Abstract

Summary Advances in information and communication technology and especially the Internet have increasingly facilitated the provision of services across national borders. To a growing extent, foreign trade in services is also indispensable to the proper functioning of international value-added chains in both the goods and the services sector. At the same time, while the internationalisation in services has been proceeding even faster than that in goods, its degree is still relatively low, which indicates a high potential for further growth. The removal of the many barriers that still obstruct international services trade would produce substantial and widely spread welfare gains. Due to the intermediary function of services, liberalisation in this area would also boost the international competitiveness of goods-producing industries. This mostly holds for manufacturing in developing countries. On the other hand, the argument that the outsourcing or offshoring of services might involve major employment losses in industrialised countries appears to be ill-founded. The liberalisation of trade in services could be greatly enhanced through a shift in multilateral negotiating techniques: replacing the positive-list approach, which currently prevails, through a procedure primarily relying on negative lists with closely specified exceptions could contain the negative influence of vested interests in this trade policy field and thus aid the common welfare.

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