Trade in services: negotiating issues and approaches.

131 Pages·1.046 MB·English

by  OECD

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INDUSTRY, SERVICES AND TRADE
Trade in Services
Trade in Services
NEGOTIATING ISSUES AND APPROACHES
The services sector plays a vital infrastructure role in national economies, employs more
people than other sectors, and is the most dynamic sector of world trade. New negotiations
NEGOTIATING ISSUES
under the WTO General Agreement on Trade in Services, which began in January 2000, offer
AND APPROACHES
an important opportunity to reap the benefits of greater openness in services markets
worldwide.
The papers in this volume, produced as part of the OECD Trade Directorate's services
project, explore fundamental issues for the services negotiations: what are the barriers to
trade in services? How can those barriers be addressed in negotiations to ensure meaningful
results? How can services liberalisation be bolstered and underpinned by improved
regulatory transparency?
INDUSTRY, SERVICES AND TRADE
Ranging from the incidence and impact of economic needs tests, through quantitative and
qualitative formulas for reducing the barriers to trade in services, to possible disciplines
affording interested parties the opportunity to comment before regulations are enacted, this
volume identifies and analyses innovative solutions to the challenges facing services
negotiators.
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ISBN 92-64-19522-X
22 2001 05 1 P -:HSTCQE=V^ZWW[:
2000
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Trade in Services:
Negotiating
Issues and Approaches
ORGANISATION FOR ECONOMIC CO-OPERATION AND DEVELOPMENT
ORGANISATION FOR ECONOMIC CO-OPERATION
AND DEVELOPMENT
Pursuant to Article 1 of the Convention signed in Paris on 14th December 1960, and which came into
force on 30th September 1961, the Organisation for Economic Co-operation and Development (OECD)
shall promote policies designed:
– to achieve the highest sustainable economic growth and employment and a rising standard of
living in Member countries, while maintaining financial stability, and thus to contribute to the
development of the world economy;
– to contribute to sound economic expansion in Member as well as non-member countries in the
process of economic development; and
– to contribute to the expansion of world trade on a multilateral, non-discriminatory basis in
accordance with international obligations.
The original Member countries of the OECD are Austria, Belgium, Canada, Denmark, France,
Germany, Greece, Iceland, Ireland, Italy, Luxembourg, the Netherlands, Norway, Portugal, Spain,
Sweden, Switzerland, Turkey, the United Kingdom and the United States. The following countries
became Members subsequently through accession at the dates indicated hereafter: Japan
(28thApril1964), Finland (28th January 1969), Australia (7th June 1971), New Zealand (29th May 1973),
Mexico (18th May 1994), the Czech Republic (21st December 1995), Hungary (7th May 1996), Poland
(22ndNovember 1996), Korea (12th December 1996) and the Slovak Republic (14th December 2000). The
Commission of the European Communities takes part in the work of the OECD (Article 13 of the OECD
Convention).
Publié en français sous le titre :
COMMERCE DES SERVICES : QUESTIONS ET ENJEUX DES NÉGOCIATIONS
© OECD 2001
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75775 Paris Cedex 16, France.
FOREWORD
The negotiation of the General Agreement on Trade in Services (GATS) in the Uruguay Round
represented one of its major achievements, with the establishment of a structure and framework of
rules for global trade in services and for commitments to liberalise that trade. However, little actual
liberalisation was achieved in the Uruguay Round negotiations, with many countries’ commitments
often representing the regulatory status quo or, in some cases, less than that. But the agreement also
established a framework for future rounds of services liberalisation, and further negotiations under this
“built-in-agenda” commenced on 1 January 2000.
Between the end of the Uruguay Round negotiations and the start of these negotiations, global
trade in services did not stand still. Significant unilateral liberalisation was undertaken by both
developed and developing countries, with global trade in services now estimated at US 2.1 trillion
annually. This trade is not simply a developed country phenomenon: the share of services in total trade
has also increased in developing countries, and they account for approximately 30% of trade for both
developed and developing countries. Trade in services, especially infrastructure services such as
transport and financial services, has also underpinned the growth in trade in goods.
