GATS Negotiations: Why Service Industry Associations Should Get Involved. (Exporting Better)

International Trade Forum, July-September 2002 | Go to article overview

GATS Negotiations: Why Service Industry Associations Should Get Involved. (Exporting Better)


The second, ongoing round of negotiations for the General Agreement on Trade in Services (GATS) puts exporters around the world in a position to help shape the future of this important sector. However, many service exporters and industry associations do not know where to begin. This article draws on ITC's GATS Consultation Kit to explain why and how service industry associations should communicate with their policy-makers.

Trade negotiators may not always be familiar with the capabilities and competitiveness of their service exporters and so they are not yet in a good position to develop appropriate negotiating strategies.

Most service exporters and associations are also unfamiliar with the GATS and its schedules--or lists of liberalization commitments--and are therefore not necessarily able to provide useful input for trade negotiators. ITC has developed tools to help both sides to talk productively to each other.

Industry spokespersons

Given that individual service firms do not usually belong to the same business associations, and in the absence of an "umbrella" services organization, it is very difficult to reach potential and existing exporters in order to give them the opportunity to provide input to these important trade negotiations. This is why trade support institutions (TSIs)--such as service industry associations and chambers of commerce--are key interlocutors in reaching enterprises in the services sector, advocating for trade in services issues and advising governments on appropriate negotiating objectives for trade in services.

Why get involved

For years, service firms in developing countries have exported their services despite non-tariff barriers to trade. In some instances, working with a local partner has made this possible. They will in all probability continue to export, but the participation of TSIs in the services trade liberalization process can help firms to be more profitable and successful in their export initiatives. Experience has shown that a supportive, rather than protectionist, policy environment is of greater benefit to service exporters.

The following points underline the importance of services trade liberalization to service exporters:

* Access to world-class services will help exporters in developing countries to capitalize on their competitive advantage.

* Liberalization can lead to lower prices, better quality and a broader choice for consumers. Such benefits impact the economic system and help to improve supply conditions for many other products and services.

* Another benefit is the opportunity to innovate faster, a key success factor for exporters of services. Countries with liberalized markets have been great product and process innovators.

* Service commitments under the GATS foster foreign direct investment, bringing technology transfer and new skills and technologies that benefit the wider economy.

* The GATS will result in greater transparency, allowing firms to provide their services under predictable, stable conditions. They are able to plan for the future with greater certainty, encouraging long-term investment. Ultimately, service exporters and consumers in both industrial and developing countries will be the winners from the agreement.

Approaching deadline

In the current round of negotiations, 30 June 2002 was the deadline for requests for market access in the various sectors, and members have until March 2003 to make liberalization offers.

As member economies take stock of their initial requests for market access and prepare to make their final offers, it is crucial that service exporters and industry associations familiarize themselves with the GATS and be vocal about the trade-related issues of their industry.

To maximize gains from the GATS negotiations, developing country governments should revise their national GATS schedule to reflect the needs and growth potential of their domestic service industries. …

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