A major success of the early post-war period was the negotiated reduction of barriers to international trade in commodities and manufactured goods, under the auspices of the GATT. The current challenge is to achieve a similar liberalization for trade in services - the sector which has overtaken manufacturing as the largest provider of jobs and growth in the advanced economies. The difficulties are legion. Data are scarce and definitions are contentious. There is no clear equivalent in services of the zero-tariff objective that can be defined in the trade of goods. Domestic service markets are often imperfect and each country has its own regulatory structure to protect consumers. Many developing countries are sceptical about the effects of freer service trade on their economies.
This paper develops an analytical framework to clarify negotiating objectives. It assesses the European Community's approach to liberalization and warns of the dangers of seeking 'equivalent reciprocity'. It suggests that a different approach and set of objectives are appropriate to the GATT, which lacks well-defined procedures for policy review and settlement of disputes, and whose members are more diverse. Finally, it evaluates the prospects for multilateral service liberalization in the Uruguay Round and in the EC by 1992, and suggests that such efforts can be complemented by unilateral and bilateral liberalization in certain service sectors.
`… provides a timely and comprehensive analysis of the issues that confront negotiators in writing new rules for trade in services and in negotiating a reduction of regulatory barriers … The book also contains a most informative discussion of the liberalization of trade in services within the EC, and a comprehensive review of the negotiations on trade services in the GATT context, giving the reader an excellent summary of the positions taken by various governments before and during the negotiations … All in all, Nicholaides brings to bear a superb analytical capability and a wonderful command of the English language in addressing an extremely complex subject. For an old hand, the elegance of the reasoning is enjoyable. For some less familiar with the issues, the lucid treatment provides invaluable insights into an important yet difficult topic.' - International Affairs
`The work is well organised and written, and the concepts and issues involved are explained in a manner which should be comprehensible to those with only an elementary knowledge of economics…Overall the work by Phaedon Nicolaides provides an excellent statement of the present position, and a fair conceptual analysis of the issues in the services trade.' - The Service Industries Journal
`This book should be of interest not only to the busy negotiator but also to the student of international economic relations.' - The Economic Journal
1. The challenge of reforming policy on services 2. The nature of services 3. Production and trade of services 4. Discrimination against regulation 5. Liberalization in the European Community 6. Services in GATT 7. Accommodating developing countries 8. Prospects for success