Services trade is vast and complex, covering sectors as diverse as telecommunications and
energy, communications and retail trade. Services are generally governed by often complex regulatory
structures that serve a wide range of policy objectives. The way services are supplied also varies
enormously between sectors; a wide range of state and private sector suppliers, monopolies and
competitive markets and now electronic means are used. Indeed, many sectors have seen enormous
technological change which is in the process of transforming the nature and supply of services. It is
against the backdrop of this dynamic and shifting landscape that further liberalisation of services is to
be negotiated.
This volume offers insights and ideas on some of the issues confronting the current services
negotiations. It begins by asking what the barriers are to trade in services. How common are they
between sectors or are they sector specific? What is the relative degree of restrictiveness of such
measures, alone or in combination? Are there particular measures – such as economic needs tests –
which are particularly important for some modes of services supply? Having sketched a portrait of the
types of measures affecting trade in services, it next explores how these measures might best be
addressed in negotiations. Can methodologies from goods negotiations be adapted for services or do
we need to think differently? Is it possible to develop liberalising formulas for services negotiations in
an effort to achieve more consistent and meaningful liberalisation? How can we reconcile the sector-
specific nature of commitments to liberalise services trade with the commercial reality of complex
inter-linkages between services sectors, where lack of liberalisation in a closely related sector may
undermine any liberalisation achieved for a given sector? The volume closes with an exploration of
some of the regulatory underpinnings to services liberalisation, in particular, the role of improved
regulatory transparency in ensuring effective liberalisation.
The five chapters here represent work undertaken by the Trade Committee’s trade in services
project between 1998 and the present. This of work has also drawn on work undertaken as part of the
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OECD Regulatory Reform project, with a view to identifying domestic best practices which might
usefully inform future WTO rule-making in the services field.
The first chapters in this volume are concerned with identification of barriers to trade in services.
Chapter 1, the consolidated list of barriers, draws together the results of six sectoral studies, covering
wholesale and retail trade, tourism, financial information services, environmental services and air
cargo services. It identifies barriers which commonly arose in all the sectors studied and attempts to
rank them in a preliminary way according to their degree of trade restrictiveness. The effect of
combinations of measures, i.e. where two measures which independently are not very restrictive but
which combined may have a highly trade restrictive effect, is also explored. The chapter notes that
sectors subject to particular regulatory systems, such as air cargo, tend to have highly sector-specific
barriers which are not readily comparable to those in other sectors.
Chapter 2 explores in depth one particular type of measure affecting trade in services: economic
needs tests (ENTs). While they could arise for all four modes, ENTs are most commonly found in
commitments related to mode 3 (establishment) and mode 4 (movement of natural persons). In the
absence of a clear definition of ENTs under the GATS, both those measures clearly identified in WTO
members’ schedules as economic needs tests and those which, while not specifically identified as
ENTs, are de facto ENTs are considered. The chapter analyses the scheduling of ENTs by WTO
members, including issues such as the lack of clarity and criteria for the application of ENTs. It
suggests ways to improve the transparency of ENTs, through both scheduling and notifications, as
well as to reduce the overall incidence of these measures.
Chapters 3 and 4 deal directly with the issue of negotiating modalities. Chapter 3 explores the use
of formulas to promote both the efficient conduct of services negotiations and the production of
substantive results. It notes that formulas need to be flexible, to balance the interests of all WTO
members, and to support and complement request-offer approaches. Both quantitative and qualitative
formulas are considered, with the latter considered more appropriate for services. Existing precedents
for standardised approaches in the GATS, such as model schedules and references papers, are also
examined and a possible “measures-based” formula aimed at reducing the incidence of certain types of
measures across the four modes of supply is proposed. Such a measures-based formula could apply
across all sectors or to individual sectors, and a combination of cross-sectoral and sector-specific
formula approaches may be required.
Chapter 4 explores possible approaches to grouping related services sectors for the purposes of
negotiating specific commitments under the GATS. It considers how such groupings or “clusters” of
related services might be defined, including in terms of commercial linkages and relevant regulatory
frameworks, and how they relate to the existing services sectoral classification used for negotiating
specific commitments. The range of options for using clusters to make specific commitments, from a
simple checklist for national negotiators to the possibility of using a cluster as the basis for a model
schedule, is explored, along with the benefits and problems of these approaches. Illustrative portraits
of potential clusters for tourism and travel services, environmental services, energy services and
express delivery are also included.
