Analytical Note, June 2004

Analysis of Actual Liberalisation versus GATS Commitments of Quad Members: Mode 4 and Health Services.

This note is the first of a series assessing the actual or current level of trade liberalisation in select modes and sectors of the Quad members (Canada, European Communities, Japan and the United States) compared with their General Agreement on Trade in Services (GATS) commitments in the respective areas.

This first note is focused on the movement of natural persons (or mode 4) and health services. The goal of this exercise was to assess whether GATS commitments made by a few of the most developed service economies, i.e. Quad members, can be considered “weak” and below actual levels of liberalisation.

This note may prove to be timely in light of the recent calls be developed countries for initial and improved offers by developing countries, as it shows that GATS commitments and initial offers of the Quad members in these key areas of interest to developing countries and least developedcountries (LDCs) have been cautious and bound below actual levels of liberalisation.

From this assessment, developing countries and LDCs can take away three main messages. Firstly, calls by developed countries for deep liberalisation commitments or binding of actual liberalisation should be taken with caution – since developed countries themselves have been cautious about committing at the levels requested. Secondly, in the same way that the Quad members are cautious and selective in their commitments under GATS, developing and least developed countries are arguably more justified in their decisions to liberalise under GATS with similar or greater caution and careful selection. Thirdly, there is room for improvement within the GATS commitments and initial offers of the Quad members – developing countries and LDCs can utilise this fact as a condition or negotiating basis for furthering market access negotiations.

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