. MEASURES AFFECTING INVESTMENT AND TRADE IN SERVICES A TPF needs to cover the full array of issues affecting a country’s prospects for tr...
. MEASURES AFFECTING INVESTMENT AND TRADE IN SERVICES A TPF needs to cover the full array of issues affecting a country’s prospects for trade and development. In addition to border measures affecting goods, these may include a very wide range of matters related to investment, trade in services, and any other law, regulation, or policy that might constrain or promote the country’s ability to compete in the global market. The specific measures at issue may differ greatly from one country to another, depending on the types of industries in which it is engaged, its principal partners in international trade and investment, and the nature of its domestic legal and regulatory regime. Perhaps the most problematic topic for interministerial consultations is trade in services, a subject that naturally implies the possibility that trade negotiators may step onto the turf of the ministries of transportation, finance, justice, and education, among others. The issue is partly one of awareness. From actors to accountants, and from bus drivers to bankers, service providers may never have thought of themselves as actual or potential exporters. They may
Table 15. Countervailing duty orders imposed on developing countries, 1995–2014 Source: Calculated from WTO data posted at https://www.wto.org/english/tratop_e/scm_e/CV_MeasuresByExpCty.pdf. Africa and the Middle East Americas Asia and the Pacific Subject to 11–100 orders — — India Subject to 1–10 orders Côte d’Ivoire, Israel, South Africa, United Arab Emirates Argentina, Brazil, Colombia, Mexico, Venezuela (Bolivarian Republic of) China, Indonesia, Iran (Islamic Republic of), Republic of Korea, Malaysia, Pakistan, Philippines, Sri Lanka, Taiwan Province of China, Thailand, Turkey, Viet Nam Table 16. Countervailing duty activity initiated by developing countries, 1995–2014 Source: Calculated from WTO data posted at https://www.wto.org/english/tratop_e/scm_e/CV_MeasuresByRepMem.pdf and https://www.wto.org/english/tratop_e/scm_e/CV_InitiationsByRepMem.pdf. Africa and the Middle East Americas Asia and the Pacific 11+ orders imposed — Mexico — 1–10 orders imposed South Africa Argentina, Brazil, Chile, Costa Rica, Peru, Venezuela (Bolivarian Republic of) China, Turkey Investigations but no orders Egypt, Israel — India, Pakistan 32 TRADE POLICY FRAMEWORKS FOR DEVELOPING COUNTRIES: A MANUAL OF BEST PRACTICES be quite surprised to hear that their activities come within the ambit of trade negotiations. Matters are more complicated if the ministries that regulate these sectors object to a process by which the trade ministry may negotiate commitments affecting the laws and regulations that they implement. Many officials in trade ministries have had similar, negative experiences in the run-up to new negotiations, encountering strong resistance from other government agencies when they request guidance on what the country should seek in a negotiation, and be prepared to give up, when bargaining over the commitments made on trade in services. Both for services providers and the corresponding line ministries, trade negotiators often find that it is necessary to conduct awarenessraising exercises such as national seminars on trade in services in order to educate the public and private sectors and to establish working relationships with regulators and stakeholders. The analysis of tariff and trade data for goods is relatively simple by comparison with the task of assessing the impact of non-tariff measures affecting goods, services, investment and intellectual property. Information on these measures can be much more difficult to obtain, and their consequences can be harder to quantify, both for one’s own country and one’s trading partners. Services pose especially difficult challenges. The general scheme and language of the General Agreement on Trade in Services (GATS) mimic the principles and structure of the goods-oriented GATT, but on closer inspection, this agreement and its subject matter are conceptually far more complex. The way in which commitments are negotiated and expressed is entirely different, and analysts cannot easily gauge the actual effect of these commitments. A country’s GATS commitments do not readily indicate whether they are truly liberalizing, or are just bound at the applied rate, or even above that rate (i.e. permit a country to become more restrictive than it presently is). Matters are further complicated by the fact that there is no universally accepted nomenclature for services, and even the most economically advanced countries’ statistics on trade in services are at best incomplete. These are all obstacles that need to be overcome, to the maximum extent possible, when assessing a country’s actual and potential engagement in trade in services. Countries are affected in varying ways by trade in services. They may have interests as both exporters and importers, depending on the sector and the mode in which the service is being traded, and the services in question may affect a wide range of related sectors. Even goods-producing sectors will rely on access to quality services at affordable prices, and restrictions on foreign providers of those services may impose costs on other domestic producers. That is why the TPF for Zambia recommended that the country pursue unilateral liberalization of its services sector, adopting a “4 plus 5 strategy” in the WTO. “This strategy,” it asserted, “will help the country focus on the sectors which are important for reducing costs and are currently impeding growth:
financial services, telecommunications, transport and energy” (p.52). The TPF also called for liberalization of five key services sectors at the regional level, namely business and professional services, communications services, financial services, transport services and labour mobility (i.e. the entry of business persons). TPFs often stress the importance of services for national development. The report on Angola offers a fine example of a TPF that deals in depth with services. It recommended that a national strategy plan be developed for the services sector, looking at how infrastructural services can be built through the channelling of public funding, public–private partnerships, regional cooperation and producer services. The TPF also had more specific recommendations with respect to the financial, energy, construction, tourism, transport and telecommunications sectors. Similarly, services figured prominently in the TPF for Zambia. It advocated a 4 plus 5 strategy that contemplates unilateral liberalization by way of WTO commitments on financial services, telecommunications, transport and energy services sectors, as well as regional liberalization of business and professional services, communication services, financial services, transport services and labour mobility in respect of the entry of business persons.
The report on the Dominican Republic attributes significant improvement in infrastructure and telecommunications, financial, port and airport concession services to the incentives and special legislation aimed at promoting development through private participation (domestic or foreign). Small, open economies are highly services oriented, as the report of Jamaica noted, but are also significant net importers of those process services that are integral to value chain participation. That TPF argued that the country will need to intensify its efforts to attract external investment and strengthen its services capabilities outside of the very successful tourism and travel sector.
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