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Ed Black Contributor

Tech association CEO writing on innovation and Internet freedom full bio →

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A Real Jobs Plan For The 21st Century



What are services?








What are the obstacles to liberalizing trade in services?

If focusing on services liberalization is a win-win for all involved, what stands in the way of achieving this?  First of all, liberalizing in service sectors is more difficult.  As opposed to lowering tariffs on goods, which is relatively easy in practice once the political will exists, lowering barriers to trade in services requires hard work.  Regulations, certifications and licensing need to be harmonized.  Also, protectionist measures can be more easily disguised.  A country can claim to be holding up its own high-standards in a particular industry by not allowing practitioners from other countries into the market and countries like China can cite national security and public morals concerns to block foreign web services and platforms but not domestic ones.

In the international arena, some strides have been made but much work still needs to be done. The General Agreement of Trade in Services (GATS) is good start but it has some major defects. The most glaring problem is that the GATS is a “positive list” treaty where signatory countries have to commit to which sectors they want to liberalize, as opposed to under its “goods” cousin, the GATT, where countries have to explicitly say which goods they are not including.

The difference might sound mundane and procedural, but the consequences are real.  In the services world, each new advancement in technology has to be added to the list of commitments if it is to enjoy the protection of the GATS.  This especially impacts cutting edge industries, like the Internet and technology sectors, where new products and services are being created at a much faster speed than the wheels of international economic diplomacy turn.

What are the opportunities going forward?

Currently there is an effort underway in Geneva to create a GATS+ agreement that takes unilateral commitments made by negotiating parties in their bilateral FTAs related to electronic commerce and “internationalizes” them across all countries willing to participate. This process is just one part of a new focus on electronic commerce that WTO member countries have committed themselves to.  Significant strides can also be made in the plurilateral Trans-Pacific Partnership (TPP) talks, which include a number of highly advanced Pacific Rim economies, including the United States, Australia and Singapore.

Progress also needs to be made on the Agreement on Government Procurement (GPA) as a global boom in infrastructure investment, largely by developing country governments, could generate as much as $40 trillion in spending over the next two decades.   It is precisely these major projects that need the assistance of the world-class expertise available in the U.S. business services sectors.

Finally, the Internet must take center stage in modern trade agreements.  As I have argued in the past, it is time for a 21st Century trade agenda that focuses much more attention on the Internet.  More than any other medium, the Internet enables the worldwide exchange of “services” to an extent never possible before. It does this in a way that is inherently “borderless” and that gives clever people in any country in the world the opportunity to export their ideas and services – provided they can get a good Internet connection.

If the international trade regime is to keep pace with the modern world, bits and bytes must be afforded the same protection as beef and bolts in modern trade negotiations.

Unfortunately a cloud looms over the services sector as more nations move to place restrictions on the free flow of information and online commerce.  If service providers and web platforms are made liable for the actions of all of their users or countries are allowed to indiscriminately block access to companies providing goods and services over the Internet, the gains made on international trade in the 20th century will soon begin to erode as the most dynamic platform for trade in services in human history is reined in.


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