For services, rules but few reductions in protection

This is the third of four notes on what the Uruguay Round means for developing countries. The basic principles of the General Agreement on Trade in Services (GATS) are similar to those of the General Agreement on Tariffs and Trade (GATT). Both are based on fundamental goals of national treatment (treating imports and domestic supplies equally inside a national market) and most favored nation treatment (nondiscrimination between exporters). In addition, the GATS shares with the GATT a prohibition on the use of quantitative restrictions. It goes beyond the GATT in including specific commitments on market access. The stakes involved in a comprehensive liberalization of trade in services are very high - potentially the same order of magnitude as the gains from liberalizing merchandise trade. And with services trade growing considerably faster, and the remaining protection in the manufactures sector coming down, the gains from liberalizing services trade can only become more important.