Trade in Service
AUGUST 2007,FIRST DRAFT
Services provisions in regional trade agreements: stumbling or building blocks for multilateral liberalization?
Carsten Fink World Bank Marion Jansen* WTO
Paper presented at the Conference on Multilateralising Regionalism Sponsored and organized by WTO - HEI Co-organized by the Centre for Economic Policy Research (CEPR) 10-12 September 2007 Geneva, Switzerland
The views expressed in this paper are the authors’ own and cannot be attributed to the World Bank, the WTO Secretariat, or WTO Members.
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1
Introduction A remarkable feature of the recent wave of regional trade agreements (RTAs) is the inclusion of a trade in services component in many agreements. At the end of 2006, the WTO counted 54 such services accords, of which only 5 predate the conclusion of the Uruguay Round.1 The rising interest in services trade agreements reflects a number of developments. First, as tariffs have come down, policymakers have turned their attention to other barriers restricting international commerce. The growth of world goods trade and the emergence of international production networks have highlighted the importance of an efficient services infrastructure—whether in telecommunications, finance, logistics, or legal advice. Market opening in services offers the prospect of performance improvements in services and allows goods producers to draw on multinational service networks in organizing their business. Second, technological progress has vastly expanded the range of services that can be traded crossborder. The well-known outsourcing phenomenon has led to the emergence of new dynamic export industries in services, which hold significant potential for low-wage developing countries. Finally, many governments have transferred the provision of infrastructure services to the private sector, expanding the scope for foreign participation in services. Indeed, services FDI has grown faster than total FDI in recent years, as service providers from
Services provisions in regional trade agreements: stumbling or building blocks for multilateral liberalization?
Carsten Fink World Bank Marion Jansen* WTO
Paper presented at the Conference on Multilateralising Regionalism Sponsored and organized by WTO - HEI Co-organized by the Centre for Economic Policy Research (CEPR) 10-12 September 2007 Geneva, Switzerland
The views expressed in this paper are the authors’ own and cannot be attributed to the World Bank, the WTO Secretariat, or WTO Members.
*
1
Introduction A remarkable feature of the recent wave of regional trade agreements (RTAs) is the inclusion of a trade in services component in many agreements. At the end of 2006, the WTO counted 54 such services accords, of which only 5 predate the conclusion of the Uruguay Round.1 The rising interest in services trade agreements reflects a number of developments. First, as tariffs have come down, policymakers have turned their attention to other barriers restricting international commerce. The growth of world goods trade and the emergence of international production networks have highlighted the importance of an efficient services infrastructure—whether in telecommunications, finance, logistics, or legal advice. Market opening in services offers the prospect of performance improvements in services and allows goods producers to draw on multinational service networks in organizing their business. Second, technological progress has vastly expanded the range of services that can be traded crossborder. The well-known outsourcing phenomenon has led to the emergence of new dynamic export industries in services, which hold significant potential for low-wage developing countries. Finally, many governments have transferred the provision of infrastructure services to the private sector, expanding the scope for foreign participation in services. Indeed, services FDI has grown faster than total FDI in recent years, as service providers from
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