The General Agreement on Trade in Services: Doomed to Fail? Does it Matter?

Little progress has been made to date in using the GATS framework to lock-in already implemented unilateral reforms, let alone in inducing new liberalization. The same is true for rule-making efforts. A number of potential explanations for the lack of traction are identified and assessed. These include limited feasibility of using the reciprocity mechanism to mobilize domestic export interests; less need for reciprocity to achieve global welfare improvements in policy; weaknesses in domestic regulatory capacity; and uncertainty/asymmetries regarding the magnitude and distribution of costs and benefits of policy reforms. All these factors play a role in reducing the scope for the GATS to be an effective instrument to help governments overcome domestic and international policy externalities. Changes in negotiating modalities and focus could help strengthen the relevance of the GATS as an instrument of multilateral cooperation.