Transcript The Doha Services Negotiations

The Doha Services Negotiations
Bernard Hoekman (World Bank)
Beirut, November 12, 2009
Where are we?
Restrictiveness of services trade policies, 2008
60
IND
50
PHL
TUN
QAT
IDN
40
YEM
EGY
CHN
MYS
JOR
30
THA
LKA
TZA
PAK
MAR
KEN
OMN
SAU
RUS
VEN
BRA ARG
MEX
KOR
ITA
FRA
20
PRT
COL
UKR
ZAF
PER
ECU
10
GHA
KHMNGA
SEN
MNG
CHL
HUN
CZE
LTU TTO
POL
IRL
DNK
SWE
BEL
AUT
JPN
ESP
GRCCANUSA
FIN
DEU
GBR
NLD
AUS
NZL
7
8
9
10
Log of GD P per capita PPP, 2006
GDP per capita,PPP (co nstant 2005 international USD)
Source: Gootiz and Mattoo, World Bank Policy Research Working Paper (2009).
11
0
20
40
60
80
Services in Doha: a large “offer gap”
SAR
AFR
LAC
EAP
MENA
OECD
ECA
Offer I mprovement (Uruguay Round commitment-Doha Offer)
Offer gap(Doha Offer-Act ual policy)
Act ual Policy
Source: Gootiiz and Mattoo (2009)
100
GATS schedules, Doha offers and actual policy
TZA
IND
TTO
FRA DNK
BE L
ITA
SW E CA N
JP
N
CA N IRL
FRA
DEU
FIN
ES
PG RC
GB
R
DNK
NLD
SW
EAUT
CA N
ITA
FRA
BE
L
ITA JP N
AUS
SW
DNK
EAUT
BE
L
NZL ES PG RC
JP
N
DEU
AUS
FIN
GB
R AUT
NLD IRL
NZL ES PG RC
DEU
FIN
AUS
GB
R NLD IRL
NZL
0
20
40
60
80
ECU
TTO
PHL
LK A COL
TUN
TUN
SE
N
MAR
PAK
IDN
IND
LKEG
A COL
CHL
KE NIDN
MY
S
CHL
Y THA
GHA
NG A
THA
IND
MNG
MAR
BRA
PAKCHN
CHN
PHL
KOR
VE N
IDN
MEX
PE
TUN
THA
RBRA
MEX
VE N
EG Y
MY S
S AU
PRT
S
KOR
AU
ZAF
JOR
ARG
POL
ZAF ARG
KOR
RUS
TZA MAR
LKJOR
A COL BRA
MEXPOL
L TU HUN PRT
KHM
PAK
PE R VE N
KE
N
PRT
NG A
ARG L TU HUN CZE
KHM
GHA
HUN CZE
SE N
ECU
PE
RZAF
L TU
TTO CZE
UKR
CHL
POL
MNG UKR
0
10000
20000
30000
GDP per capita, PPP 2006
Restricti ve ness of GATS commitment
Fitted value s
Restricti ve ness of DOHA Offe rs
Fitted value s
Restricti ve ness of actua l p olicy
Fitted value s
Source: Gootiiz and Mattoo (2009)
40000
USA
USA
GATS: less than full coverage – mostly
‘lock-in’ vs. actual liberalization
E.g., EU-15 commitments and Doha offer
Mode of supply
GATS
commitments
Doha
offer
Difference
(% points)
Mode 1
Mode 2
Mode 3
Mode 4
50.5
66.9
63.0
3.5
57.2
88.2
82.9
4.5
6.7
21.3
19.9
1.0
Total
46.0
58.2
12.2
Why such little progress?
Potential explanations
1. Negotiating process: first Ag. & NAMA
2. Less “need” for reciprocal negotiation?
–
Much reform implemented unilaterally
3. Market access not that bad?
–
FDI has grown 10 times faster than GDP since 1990;
and doubled to reach $12 trillion in 2006
•
–
–
60% of this in services
Mode 1 tends to be open
Trade in services grew by 12% in 2008 …
4. GATS lock-in not perceived to be of great value?
–
Low expected probability of backsliding
Potential explanations (2)
5. GATS disciplines do not deal with regulatory
barriers (e.g., Dell in India)
6. Many developing countries have little export
interest – a “reciprocity problem”
7. Lack of an emergency safeguard mechanism
8. Regulators concerned about autonomy
9. Offshoring concerns; anti-migration forces
10. Worries about realization of social objectives,
ownership of firms, employment, etc.
-10
0
10
Cross-border services trade more
robust than goods trade in crisis
Japan
Brazil
Canada
-30
-20
Indonesia
United States
Mexico
Switzerland
Euro
area
Italy
New
France
Zealand
Germany
Australia
Poland Netherlands
United
Kingdom
Portugal
Czech
Republic
Spain
Slovak Republic
Hungary
Denmark
Belgium
Greece
Luxembourg
Korea
Ireland
Finland
Sweden
Norway
Turkey
-30
Source: Borchert and
Mattoo (2009)
-20
-10
Growth Rate Services Imports
Quarterly Growth Rates Imports
45 degree line
0
10
US Monthly Imports of Goods and Services
(y-o-y change)
Why is non-transport/non-travel
services trade more resilient?
• Demand for imports is less cyclical:
– Producer services (business process outsourcing)
increasingly an integral part of production function of
firms—cannot cut this back very much
– Outsourcing a way to cut costs in a very competitive
environment—demand rising, not falling
• Services trade is less external financedependent
– Many service outsourcers are internally financed
• New WTO report: services trade expanded by
12% in 2008
Rules are not relevant enough?
• Mode 1: In practice is mostly relatively free
• Mode 2: Protectionism does not “work”
• Mode 3: There are alternatives, such as bilateral
investment treaties to address FDI policy uncertainty
• Mode 4: Major (political) incentive to be protectionist
– are starting from an already very restrictive baseline
– Bilaterals/PTAs a more effective vehicle?
– Potentially more effective/feasible mechanism for
regulatory cooperation/competition?
• All these arguments have some relevance, but should
not be overstated: more commitments will reduce
uncertainty and can help promote competition
What could be done?
1. Focus effort on expanding coverage of specific
commitments rather than new liberalization
•
•
Greater policy certainty as the main objective
No real downside
2. Address regulatory concerns by strengthening
provisions on regulatory freedom
3. Focus more “aid for trade” on services
–
–
Invest in transparency/analysis at national level
Regulatory cooperation – including in regional contexts
4. More transparency: use WTO for regular scrutiny of
performance of services (outcomes), not just policies
Conclusions
• Greater ambition needed on expanding
coverage of specific commitments on services
– This critical to get a deal—pre-condition to
generate political support in key countries
• This does not imply actual liberalization or
less freedom to regulate
• Recognize the need for effective regulation –
and that “one size fits all” does not apply
– Expand cooperation (aid for trade) in this area