WORLD TRADE
ORGANIZATIONTN/S/W/3
10 June 2002
(02-3211)
Council for Trade in Services
Special SessionOriginal:  English
COMMUNICATION FROM CUBA, DOMINICAN REPUBLIC, KENYA, NIGERIA,
PAKISTAN, SENEGAL AND ZAMBIA
Assessment of Trade in Services
The following communication has been received from the above-mentioned delegations with
the request that it be circulated to the Members of the Council for Trade in Services.
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Developing countries have been expressing their interests and intents relating to the conduct
and results of assessment of trade in services.1  This communication builds on these previous
submissions and makes an attempt to identify some preliminary results that can be inferred from theassessment of trade in services as it has been conducted to date.
Developing countries recognise the potential benefits of liberalization in trade in services for
their economies.  However, gains from services liberalization have often been nullified by such
factors as limited access in modes and sectors of export interest to them and/or supply-side
constraints.  Therefore, though they recognise the contribution of services to GDP and employment in
their economies and by extension the potential of services exports for economic development,
developing countries consider that the assessment of trade in services, as mandated in the GATS,should be conducted in overall terms and on a sectoral basis with reference to the objectives of the
agreement including those set out in paragraph 1 of Article IV in order for them to participate in a
commercially meaningful manner in the services negotiations.
Available data, though not adequate and complete in all respects, does allow the drawing of
inferences.  Much discussion has been devoted to the lack of internationally comparable statistics onservices.  However, it is also important to re-emphasise that a qualitative assessment is likewise
possible and necessary (especially as several of the goals of Article IV are of a qualitative nature).
Lack of comparable statistics does not prevent assessment.  What can be done with the available
information should not be underestimated.  In that context, the contribution of Argentina to
assessment is a good example.
2  Document S/CSS/W/44 successfully analysed the available figures
with a view to identify those factors and trends, which are relevant for the current negotiations, in
particular from a developing country perspective.
                                                     
1 For example the Communication from Cuba, Senegal, Tanzania, Uganda, Zimbabwe and Zambia,
Assessment of Trade in Services, S/CSS/W/132, 6 December 2001 and the Communication from Cuba,Dominican Republic, Haiti, India, Kenya, Pakistan, Peru, Uganda, Venezuela and Zimbabwe, Assessment ofTrade in Services, S/CSS/W/114, 9 October 2001.
2 Assessment of Trade in Services:  the Participation of Developing Countries, S/CSS/W/44,
29 January 2001.TN/S/W/3
Page 2
It is believed that the following results of assessment, based on available research and
analysis, will go a long way in assisting developing countries formulate appropriate "requests" and
determine the feasibility of "offers" to be made, notwithstanding the fact that assessment of trade in
services remains an ongoing activity of the Council for Trade in Services.
Results of the Assessment of Liberalization of Trade in Services
1. The fundamental objective of the GATS Preamble – to achieve an overall balance of rights
and obligations for all WTO Members – has not been attained .  Developing countries have made what
for them represented substantial commitments under GATS with respect to many service industries
but have not received concessions of any meaningful economic value, including under the movement
of natural persons mode of supply.3  This imbalance was further accentuated with the major
commitments that some developing countries undertook autonomously including under structural
adjustment programmes4 and as a result of the negotiations on financial and telecommunication
services, without receiving reciprocal benefits.
2. Developing countries' share of world services exports has only increased by a small
percentage . In the period from the adoption of the GATS to 1999, the increase had only been of
6 per cent, mostly due to the export competitiveness of Asian developing countries. On the other
hand, developed countries account for three quarters of world exports of services and represent mostof the 20 top exporters in different services sectors.
5  Moreover, many service sectors are
characterised by a high degree of concentration. Service providers from developing countries (most of
whom are SMEs) face competition from larger service multinationals.6  Thus, services trade
liberalisation under the GATS has only in part le d to increasing developing countries' services
exports, in particularly when compared to developed countries service exports.  Most trade in services
still takes place between rich countries.7
3. For some developing countries, growth in impor ts has been larger than growth in exports,
and many of them face a deficit in trade in services in most sectors.8  Thus, the growth in exports of
services under the GATS has been more than offset by the growth in service imports.
4. The specific objectives of GATS Article IV have not been achieved.  Developing countries face
a number of critical barriers to their services exports – ranging from prohibition of access to services
markets (e.g. nationality, residency or visa requirements);  price-based measures (e.g. entry and exit
taxes, visa fees, tariffs on goods in which services are embodied);  subsidies granted in developed
countries (including the high-technology sectors);  technical standards and licensing requirements;
and lack of transparency in government measures.  Moreover, the access to information channels and
                                                     
3 UNCTAD, 1999, Assessment of Trade in Services of Developing Countries: Summary of Findings,
UNCTAD/ITCD/TSB/7.
4 UNCTAD, 1999, Assessment of Trade in Services of Developing Countries: Summary of Findings,
UNCTAD/ITCD/TSB/7, paragraph 8 and UNCTAD, 1998, Scope for Expanding Exports of Developing
Countries in Specific Services Sectors Through all GATS Modes of Supply, Taking into Account theirInterrelationship, the Role of Information Technology and of New Business Practices, TD/B/COM.1/21.
5 UNCTAD, 1999, Assessment of Trade in Services of Developing Countries:  Summary of Findings,
UNCTAD/ITCD/TSB/7 and UNCTAD, 2000, Positive Agenda and Future Trade Negotiations, New York and
Geneva, United Nations.
6 UNCTAD, 1999, Assessment of Trade in Services of Developing Countries: Summary of Findings,
UNCTAD/ITCD/TSB/7.
7 World Bank, 2001, "Trade in Services:  Using Openness to Grow" in Global Economic Prospects.
8 UNCTAD, 1999, Assessment of Trade in Services of Developing Countries: Summary of Findings,
UNCTAD/ITCD/TSB/7.TN/S/W/3
Page 3
distribution networks are subject to discriminatory processes and have restricted competition.9 Thus,
services trade liberalization under the GATS does not either per se  and automatically bring about
benefits for developing country economies, their services providers and consumers or lead to the
achievement of objectives under Article IV of GATS.
5. Benefit from privatisation and liberalisation is not automatic  without the appropriate
preconditions10 and policies to encourage and enhance technological capacity and diffusion as well as
complementary policies to help improve access to essential services for the poor.
6. Liberalisation of services entails adjustment costs .11  Thus, without adequate flanking policies
services trade liberalisation under the GATS might not achieve its overall goal, inscribed in its
Preamble, to promote the economic growth of all trading partners and the development of developing
countries. Developing countries' need to give priority attention to the provision of universal access
with regard to essential services and public goods can only be met if they are provided with theinstitutional and capacity building support to maintain adequate flanking policies.
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9 Ibidem, paragraph 18
10 UNCTAD, 2000, Positive Agenda and Future Trade Negotiations, New York and Geneva, United
Nations and World Bank, 2001, "Trade in Services: Using Openness to Grow" in Global Economic Prospects.
11 World Bank, 2001, "Trade in Services: Using Openness to Grow" in Global Economic Prospects.