation of the dual nature of services. That is, services are burgeoning economic activities but also, and most important from a political economy perspective, they provide the infrastructure that allows modern economies to function. This dual nature and how such duality has shaped the evolution of GATS rules and disciplines are much in evidence in both papers.

    Feketekuty offers a comprehensive survey of some of the architectural shortcomings of GATS while advancing practical means to strengthen the agreement both as a system of rules and an instrument of liberalization. He contends that the five years that have elapsed since the adoption of GATS is too short a period to form any conclusive judgments. Empirical evidence from GATT and other agreements, and experience gained in the context of European integration, suggests that more than a decade may elapse before new institutional arrangements are actively used by governments and businesses in managing their affairs. Still, Feketekuty observes that beyond the results of negotiations carried out to date (which show significant variance across countries and sectors), GATS itself has had a major impact by triggering national debates on the optimality of national regulatory systems in important service sectors. This debate has led in many countries to significant liberalization of domestic and foreign trade through domestic regulatory reforms. Although such reforms may not always be bound in schedules of commitments, they offer a clear objective that negotiators should aim to lock in during the GATS 2000 Round.

    Feketekuty argues that while the conceptual foundations of GATS are solid, negotiators could usefully revisit some of its structural deficiencies, many of which resulted from a hasty transfer of concepts borrowed from the GATT system. Efforts to overcome the lack of precision (and of user friendliness) of GATS's current approach to scheduling liberalization commitments need to rank high on the next round's agenda of structural reform. There is also a need to remedy the confusing overlap that characterizes the relationship between market access (Article XVI) and national treatment (Article XVII). He also sees merit in spelling out more clearly the hierarchy of precedence that flows from GATS's three-tiered architecture (framework, sectoral annexes, and schedules of commitments).

    Like other contributors, Feketekuty does not advocate reopening the debate over the merits of positive and negative list approaches to liberalization. GATS members should concentrate instead on drafting clear guidelines for scheduling commitments, something that was not done in the Uruguay Round, and stand prepared for a detailed and labor-intensive peer review of national schedules. As is suggested by William Drake and Kalypso Nicolaïdis elsewhere in this volume, Feketekuty foresees the need to revisit the increasingly blurred lines of demarcation among modes of supply and regulatory jurisdictions arising from the advent of electronic commerce. Looking to the future, he encourages trade negotiators to think about ways to gradually integrate GATT and GATS disciplines under one body of common rules. This challenge already arises in government procurement and is likely to surface as attention turns to the more inherently generic domains of investment and competition policy.

    Rudolf Adlung's chapter focuses on the political economy of adjusting to services trade and investment liberalization, a subject that often receives insufficient attention in negotiating circles. The costs and benefits--economic, social, and political--of adjusting to the heightened competition that open markets bring will be important in determining WTO members' participation in and contribution to the GATS 2000 Round. Although the greater immediacy and concentrated costs of policy reform and trade liberalization tend to outweigh the longer-term and more widely diffused benefits associated with greater market openness, Adlung shows how forces have in recent years combined to facilitate reform efforts in services and encourage nonreciprocal forms of autonomous liberalization.

    He notes that users of services have become increasingly vocal in opposing supplier inefficiencies, technological change poses an ever increasing challenge to maintaining traditional rents, and the adjustment costs associated with greater competition are more manageable in political and social terms to the extent that labor experiences less disruption from services trade liberalization. On the last point Adlung notes how barriers to intersectoral mobility are noticeably lower for services employees than for people involved in farming, mining, or steel production. What is more, unlike manufacturing or the production of primary commodities where adjustment often tends to proceed in a depressed sectoral environment, structural change in services frequently coincides with periods of economic expansion fueled by the pursuit of regulatory reform, privatization, and external trade and investment liberalization. An environment of liberalized trade and investment can more easily absorb the resources that adjustment releases, all the more so as additional sources of supply enter newly contestable markets.

