Conducting a Trade-Related Regulatory Audit in Financial Services
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development potential of trade agreements and for securing a progressively higher level of liberalization commitments. Although all members of the World Trade Organization (WTO) suffer an information deficit in services negotiations, many developing countries can be at a particular disadvantage, lacking the large network of embassies, organized industry associations, foreign affiliates, chambers of commerce, and even individual company presence in foreign markets from which governments in many developed countries can source information. Such uneven access to information means the negotiating requests emanating from some developed partners tend to be more specific in nature, focusing on previously identified and rank-ordered, sector-specific, or horizontal measures whose progressive elimination or liberalization is being sought. Many developing countries are unlikely to be in a position to make similar types of requests, particularly in the early stages of the request-offer process. Making the most of engagement in services negotiations also implies being clear on the nature and implications of the negotiating proposals being tabled. The Uruguay Round’s General Agreement on Trade in Services (GATS) negotiations saw a number of instances in which WTO members scheduled full commitments with no remaining limitations on national treatment and market access whose ultimate commercial value to their trading partners was greatly diminished by their incomplete implementation and enforcement. More, therefore, needs to be done to assist services negotiators from developing countries in achieving successful services negotiations. Two important starting points should be mentioned in this regard. First, negotiators need to take a broad view of trade and investment in services and the multiplicity of measures whose combined effects ultimately determine the quality of scheduled commitments. This task is not easy given the great sectoral diversity of services markets and the tendency to treat sectors and various policy instruments in isolation from one another. This difficulty is magnified by the lack of sectoral expertise that many developing countries have in trade-related regulatory matters. Second, negotiators need to be in a position to connect all the dots that make up development-enhancing commitments. That is, they must be able to formulate a series of pertinent policy questions (and ultimately an effective negotiating strategy) that will help ensure effective access—and not only access in theory—at the end of the negotiations. To make the latter point more specific, note that opening services markets typically involves a considerable number of policy parameters and various layers of impediments, some of which may overlap. First, many of