The Importance of the Issue of
Quantifying Barriers to Trade in Services
to the World Trade Organisation as a Whole

Introduction

• What is GATS ?

• What is this presentation about ?

• What are services ?

What are services ?

The webpage: http://www.mcwdn.org/ECONOMICS/GoodService.html defines services as follows:

"Services would be the performance of any duties or work for another; helpful or professional activity."

What is GATS ?

The General Agreement on Trade in Services (GATS) was negotiated in the Uruguay Round.

This Presentation .....

“...most existing measures of services barriers are subject to some uncertainty. The reason is that they are indirect measures of the price-quantity dimensions involved, since services barriers do not readily lend themselves to direct measurement in the same way that tariffs do.”
Robert Stern: “Quantifying Barriers in Trade in Services”

Issues

• Can GATS in fact be effectively incorporated into the WTO framework ?

• Could its problems with quantification turn out to be a problem for the WTO/GATT as a whole ?

The Quantification Issue

• Frequency measures

• Price-Based measures

• Quantity-Based measures

• Financial-Based measures

The Importance of Services

“... services are the largest and most dynamic component of both developed and developing country economies. Important in their own right, they also serve as crucial inputs into the production of most goods.”
The WTO website page: Services Trade

“Although reliable statistics on services are few, conventionally measured trade in services is generally agreed to be equivalent in value to about one-quarter of international trade in goods.”
WTO: An Introduction to the GATS

The WTO Context

“countries joining the GATT/WTO neither have significantly different trade from non-members, nor do they experience increases in trade, holding other factors constant.”
Andrew Rose: Do We Really Know that the WTO Increases Trade ?

The World Trade Organisation is not even about trade, anyway !

Two results of World War II:

1. the ideology called "Political Correctness"

2. international organisations, such as the UN and its agencies -- and also the WTO

Main reasons for the ITO and GATT :

• to use trade to increase specialisation and efficiency, thus avoiding another depression, with its negative political consequences

• to stop trade disputes turning into war

Conclusion

• RTAs undermine WTO ?

• USA suspicious of international organisations ?

• The SMP (Services Measuring Problem) may add to these tensions

On the other hand .....

We learned yesterday that some countries are resisting efforts to link issues.

What do
you
think ?

References

• Agreement Establishing the World Trade Organization.

• Rose, Andrew: Do We Really Know that the WTO Increases Trade ? MS.

• Stern, Robert: Quantifying Barriers in Trade in Services, in Bernard Hoekman, Aaditya Mattoo, and Philip English (eds): Development, Trade and the WTO (Washington DC, World Bank, 2002).

• The Economics Website: Goods and Services
  http://www.mcwdn.org/ECONOMICS/GoodService.html

• World Trade Organization (2003): 10 Benefits of the WTO Trading System.

• World Trade Organization (November 2003): Measuring Trade in Services.

• World Trade Organization: Services Trade. http://www.wto.org/english/tratop_e/serv_e/serv_e.htm

• World Trade Organization (September 2003): Understanding the WTO.

• WTO Secretariat, Trade in Services Division (October 1999): An Introduction to the GATS.