The State of Play in GATS Negotiations: Are Developing Countries Benefiting?

Introduction

As with many of the other WTO negotiating areas, talks on “trade in services” present serious challenges to developing countries. One challenge is the fact that – whereas tariffs are a primary barrier to trade in goods – domestic laws and regulations are the primary barrier to trade in services.

Another challenge is the fact that most developing economies do not have a comparative advantage in the majority of tradable services. Therefore, they might frequently find themselves on the defensive side of the negotiating table. For instance, many of the service sectors in developing countries are still in a formative stage and, therefore, might not be able to compete successfully with international firms. Such a threat raises the stakes of the negotiations. Furthermore, the successful negotiation of arrangements for trade in services requires a detailed understanding of the intricacies of both the WTO General Agreement on Trade in Services (GATS) and the arena of domestic services sectors. Mastering these intricaintricacies is time- and resource-intensive.

This policy brief provides a chronological review of the GATS mandates as well as a critique of the state of play of GATS negotiations and their impact on the interests of developing countries, including the least developed countries (LDCs), in the negotiations.

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