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Market Access in Services 99 C S P E C I S T A U L D I MARKETACCESS: UNFINISHEDBUSINESS E POST-URUGUAYROUND S INVENTORYANDISSUES ThisstudywaspreparedbyWTO'sEconomicResearchandAnalysisDivisionwith importantcontributionsbytheAgricultureandCommoditiesDivision,theTradein ServicesDivisionandtheIntegratedDataBaseSectionoftheStatisticsDivision. TheprojectcoordinatorwasMarcBacchetta. 6 Table of Contents Page Section I: Introduction 1 Section II: Industrial Products 7 A. Post-Uruguay Round tariffs 7 B. Other trade policy measures 18 Technical Notes to Section II 24 Appendix to Section II 28 Section III: Agricultural Products A. The Agreement on Agriculture’s origins 45 B. Trade policies under the Agriculture Agreement 46 C. Trends in trade and continuation of the reform process 64 Appendix Tables 68 Section IV: Services 97 A. The international services economy 97 B. Market access in services 99 C. The Uruguay Round and subsequent negotiations 103 D. What can be expected in the new round? 114 E. Issues arising in negotiations 122 Appendix to Section IV 133 Bibliography 141 i Tables, Boxes and Figures Page Section II Table II.1. Bound tariffs on industrial products. Scope of bindings, simple averages, standard deviations and tariff peaks 8 Table II.2. Bound tariffs on industrial products. Simple averages by country and MTN category 11 Table II.3. Bound tariffs on industrial products. Simple average tariff and standard deviation by stage of processing 14 Table II.4. Bound and applied tariffs on industrial products. Simple averages 17 Table II.5. Applied tariffs on industrial products. Duty free lines, simple averages, standard deviations and tariff peaks. 19 Table II.6. Frequency of core non-tariff barriers of selected countries 20 Table II.7. Pervasiveness of core non-tariff barriers affecting the manufacturing sector 21 Table II.8. Initiation of anti-dumping investigations by level of development of reporting and affected economies, 1995-1999 23 Chart II.1. Initiation of anti-dumping investigations, 1987-1999 23 Section III Table III.1. Uruguay Round Agreement on Agriculture. Base rates and rates of reduction 47 Table III.2.Non-ad valoremtariff bindings as a percentage of all bound agricultural tariffs 48 Table III.3. Bound tariffs on imports of agricultural and industrial products. Scope of bindings, simple averages, standard deviation, and tariff peaks 49 Table III.4: Bound tariffs on imports of agricultural products. Simple averages by stage of processing and by country 51 Table III.5. Average applied and bound tariff rates for agriculture 52 Box III. 1. Economic impact of tariff quotas 53 Table III.6. Tariff quotas. Simple average fill rates, 1995-1998 54 Table III.7. Tariff quotas by administration method, 1995-1999 54 Box III.2. Tariff quota administration system 55 Table III.8. Tariff quotas. Simple average fill rates by administration method, 1995-1999 57 Table III.9. Domestic support. Total aggregate measurement of support commitments by Member, 1995-1998 58 Table III.10. Agricultural export subsidies. Number of product groups affected by export subsidy reduction commitments and post-Uruguay Round outlay commitment level by Member 61 Table III.11. Agricultural export subsidies. Commitments and notifications regarding subsidized volumes by product group, 1995-1998 62 Table III.12. Exports of agricultural productsof selected regions and countries (excluding intra-EU trade). Growth rates, 1990-1998 64 Section IV Chart IV.1. Share of services in GDP of selected countries, 1998 98 Box IV.1. Review of MFN exemptions 100 Table IV.1. Number of MFN-exemptions by sector, as of March 2000 101 Table IV.2.Article XVI: limitations on market access 102 Table IV.3: Structure of commitments by Members, June 2000 106 ii Page Chart IV.2. Structure of WTO Member’s commitments by sector, June 2000 107 Chart IV.3. Structure of market access commitments by mode, June 2000 107 Chart IV.4. Relationship between level of income and GATS commitments 108 Table IV.4. Participation in the extended negotiations on financial services 110 Box IV.2. Movement of natural persons 112 Table IV.5. Commitments scheduled by recently acceding Members 115 Table IV.6. Structure of commitments on market access acceding countries versus"old"Members 116 Table IV.7: Possible negotiating formulae for services 118 Box IV.3. WTO Work Programme on Electronic Commerce 127 Box IV.4. Proposed GATS annex on tourism 132 iii I. Introduction This study has two closely related objectives: to evalu- The assessment of market access in services, therefore, ate post-Uruguay Round market access conditions and to must be concerned not only with measures applied at the contribute to a clarification of the stakes in the ongoing border, which are easily identifiable but often less signifi- process of multilateral trade negotiations in the market cant in the services context, but also with a much larger access area. Industrial tariffs are included along with and range of regulations and controls going far beyond trade agriculture and services, even though they are not cur- policy