    Adlung notes that trade policy considerations have on the whole been of secondary importance as a source of services liberalization. To be sure, GATS did provide an opportunity to give greater permanency (so-called lock-in) and legitimacy to unilateral domestic policy undertakings, with positive implications for production and trade. But it has yet to prove a central reform stimulus per se. An important question, then, concerns the incentives that may have to be built into the GATS 2000 Round to encourage countries to more readily pursue reform efforts via GATS. According to Adlung, an important challenge will be to come up with negotiating concepts ranging from formula-based approaches to liberalization to the development of an opt-out clause in the form of emergency safeguard provisions that could help translate reform efforts into bound commitments.

    Adlung sees indications that the hitherto free-riding developing countries of GATS are increasingly aware that binding commitments signal that reforms are permanent and irreversible. The next round, he believes, particularly if it involves more comprehensive (rather than unduly sector-specific) negotiations, may generate some rebalancing of commitments across countries and sectors, particularly in user industries (finance, travel, IT-intensive manufacturing) that may be loath in a more competitive environment to carry the burden of services protection.

Part II. Completing the GATS Framework:

The Built-in Agenda

    Negotiators will enter the GATS 2000 Round with much unfinished business from the Uruguay Round. More than a dozen years after the Uruguay Round's inception, the framework of GATS rules and disciplines is still very much under construction, with work outstanding on the five fronts that this and the following part of the volume focus on. These are emergency safeguards, subsidies, government procurement, movement of natural persons, and domestic regulation.

    That GATS should be seen as a work in progress is hardly surprising considering the diversity of activities it encompasses and the rapid pace at which developments in technology and regulatory approaches affect policymaking and rulemaking. As the essays featured in part IV show, GATS negotiators are already confronted with policy choices on many fronts, ranging from more comprehensive rules on investment to the integration of generic competition policy that targets private anticompetitive conduct or the development of rules aimed at facilitating services trade through electronic means.

    Before turning their attention to these challenges, GATS members must finish what the Uruguay Round left unfinished. Since 1994 little progress has been made on these leftover issues, some of which (for example, emergency safeguards against injurious and unanticipated import surges) had been earmarked for completion by mid-1997. In part, this reflects the fact that much attention was devoted during this period to completing outstanding sectoral negotiations, particularly in telecommunications and financial services. But it also reflects other forces. In the case of emergency safeguards and subsidies, and quite apart from the fact that such issues divide the WTO membership along developmental (North-South) lines, problems have arisen from the sheer technical complexity inherent in developing disciplines in hitherto uncharted areas. In the case of government procurement, progress has doubtless been hampered by the manner in which WTO members have approached the subject, with calls for the development of multilateral disciplines for services procurement sitting alongside existing multilateral disciplines applying to services under the Government Procurement Agreement (GPA) as well as calls for nonbinding rules to improve transparency and due process in public purchasing. Progress has also been slowed because each component, and none more so than rules governing the mobility of people, involves some North-South tension.

    The chapter by Gilles Gauthier examines emergency safeguards and subsidies. It asks whether it is feasible and indeed desirable to extend such disciplines to services. Two core issues are addressed: whether the GATT model for goods would work for services and whether new rules would contribute to deepening and broadening the liberalization objectives of GATS.

    Gauthier offers two conclusions on safeguards. First, the economic rationale for them is ambiguous: they are costly to consumers and producers and to economic efficiency in general. Second, for various practical and conceptual reasons flowing from the particularities of services trade and the architecture of GATS (multiple modes of supply, difficulty in determining product "likeness"), as well as the paucity of data required for credible injury determinations, a generic GATT-like safeguard clause is largely unworkable for services. Gauthier comments that the case for safeguards is further reduced by the fact that GATS already features many safeguard-like provisions, not least of which is the ability it affords countries to pursue a sequenced à la carte approach to trade and investment liberalization. Still, recognizing that "the art of trade policy strikes a balance between what policymakers practice and what economists preach," he notes that one cannot easily dismiss the political economy imperative for developing safeguard disciplines. This is the insurance policy function they may perform by encouraging GATS members to undertake more liberal commitments. Should a consensus favoring the adoption of a GATS safeguard clause arise, Gauthier suggests that GATS members inscribe emergency safeguards in their schedules for individual sectors, with general disciplines or criteria conditioning their use. He argues that sector-specific measures should be of limited duration so as to delay liberalization commitments only temporarily and should be triggered by transparent domestic procedures, applied on a most favored nation basis, and subject to appropriate notification, reporting, and surveillance requirements.

