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Developing countries and services in the uruguay round

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  1. UNCTAD: Production and Trade in Services: Policies and their Underlying Factors bearing upon International Service Transactions, document TD/B/941/rev.1, Geneva 1985, p. 11 tf.

  2. IMF: Balance of Payments Manual: Fourth Edition, Washington, D.C., 1977, p. 66.

  3. For further comments regarding the distinction between trade in services, production factor flows and payments, see below.

  4. See J. N. Bhagwati: Splintering and Disembodiment of Services and Developing Nations, in: The World Economy, June 1984, pp. 133–143.

  5. See, for example, UNCTAD: Production and Trade in Services ..., op. cit., for a fuller discussion of the conceptual aspects of services.

  6. The source for these, and more, figures is UNCTAD: Production and Trade in Services..., op. cit., pp. 12, 17, 21.

  7. Figures in this respect can be found in UNCTAD: Services and the Development Process, document TD/B/1008/rev.1, Geneva 1985, p.35 ff.

  8. For a more detailed discussion of this aspect see UNCTAD: Services and the Development Process: further studies, document TD/B/1100, Geneva 1986, Ch. III.

  9. The theoretical consideration here is that of the optimum tariff.

  10. See for example UNCTAD: Services and the Development Process, op. cit, p. 43; and, to a lesser degree, UNCTAD: Services and the Development Process: further studies, op. cit., p. 13 ff.

  11. Examples: A. Sapir, E. Lutz: Trade in Services: Economic Determinants and Development Related Issues, World Bank Staff Working Paper No. 480, Washington, D.C., 1981; A. Sapir: Trade in Investment-related Technological Services, in: World Development, Vol. 14, No. 5, 1986, pp. 605–622.

  12. The problem of labour migration is soon encountered here, however.

  13. UNCTAD gives an example of this: in the context of office automation, part of the clerical process is transferred to a developing country, for example the recording of data on computer tapes or word processing. See UNCTAD: Services and the Development Process, further studies, op. cit., p. 15.

  14. See J. N. Bhagwati, op. cit.

  15. UNCTAD: Services and the Development Process, further studies, op. cit., Ch. I., deals more fully with this aspect.

  16. Ibid, p. 8.

  17. For a more extensive discussion of these and other matters, see L. B. M. Mennes, K. A. Koekkoek: Objectives of and Problems with the Developing Countries in the New GATT Round, paper prepared for the meeting on the Position of the European Community in the New GATT Round, convened by the Spanish Ministry of Finance and the Economy and the Trade Policy Research Centre, Madrid, Spain, 2–4 October 1986; Ad Koekkoek, Jeroen de Leeuw: The Applicability of the GATT to the International Trade in Services: General Considerations and the Interest of Developing Countries, in: Außenwirtschaft, Swiss Review of International Economic Relations, Vol. 42, No. 1, 1987, pp. 65–84.

  18. Ad Koekkoek, Jeroen de Leeuw, op.cit.

  19. Recently the OECD published a document in which GATT principles are applied and adjusted for application to services; see OECD: Elements of a Conceptual Framework for Trade in Services, Paris 1987. For several reasons scant attention is paid In that document to developing countries’ interests.

  20. Much less attention will thus be paid in the discussion which follows to points concerning the applicability of GATT to services in general.

  21. Legitimate considerations according to which protection takes the form of an emergency measure, e.g. for safeguard purposes or to deal with a balance of payments crisis, are passed over here.

  22. An exemption from national treatment is in any case made under present GATT arrangements for the film sector, namely in Art. IV.

  23. This is of particular concern to developing countries where their export position is at stake; see below.

  24. In a recent article (Howard Pack, Larry E. Westphal: Industrial Strategy and Technological Change:Theory versus Reality, in: Journal of Development Economics, Vol. 22, 1986, pp. 87–128) the relevance of the “infant industry” argument to new industries in particular is demonstrated in the light of developments in Korea.

  25. It is very interesting to note that the European Commission also tends to take that position as a point of general, not just developing countries’, concern; see J. Richardson: The European Community, International Trade in Services and the Uruguay Round, paper delivered at the Conference on EC Trade Policy and the GATT Round, organized by the Interdisciplinary Studygroup on European Integration, The Hague, May 22, 1987.

  26. For similar considerations, see again J.Richardson, op. sit.

  27. The developing countries could be offered assistance outside the framework of GATT in establishing their service sectors, for example by stimulating the transfer of technology.

  28. Developing countries’ export interests are also harmed when aid is tied to procurement in the donor country.

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Directorate General for Development Co-operation. The article expresses the author’s personal opinions.

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Koekkoek, A. Developing countries and services in the uruguay round. Intereconomics 22, 234–242 (1987). https://doi.org/10.1007/BF02933534

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