32 29. The major exception is Taiwan. The following developing countries had made an initial offer as of end 1992 (in chronological order): Hong Kong, Republic of Korea, Indonesia, Singapore, Colombia, Mexico, Turkey, Chile, Brazil, Yugoslavia, Malaysia, Venezuela, China, Argentina, Costa Rica, Uruguay, Peru, Philippires, Thailand, Egypt, Morocco, El Salvador, Guatemala, Honduras, Nicaragua, Cuba, India, Bolivia, Sri Lanka, Jamaica, Nigeria, Senegal, Paraguay, Cote d'Ivoire, Israel, Cameroon, Zimbabwe, Ghana, Tunisia, and Trinidad and Tobago. In March 1993 the Netherlands presented offers on behalf of Aruba and the Netherlands Antilles. The following quantitative analysis of the initial offers excludes that of Yugoslavia for obvious reasons. Confidentiality constraints prevent a discussion of individual country offers and their sectoral coverage.

30. The major categories are business services (including professional and computer-related services), communication services (including postal, telecom and audiovisual services), construction, distribution services, education, environmental services, financial services, health and related services, tourism, recreation, and transportation. United Nations and World Bank (1993) reproduce the CATS classification list.

31. This group includes Brazil, China, India, the Republic of Korea, and Mexico.

32. If an adjustment is made for sector size, the magnitude o; the coverage ratios will change, leading to an increase for countries that offer relatively few sectors of significant size, and a decrease for count,ies that offer many sectors most of which are relatively insignificant.

33. See United Nations and World Bank (1993) for a list of the weights used. These are based on data obtained for _Cxnsda,_ France and the United States. The more aggregated list has 125 service sub-sectors. Note that using data from industrialized countries on sectoral shares is likely to bias these weighted coverage ratios, unless all sectors are covered. The reason is that relative shares will on average tend to differ from those ox industrialized countries. Thus, transportation and distribution tends to be relatively more important for developing countries, and business and financial services less important.

34. World Bank, World Development Report 1990 GDP data broken down by sector were used for the countryspecific service sector weights.

35. As all developing countries together account for some 15 percent of the global output of services (excluding Eastern European countries and the republics of the former USSR), this represents at most ten percent of the global market (at most because this does not take into account any restrictions that are maintained with respect to the sectors involved). However, it can be argued that developing country markets are likely to expand faster than those of industrialized nations.

36. Indeed, the only representative many countries in this category may bave in Europe is likely to be in Brussels and/or Paris.

37. Large countries are the only ones where the pursuit of such a strategy makes any sense at all, as only if access is gained to a large market might the payoff ever outweigh the costs of foregoing liberalization. But these countries are precisely those where the strategy has the least chance of succeeding.

38. A similar argument applies to the option of pursuing unilateral domestic liberalization efforts but not binding these multilaterally. While this entails much lower direct costs - the primary one being that trading partners will perhaps offer less liberalization of their markets - the indirect costs may be substantial. The main advantage of binding is that it signals the 'irreversibility' of liberalization to domestic agents. Once bound, costs will be incurred if the government attempts to re-impose discriminatory measures.

39. The EC accounts for about 40 percent of world trade in services - measured on a balance of payments basis - while the U.S. accounts for approximately 13 percent. If intra-EC trade flows are excluded, the figures become 29 percent and 17 percent, respectively.