Liberalizing Trade in Services: Negociations and Regulatory Reforms

This paper discusses how the coming WTO negotiations on services might best be used to help achieve national economic objectives. It argues that a fundamental rule of thumb for policy should be to seek to achieve and maintain a uniform (across-the-board) set of incentives for economic activities and that to achieve this in the service sector context a high dose of unilateralism (autonomous action by governments) is needed. Central decision-makers cannot rely on the trade negotiating process to obtain an outcome that is welfare-improving for their economies. Strategic choices must be made to define and sequence the liberalization and reform process. A number of instruments which can assist governments in identifying and pursuing reform priorities are discussed, including multilateral negotiations.