    Gauthier notes that the subject of subsidy disciplines has not given rise to the same intensity of debate and discussion as that of safeguards. For this reason, deciding on the desirability or feasibility of introducing disciplines will require a more thorough identification phase to determine the extent to which subsidies exist in services industries and the circumstances in which they may result in adverse trade or investment effects. This process has only just begun among GATS members. There may well be valid reasons to temper expectations, as witnessed by the generally disappointing experience of attempts by the Industry Committee of the Organization for Economic Cooperation and Development to monitor industrial subsidies or the swiftness with which subsidy-related issues fell off the negotiating table in recently abandoned negotiations on the Multilateral Agreement on Investment.

    As for safeguards, determining the feasibility of subsidy disciplines will need to factor in the specificities of services trade. Although Gauthier suggests that some guidance could come from the WTO's Agreement on Subsidies and Countervailing Measures, it is not a panacea. In particular, consideration of a countervailing mechanism would appear undesirable from the standpoint of both policy and concept. Export subsidies, which are prevalent in large infrastructure projects, and investment incentives, which have recently proliferated beyond the OECD area to a number of emerging economies, may deserve further consideration, particularly in the context of discussions on how best to improve GATS provisions relating to commercial presence.

    The chapter by Simon Evenett and Bernard Hoekman examines the case for embedding disciplines on government procurement in GATS. It concludes forcefully that they may not be necessary and that the domestic and foreign welfare effects of discriminatory procurement regimes will likely be negligible and transient to the extent that domestic markets remain contestable. The authors draw attention to an important characteristic of procurement markets: the fact that many procured services may not be viably supplied across borders, commercial presence typically representing the preferred route in light of the natural advantages that flow from local establishments. For this reason a country's foreign investment regime assumes crucial importance in maximizing the economic efficiency and domestic welfare gains from an open procurement regime. Market presence is indeed a precondition for foreign firms to contest procurement markets. If they are not permitted access to the market, which in practice means establishing a commercial presence, procurement regimes and possible multilateral disciplines are largely irrelevant.

    Clear and practical policy implications flow from Evenett and Hoekman's analysis. Because the economic damage inflicted by discriminatory procurement policies depends on the contestability of markets, the optimal policy response should be to encourage open and competitive markets and vigorously enforce competition policy. This policy is one that many countries can easily pursue on their own. The authors emphasize the removal of barriers to entry and presence in markets, especially on commercial presence. Priority in the GATS 2000 Round should be devoted to easing market access and national treatment commitments under GATS and not on developing GATS-specific disciplines on government procurement.

    While Evenett and Hoekman suggest that trade and investment liberalization may ultimately obviate the need for multilateral procurement disciplines applicable to both goods and services, they recognize the value of promoting transparency in procurement as a means of reducing corruption and rent seeking. They argue that although the case for the multilateral agreement on transparency and due process in public procurement currently being considered by WTO members is much stronger than the economic case for seeking to ban discrimination, any procurement disciplines in the WTO should apply to both goods and services.

    The chapter by Allison Young focuses on the movement of service providers, a topic not commonly viewed as forming part of GATS's built-in agenda of unfinished business. Yet, built-in and unfinished are apposite terms to affix to the first attempt ever to contend with labor mobility within the multilateral trading system. Negotiated at the behest of developing countries with large pools of highly skilled (and competitively priced) labor and multinational companies, and drawing on the pioneering provisions developed in the 1987 Canada--United States Free Trade Agreement, the so-called mode 4 of GATS governing the movement of persons to provide services broke important new ground, affirming the conceptual equivalence between capital and labor under GATS.

