sectors that are not scheduled). Most members have not complied with this notification requirement. Thus, in the last 10 years Albania has notified some 120 measures under Art. III:3, as compared to just a handful by Canada, the EU and the US combined.

Until very recently it was therefore not possible to assess the extent to which commitments implied a locking in of applied policies. A new database on services trade barriers compiled at the World Bank now allows such an assessment to be made. The database reveals that applied policies of 102 surveyed countries in a number of sectors are much more restrictive than in others, with mode 4 being the least open.<sup>2</sup> Borchert, Gootiiz and Mattoo (2010) build on earlier work by Gootiiz and Mattoo (2009) and use the database to compare applied policies and the GATS commitments of the 93 WTO Members surveyed.<sup>3</sup> They conclude that there is a very significant gap between applied and “bound” policies (the commitments) because most services liberalization around the world has been undertaken unilaterally. The policy commitments (bindings) made in the GATS during the Uruguay Round by the 93 WTO members surveyed are on average 2.3 times more restrictive than currently applied policies – i.e., countries could more than double their average levels of restrictiveness without violating their commitments.

Figure 1 is a scatter diagram using this database where the location of each country reflects the overall restrictiveness of its services trade policies and its per capita income. A number of patterns can be seen. High‐income countries are clustered together at the bottom‐right, showing that they are quite open overall. There is much more variation in the restrictiveness of services policies for low‐income countries. Some of the poorest countries, like Ecuador, Ghana, Nigeria, Senegal, and Mongolia are remarkably open, while some of the most restrictive policies today are visible in the fast growing economies of Asia, including China, India, Indonesia, Malaysia, the Philippines and Thailand, as well as in the Middle East, including Egypt, Saudi Arabia and Tunisia.

Figure 2 uses the same data but focuses on average levels of restrictiveness by sector and geographic region. It can be seen that there is a lot of variation across sectors, with some being subject to high discriminatory barriers in all regions (transport and professional services) whereas other sectors are much more restricted in some countries than others. Financial services and retail distribution tend to be much more open to foreign competition in high income countries than in many developing countries.

> 2 The database covers five sectors: financial services (banking and insurance), telecommunications, retail distribution, transportation, and professional services. In each sector, the survey covers the most relevant modes of supplying that service: cross border trade in services (mode 1) in financial, transportation and professional services; commercial presence or FDI (mode 3) in each services sector; and the presence of service supplying individuals (mode 4) in professional services. Results of the survey are summarized in an index of services trade restrictiveness (STRI). For each sector and mode of supply the openness of policy towards foreign suppliers is mapped on a 5‐point scale ranging from 0 (for no restrictions) to 1 (highly restricted), with three intermediate levels of restrictiveness (0.25. 0.50 and 0.75). Sector results are aggregated across modes of supply using weights that reflect judgments of the relative importance of the different modes for a sector. For example, mode 4 (temporary movement of suppliers) is important for professional services, but not for telecommunication, where mode 3 is the dominant mode of contesting a market. STRIs are aggregated using sector GDP shares as weights.

> 3 Nine of the countries in the database are not WTO members.

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