Recent Developments on Disciplines on Domestic Regulations Affecting Trade in Services: Convergence or Divergence?

Abstract

The paper examines recent developments on disciplines on domestic regulations affecting trade in services at regional, plurilateral and multilateral level. It identifies a significant degree of convergence between the disciplines adopted at regional level with those that are about to be adopted at plurilateral level (DRP2019). At the same time, discrepancies over the extent and eligibility for special and differential treatment for developing countries are the main obstacle to reach a multilateral agreement on this matter. However, the paper argues that it is unlikely that regional or plurilateral disciplines may generate trade diversion. First, in most cases the disciplines are phrased in soft terms, giving countries plenty of flexibility to decide how and when to comply with them. Second, those sponsoring the plurilateral negotiations account for fifty one per cent of world exports of commercial services (seventy per cent including the U.S.) and have pledged to incorporate the results of the negotiations into their GATS schedules as additional commitments under Article XVIII of the Agreement (and thus extending the benefits of the disciplines on a Most Favoured Nation basis to WTO Members that have not participated in the negotiations). Finally, even those few PTA disciplines that go beyond those included in the plurilateral reference paper are, for practical reasons, applied de facto, on an MFN basis.