    Young's examination of the schedules of GATS commitments shows that a significant liberalization of mode 4 was not achieved in the Uruguay Round nor in the follow-up sectoral negotiations. The reasons are not hard to come by. Attempting to liberalize the movement of natural persons as service suppliers raises complex and highly sensitive domestic regulatory issues concerning immigration and labor market policy. Faced with demands from developing countries and businesses for liberalizing such movement, immigration and labor ministries are being forced, somewhat reluctantly, to undertake the difficult technical and political task of figuring out how to respond to such demands as the trade policy community gives the subject renewed attention in the run-up to the GATS 2000 Round. The challenge of overcoming such reluctance and securing greater regulatory lock-in--indeed of getting the two policy communities to view the world similarly enough so that tensions can be mediated and progress made--remains formidable. How then can this be achieved?

    As a first step, Young says that GATS members need to be dearer on what constitutes mode 4 trade. Greater clarity is all the more important in light of the general opaqueness of GATS's rules and scheduling guidelines. The absence of agreed definitions of employment categories or functions means that inconsistency and vagueness plague interpretation of GATS schedules. Such vagueness also means that immigration and labor ministries tend to retain excessive regulatory discretion. Such transparency problems need to be remedied to lend more certainty to scheduling and open new negotiating possibilities in future rounds. Young suggests that GATS members should be encouraged to submit to comprehensive peer reviews of their schedules where mode 4 commitments are concerned.

    Also requiring attention are job and skill-level classifications, the absence of which has typically prompted regulatory authorities to maintain restrictive policies. Young's proposed solution is to underpin mode 4 commitments with nomenclature developed by the International Labor Organization in its International Standard Classification of Occupations (ISCO). There remains also the challenge of overcoming the restrictive effects that nondiscriminatory regulations in licensing, technical standards, or qualification procedures may pose to the cross-border deployment of service providers. Young recalls that Article VI:4 of GATS makes some effort to remedy this problem, adding that it could be useful to subject relevant aspects of immigration and labor market development policies to the article's rests of necessity or of at least-trade-restrictiveness.


Copyright © 2000 The Brookings Institution. All rights reserved.

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Unpaid Annotation
With the negotiation of the General Agreement on Trade in Services (GATS), the policies affecting access to, and conditions of competition in, service markets are today firmly rooted in the multilateral trading system. Written with policymakers and practitioners in mind, the essays in this volume address some of the most pressing questions arising in services trade today -- some of which were not addressed by the first generation of GATS negotiators.
Table of Contents
New Directions in Services Trade Liberalization: An Overviewp. 1
Why Are We Doing This? Recalling the Benefits of Services Trade and Investment Liberalization
Assessing Trade in Services by Mode of Supplyp. 33
Measuring Impediments to Trade in Servicesp. 57
Assessing and Improving the Architecture of GATSp. 85
Services Trade Liberalization from Developed and Developing Country Perspectivesp. 112
Commentp. 132
Commentp. 136
Completing the GATS Framework: The Built-In Agenda
Government Procurement of Services and Multilateral Disciplinesp. 143
Deja Vu, or New Beginning for Safeguards and Subsidies Rules in Services Trade?p. 165
What Next for Labor Mobility under GATS?p. 184
Commentp. 211
Commentp. 218
Domestic Regulation and GATS: Regulatory Reform to Effective Market Access
Regulatory Reform and Trade Liberalization in Servicesp. 225
From Policed Regulation to Managed Recognition in GATSp. 241
Market Access through Mutual Recognition: The Promise and Limits of GATS Article VIIp. 283
Commentp. 307
Commentp. 317
Commentp. 322
New Issues on the Horizon: Investment, Competition Policy, and the E-Commerce Revolution
Investment Liberalization in GATSp. 331
Competition Policy and GATSp. 364
Global Electronic Commerce and GATS: The Millennium Round and Beyondp. 399
Commentp. 438
Commentp. 442
GATS 2000: Challenges Ahead
Is There a Better Way? Alternative Approaches to Liberalization under GATSp. 449
Formula Approaches to Improving GATS Commitmentsp. 473
Liberalizing Trade in Services: Reciprocal Negotiations and Regulatory Reformp. 487
GATS and Regional Integrationp. 509
Commentp. 530
Commentp. 536
Commentp. 541
Contributorsp. 543
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