The Negotiation and Management of Regulations in the Trade in Services
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discrimination against foreigners have not been addressed. Trade liberalization in services has addressed a larger set of issues, but has not yet achieved significant results. Thus, the scope of the barriers to trade addressed by the GATS is more general and includes aspects of business practices and market structure, such as the existence of monopolies. However, the process of liberalization in services has faced serious difficulties at the multilateral level, and the difficulties are expected to continue. Some of the difficulties are as follows: • The positive list negotiations allow all countries (developed and developing) to adopt commitments at a low level of ambition. Thus far, the general commitments represent less than the status quo; the commitments of countries, particularly developing countries, do not necessarily represent the actual level of liberalization of the service sectors in these countries. • The complexity of the process has meant that the identification of measures, the organization of information, and the selection of activities are imperfect, particularly in many developing countries. The objective of transparency has therefore not been reached. • The classification of service activities is incomplete and outdated. A more robust system and a greater level of disaggregation are required.
The Liberalization of Services through Preferential Trade Agreements Countries have been actively engaged in bilateral, regional, and multilateral negotiations on services. The number of preferential trade agreements (PTAs) has accelerated over the last 10 years. Countries pursue bilateral or regional negotiations for several reasons, including, first, the domino effect, that is, the need to reduce the cost of exclusion from trading blocs; second, globalization, which creates the need to raise efficiency and improve access to foreign technologies and investment; third, credibility in that these agreements represent a way to lock in policy reform; and, fourth, foreign policy and security considerations (Hoekman and Kostecki 2001). PTAs and the GATS have comprehensive objectives in liberalization. However, there are relevant differences between PTAs and the GATS. Thus, PTAs have a more strongly sectoral profile. Liberalization in certain sectors, such as financial services and telecommunications, has been more extensive in PTAs in terms of rules and the elimination of barriers. In