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This paper discusses possible strategies for developing countries in negotiations on trade in services in the ongoing WTO Doha Development Round (DR). The liberalization of service imports (including through direct investment) will generate benefits through higher quality, lower prices, and better access mainly if competition among suppliers is enhanced. This is typically the case for producer services, such as domestic and international transport, financial services, and telecommunications. By contrast, the rationale for import liberalization is less clear for consumer or infrastructure services with network monopolies (such as water or energy distribution) or when demand is constrained by poverty (health care, education). In such cases, carefully calibrated government policies, possibly with international donor support, may be required to achieve a socially optimal level of supply. Finally, most service exports by developing countries face few import barriers in industrialized countries. However, under the GATS, service exports could also be delivered through temporary movement of natural persons. If Doha Development Round negotiations were to increase opportunities for temporary labor migration, the benefits to developing countries could be large. |
