Coherence and Divergence in Agreements on Trade in Services - A Drama in Three Acts

Abstract

This article reviews instances of coherence and divergence in trade in services agreements through recourse to a series of events that led to the creation of the General Agreement on Trade in Services (GATS) and its evolution via developments at the preferential level. It traces developments in this area in three stages. It begins with an analysis of the background that explains the rise of services integration as a stand-alone topic in the agenda of multilateral trade negotiations. The focus then shifts to the genesis of the GATS; the analysis of the dynamics that evolved in the wake of the Uruguay Round; the identification of the birth defects of the GATS; and the instances of embedded divergence. Finally, the article discusses how preferential trade agreements (PTAs) undermine coherence but, on an optimistic note, also points to potential situations that can act as remedies for such fragmentation.

JEL Classification: F02, F13, F15, F51, F53, F55, F63, K33, L80, L88, O19