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Details for Services Liberalization and Domestic Regulation: Why is it Important?
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NameServices Liberalization and Domestic Regulation: Why is it Important?
DescriptionINTRODUCTIONDomestic regulation is a very complex issue in services trade policy formulation but it is acritical element in the liberalization of services trade. On the one hand, it is necessary to ensure consumer protection, services standards and several other public interest objectives, and on the other, it can act as a very significant restriction and curtail the market access granted to foreign service suppliers in any trade agreement. In the World Trade Organization (WTO), negotiations on domestic regulation are limited to the development of disciplines on qualification requirements and procedures, technical standards and licensing requirements. While the General Agreement on Trade in Services (GATS) and all subsequent services trade agreements recognizethe right of governments to regulate and to introduce new regulations, discriminatory (and to some extent, non-discriminatory) domestic regulations remain the predominant barriers to trade in services. This is why negotiation of disciplines on domestic regulations is very important. At the same time, regulatory deficiencies in developing countries and the resultant concerns regarding the potential negative impact of foreign competition, the need to ensure consumer protection and develop services standards, seriously limit the appetite for liberalization of services trade by governments in the South. Nevertheless, developing countries have much to gain from improved multilateral disciplines on domestic regulations for two principal reasons.Firstly, such disciplines can be instrumental in promoting and consolidating domestic regulatory reform efforts. Secondly, they can help services firms from developing countries to overcome barriers to their exports in foreign markets.This paper will examine the various issues regarding services trade liberalization and domestic regulations and their implications for effective market access with the aim of striking a balance between the potential gains from liberalization and public interest concerns. It will first briefly review some of the key issues in the interface between services liberalization and domestic regulation and examine the different perspectives from developing and developed countries.Next, it will argue that notwithstanding the specific mandate of the multilateral servicesnegotiations in the Doha Round, economic needs tests (ENTs) should be considered as domestic regulations and should be addressed in the current GATS negotiations. This is mainly due to the fact that ENTs proliferate in the services schedules of many countries and are very diverse in terms of their application but they all make market access unpredictable. In this regard, some examples from scheduled commitments in the WTO and in bilateral agreements will be analyzed.The paper will then focus on the multilateral negotiations in Geneva and consider the evolving attempt to craft disciplines on qualification requirements and procedures, technical standards and licensing requirements. In critically examining the draft text of the Chair of the Working Party on Domestic Regulation of January 2008 and the various responses to it by different groups in the WTO and other commentators it proposes a final version to address domestic regulation issues in services negotiations.
Filenameservices_liberalization_&_domestic_regulation_by_chaitoo.pdf
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Created On: 03/12/2009 17:25
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Last updated on 03/12/2009 17:32
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