as traditionally understood. For services, Member rently the subject of a negotiating mandate, because their countries’ schedules state how much access foreign ser- inclusion contributes to both objectives. The study also vice providers are allowed for specific sectors and activi- provides a brief overview of the progress to date in the ties. mandateda negotiations on agriculture and services. The "post-Uruguay Round" situation discussed in this Negotiations to improve market access for goods and study is the one that will be reached when all provisions services are, as everyone knows, only one part of a long of the WTO Agreement are fully implemented. At this list of topics that have been suggested for a possible stage, early in 2001, after more than five years of the ex- agenda of a new WTO round. No attempt is made in this istence of the Agreement, implementation of the provi- study to explore any of those other suggested topics. sions of the WTO Agreement is fairly advanced not com- The description of market access conditions for indus- pleted. With regard to market access, the situation differs trial products focuses on the content of Members' sched- among sectors. For industrial products, tariff cuts were ules of tariff concessions. Schedules of tariff concessions implemented in five equal stages starting on 1 January are, of course, only one—albeit important—factor which 1995 and terminating on 1 January 1999. Only some ex- determines the terms and conditions of access to a mar- ceptions remain.1 Similarly, the phasing out of grey-area ket. Market access is also affected by rules and disciplines measures had to take place within a period not exceeding in other parts of the WTO Agreement and other condi- four years after the date of entry into force of the WTO tions in the market, but the present study does not discuss Agreement. Only one specific measure per Member could those factors in a systematic manner. For industrial prod- be maintained until the end of 1999. For agricultural ucts, the schedules of tariff concessions take the form of products, implementation will take longer. Developed binding commitments on tariffs. For agricultural products, country Members had six years and developing country it is necessary to extend the discussion beyond traditional Members 10 years beginning in 1995 to implement their market access considerations—i.e. the tariff and other re- tariff cuts. Implementation periods for the reduction of strictions on imports. Disciplines with regard to all mea- non-exempt domestic support and export subsidies are al- sures affecting trade in agriculture, including domestic so six years for developed Member and 10 years for de- agricultural support and the subsidization of agricultural veloping Members. exports were considered to be essential by negotiators in the Uruguay Round. This study focuses on the content of For services, establishing the date at which all provi- agricultural commitments as recorded in Members' sched- sions of the WTO Agreement are fully implemented is ules which list not only bound tariffs on agricultural prod- even more difficult. WTO Members have been negotiating ucts, but also commitments regarding tariff quotas, ex- on services continuously since the end of the Uruguay port subsidies, and domestic support. Round in December 1993. In addition to the negotiations on rule making directed towards completion of the The concept of market access for servicesis even more diffuse, for two reasons. First, the international exchange framework of the GATS, there have been four discrete ne- of services is vastly more complex than the movement of gotiations whose purpose was the expansion of market- goods across frontiers. It is difficult, sometimes impossi- access commitments—on financial services, maritime ble, to disconnect the production of services from their transport, movement of natural persons and basic consumption. This means that either the producer or the telecommunications. The essential motivation for further consumer must move in order for a transaction to occur, negotiation in the first three cases was dissatisfaction, for which accounts for the definition of trade in services in different reasons, with the results achieved in these sec- the GATS as taking place under different modes of supply, tors in the Uruguay Round. The case of basic telecommu- including the movement of capital and persons. Secondly, nications, however was different. Negotiators had agreed the production and consumption of services are subject to during the Uruguay Round that the time was not ripe for a vast range of policy interventions by government—poli- substantive negotiations in that sector because of the pro- cies which have usually been developed without regard found economic and political transformation it was un- for their trade effects because they serve other objectives. dergoing. It was therefore agreed to open negotiations on 1 Some countries have up to 15 years to implement tariff cuts on a limited number of specific products. 1 basic telecoms in 1995.
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