Revisiting Regional Trade Agreements and Their Impact on Services Trade

by Mario Marconini

by Mario Marconini

EPAs and Regionalism Series • Issue Paper 4

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This issue paper, titled “Revisiting Regional Trade Agreements and Their Impact on Services Trade” written by Mr. Mario Marconini, is a contribution to that process. The paper exhaustively reviews services disciplines included in several Free Trade Agreements (FTA). The aim of the paper is to enable stakeholders to understand how rules and commitments regarding trade in services have been introduced in FTAs, and how those policies might impact sustainable development in developing countries.
The paper starts by examining the main models used for agreements on services disciplines, namely the approaches deployed by the North American Free Trade Agreements (NAFTA), the WTO General Agreement on Trade in Services (GATS) and the EU in form of the Economic Partnership Agreements (EPAs). Unlike already existing research, this analysis goes beyond a discussion of the different mechanisms for liberalization (i.e. the negative and positive approach) thus introducing new groundbreaking research on services provisions in FTAs.
With reference to the 3 models for services disciplines, the paper continues with an in depth analysis of different provisions contained in the services chapters. Among others, the analysis addresses scope and coverage, Non-discrimination, market access, domestic regulation, mutual recognition and cooperation.
In the light of the great importance of services trade for developing countries, concluding chapters complement the technical analysis with a discussion on the interaction of services disciplines and development objectives including the crucial aspects of free movement of capital and labour. The main conclusion of the paper is that the incorporation of services disciplines in FTAs has thus far delivered little either in terms of liberalization or in terms of development. Rather services agreements tend to bind the status quo. Regional agreements have also fallen in short of achieving progress in matters that were supposedly better tailored for preferential agreements and have not been included in the multilateral trading regime - such as mutual recognition. Coequally, the co-habitation of FTAs covering services and the GATS seems to have been accepted by the international trade community. In any case, the difficulty for developing countries is less the choice of forum than the identification of their specific interest in services negotiations. The fact that some agreements may include development provisions is no guarantee that the individual country interests are adequately contemplated.
We hope that this paper, together with the others in this series on preferential trade agreements, will facilitate the task of identifying domestic interests and suitable legal framework for achieving those, while helping to promote a better understanding of the workings of RTAs and how the deals interact with the multilateral trading system and development objectives.

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