Finally, Chapters 5 and 6 explore possible improvements to transparency in domestic regulation.
Chapter 5 makes the case for the importance of transparency in facilitating trade in services and
outlines both existing WTO disciplines on transparency and emerging good practices of greatest
relevance to trade-related domestic regulation drawn from the country reviews undertaken in the
OECD Regulatory Reform project. Some ideas are then offered on how to enhance GATS disciplines
on the design, implementation, administration and enforcement of trade-related regulation, such as
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standardised notification procedures including the purpose of the proposed regulation, the provisions
related to services, contact details for relevant authorities and information on the regulatory process.
Chapter 6 builds on this work, but focuses on prior consultation, outlining both existing
disciplines on prior notification and opportunity for comment in WTO agreements and the current
practices of OECD Members. Drawing on both of these, some ideas are offered on appropriate models
for possible disciplines on prior consultation under the GATS. It suggests that the most appropriate
approach may be to require members to adopt prior consultation as a domestic procedure, rather than
to require notification to the WTO. Additionally, the chapter explores the types of limits which could
be set on prior consultation, given the need to ensure that any new obligations were not unduly
administratively burdensome, in particular for developing countries.
This book was edited by Julia Nielson and Pierre Sauvé, on the basis of papers prepared over the
period 1999-2001 by past and present staff of the OECD. It is published on the responsibility of the
Secretary-General of the OECD.
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TABLE OF CONTENTS
PART I. MEASURES AFFECTING TRADE IN SERVICES
Chapter 1. Consolidated List of Cross-sectoral and Sector-specific Barriers..................................11
Chapter 2. The Scheduling of Economic Needs Tests in the GATS: An Overview........................27
PART II. MODALITIES FOR SERVICES NEGOTIATIONS
Chapter 3. Cross-cutting (“Formula”) Approaches to Multilateral Services Negotiations..............51
Chapter 4. Using “Cluster” Approaches to Specific Commitments for Interdependent Services....61
PART III. UNDERPINNING LIBERALISATION:
TRANSPARENCY IN DOMESTIC REGULATION
Chapter 5. Strengthening Regulatory Transparency: Insights for the GATS
from the Regulatory Reform Country Reviews...........................................................93
Chapter 6. Transparency in Domestic Regulation: Prior Consultation..........................................115
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PART I
MEASURES AFFECTING TRADE IN SERVICES
Chapter 1
CONSOLIDATED LIST OF CROSS-SECTORAL AND
SECTOR-SPECIFIC BARRIERS
by
Rachel Thompson and Julia Nielson
The List of Cross-Sectoral Measures Affecting Trade in Services presented in this chapter is an
informal “reference list” of the principal measures affecting trade in services. The list:
• Organises the measures according to three broad categories: i) little or no effect on trade;
ii) restrictive effect on trade; iii) prohibitive/highly restrictive effect on trade.
• Provides an indication of additional sector-specific measures from each sector, as
appropriate.
• Provides examples of “combinations of measures” whereby two or more measures in
combination have a more restrictive effect than the categorisation of each such individual
measure indicates (e.g. several measures from the “restrictive” category, operating in
combination, may exert a highly restrictive effect on trade).
The use of the term “cross-sectoral” simply means that the measures on the list occur in each of
the sectors; it does not necessarily mean that all the measures in the list are “horizontal” (i.e. all-sector)
measures in the GATS sense of that term. Many were included in horizontal chapters of at least some
countries’ schedules, while other countries scheduled some of those same measures sectorally, across
more than one sector. This variation means that, in a consolidated list, it is not technically feasible to
indicate which measures are “horizontal” and which are “cross-sectoral” but not horizontal.
While measures scheduled as “horizontal” automatically apply to all sectors, sector-specific
measures in the financial information, environmental and wholesale trade sectors tend to occur across
the three sectors for at least some countries. However, for tourism services, retail trade services and air
cargo services, it is apparent that, while some measures are applicable, not all of the measures included
on the list also apply to retail trade services (where a number of the barriers are sector-specific), or to
tourism (which, in terms of GATS commitments, is relatively liberal overall). Air cargo services also
have very specific characteristics and are specifically regulated. While there is some overlap between
measures for this sector and others (for example with regard to investment limitations and residency
requirements), sector-specific measures dominate in air cargo services, in particular, in relation to
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