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20 - Waiting for Godot: Subsidy disciplines in services trade

from PART 6 - Unfinished business: Safeguard and subsidy disciplines for services

Published online by Cambridge University Press:  03 September 2009

By
Pietro Poretti
Edited by
Marion Panizzon ,
Nicole Pohl  and
Pierre Sauvé
Marion Panizzon
Affiliation:
Universität Bern, Switzerland
Nicole Pohl
Affiliation:
Universität Bern, Switzerland
Pierre Sauvé
Affiliation:
London School of Economics and Political Science, Universität Bern, Switzerland
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Summary

Introduction

Although it covers subsidies directed towards industrial and agricultural goods, the WTO framework does not yet contain specific disciplines for services subsidies. Article XV of the General Agreement on Trade in Services (GATS) requires Members to develop the multilateral disciplines necessary to avoid the distortive effects subsidies may have on trade in services. However, these negotiations, which have been taking place in the Working Party on GATS Rules (WPGR), have not progressed significantly since they began in 1995. The challenge confronting WTO Members in this area is of considerable complexity. Services and trade in services differ significantly from goods and trade in goods. Their salient characteristics, such as invisibility, non-storability and intangibility, and the existence of multiple modes of supply, have a profound impact on the elaboration of possible disciplines.

The Negotiating mandate of Article XV

Limited negotiations on the possible introduction of disciplines on service subsidies took place during the Uruguay Round. Having been unable to reach an agreement prior to the end of the Round, negotiators agreed to defer the issue of subsidy disciplines in services to the then newborn WTO. The negotiating mandate of GATS Article XV states that

Members recognize that, in certain circumstances, subsidies may have distortive effects on trade in services. Members shall enter into negotiations with a view to developing the necessary multilateral disciplines to avoid such trade-distortive effects. The negotiations shall also address the appropriateness of countervailing procedures. Such negotiations shall recognize the role of subsidies in relation to the development programmes of developing countries and take into account the needs of Members, particularly developing country Members, for flexibility in this area. For the purpose of such negotiations, Members shall exchange information concerning all subsidies related to trade in services that they provide to their domestic service suppliers.

Type
Chapter
Information
GATS and the Regulation of International Trade in Services
World Trade Forum
 , pp. 466 - 488
Publisher: Cambridge University Press
Print publication year: 2008

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