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| Assessment
of Trade in Services |
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World
Trade Organisation (TN/S/W/310 June 2002 02-3211)
Council for Trade in Services
Special Session Original: English
Communication
from Cuba, Dominican Republic, Kenya, Nigeria, Pakistan,
Senegal and Zambia.
The following communication has been received from the
above-mentioned delegations with the request that it
be circulated to the Members of the Council for Trade
in Services.
Developing countries have been expressing their interests
and intents relating to the conduct and results of assessment
of trade in services. This communication builds on these
previous submissions and makes an attempt to identify
some preliminary results that can be inferred from the
assessment of trade in services as it has been conducted
to date.
Developing countries recognise the potential benefits
of liberalization in trade in services for their economies. However,
gains from services liberalization have often been nullified
by such factors as limited access in modes and sectors
of export interest to them and/or supply-side constraints. Therefore,
though they recognise the contribution of services to
GDP and employment in their economies and by extension
the potential of services exports for economic development,
developing countries consider that the assessment of
trade in services, as mandated in the GATS, should be
conducted in overall terms and on a sectoral basis with
reference to the objectives of the agreement including
those set out in paragraph 1 of Article IV in order
for them to participate in a commercially meaningful
manner in the services negotiations.
Available data, though not adequate and complete in
all respects, does allow the drawing of inferences.
Much discussion has been devoted to the lack of internationally
comparable statistics on services. However, it is also
important to re-emphasise that a qualitative assessment
is likewise possible and necessary (especially as several
of the goals of Article IV are of a qualitative nature). Lack
of comparable statistics does not prevent assessment. What
can be done with the available information should not
be underestimated. In that context, the contribution
of Argentina to assessment is a good example. Document
S/CSS/W/44 successfully analysed the available figures
with a view to identify those factors and trends, which
are relevant for the current negotiations, in particular
from a developing country perspective.
It is believed that the following results of assessment,
based on available research and analysis, will go a
long way in assisting developing countries formulate
appropriate "requests" and determine the feasibility
of "offers" to be made, notwithstanding the
fact that assessment of trade in services remains an
ongoing activity of the Council for Trade in Services.
Results of the Assessment
of Liberalization of Trade in Services
1. The fundamental objective
of the GATS Preamble - to achieve an overall balance
of rights and obligations for all WTO Members - has
not been attained. Developing countries have made
what for them represented substantial commitments under
GATS with respect to many service industries but have
not received concessions of any meaningful economic
value, including under the movement of natural persons
mode of supply. This imbalance was further accentuated
with the major commitments that some developing countries
undertook autonomously including under structural adjustment
programmes and as a result of the negotiations
on financial and telecommunication services, without
receiving reciprocal benefits.
2. Developing countries'
share of world services exports has only increased by
a small percentage. In the period from the adoption
of the GATS to 1999, the increase had only been of 6
per cent, mostly due to the export competitiveness of
Asian developing countries. On the other hand, developed
countries account for three quarters of world exports
of services and represent most of the 20 top exporters
in different services sectors. Moreover, many service
sectors are characterised by a high degree of concentration.
Service providers from developing countries (most of
whom are SMEs) face competition from larger service
multinationals. Thus, services trade liberalisation
under the GATS has only in part led to increasing developing
countries' services exports, in particularly when compared
to developed countries service exports. Most trade in
services still takes place between rich countries.
3. For some developing
countries, growth in imports has been larger than growth
in exports, and many of them face a deficit in trade
in services in most sectors. Thus, the growth in
exports of services under the GATS has been more than
offset by the growth in service imports.
4. The specific objectives
of GATS Article IV have not been achieved.
Developing countries face a number of critical barriers
to their services exports - ranging from prohibition
of access to services markets (e.g. nationality, residency
or visa requirements); price-based measures (e.g.
entry and exit taxes, visa fees, tariffs on goods in
which services are embodied); subsidies granted
in developed countries (including the high-technology
sectors); technical standards and licensing requirements;
and lack of transparency in government measures. Moreover,
the access to information channels and distribution
networks are subject to discriminatory processes and
have restricted competition. Thus, services trade
liberalization under the GATS does not either per se
and automatically bring about benefits for developing
country economies, their services providers and consumers
or lead to the achievement of objectives under Article
IV of GATS.
5. Benefit from privatisation
and liberalisation is not automatic without the appropriate
preconditions and policies to encourage and enhance
technological capacity and diffusion as well as complementary
policies to help improve access to essential services
for the poor.
6. Liberalisation
of services entails adjustment costs. Thus, without
adequate flanking policies services trade liberalisation
under the GATS might not achieve its overall goal, inscribed
in its Preamble, to promote the economic growth of all
trading partners and the development of developing countries.
Developing countries' need to give priority attention
to the provision of universal access with regard to
essential services and public goods can only be met
if they are provided with the institutional and capacity
building support to maintain adequate flanking policies.
June 14, 2002. |
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