Services in a development round : three goals and three proposals

The benefits of services trade reform are huge but services negotiations in the World Trade Organization (WTO) are making little progress. A proximate cause is the current negotiating process, based on an inertial request-and-offer approach rather than a set of goals that would give direction and momentum to the negotiations. The paper suggests that WTO members should consider: (1) locking in the current openness of cross-border trade for a wide range of services; (2) eliminating barriers to foreign investment either immediately or in a phased manner where regulatory inadequacies need to be remedied; and (3) allowing greater freedom of international movement at least for intra-corporate transferees and for service providers to fulfill specific services contracts. A deeper problem is that WTO members have sought to negotiate market access in services without adequately addressing concerns that the General Agreement on Trade in Services (GATS) commitments limit regulatory freedom unduly and unpredictably, that regulatory institutions in many countries are too weak to cope with liberalized markets, and that there is no provision for the regulatory cooperation that is necessary for successful liberalization, particularly of temporary labor mobility. Three types of actions are needed: (1) at the current stage of its development, theGATS must focus primarily on disciplines for measures that discriminate against foreign services and providers, rather than on politically sensitive and legally complex rules for nondiscriminatory measures; (2) a credible assistance mechanism must be established to help developing countries make the regulatory improvements needed for successful liberalization; and (3) where necessary, WTO members should make access commitments on labor mobility conditional on the fulfillment of specific conditions by source countries-to screen services providers, accept and facilitate their return, and combat illegal migration.Trade and Services,TF054105-DONOR FUNDED OPERATION ADMINISTRATION FEE INCOME AND EXPENSE ACCOUNT,Trade and Regional Integration,Governance Indicators,ICT Policy and Strategies

On the power of conditional independence testing under model-X

For testing conditional independence (CI) of a response Y and a predictor X given covariates Z, the recently introduced model-X (MX) framework has been the subject of active methodological research, especially in the context of MX knockoffs and their successful application to genome-wide association studies. In this paper, we study the power of MX CI tests, yielding quantitative explanations for empirically observed phenomena and novel insights to guide the design of MX methodology. We show that any valid MX CI test must also be valid conditionally on Y and Z; this conditioning allows us to reformulate the problem as testing a point null hypothesis involving the conditional distribution of X. The Neyman-Pearson lemma then implies that the conditional randomization test (CRT) based on a likelihood statistic is the most powerful MX CI test against a point alternative. We also obtain a related optimality result for MX knockoffs. Switching to an asymptotic framework with arbitrarily growing covariate dimension, we derive an expression for the limiting power of the CRT against local semiparametric alternatives in terms of the prediction error of the machine learning algorithm on which its test statistic is based. Finally, we exhibit a resampling-free test with uniform asymptotic Type-I error control under the assumption that only the first two moments of X given Z are known, a significant relaxation of the MX assumption

China's accession to the World Trade Organization - The services dimension

China's General Agreement on Trade in Services (GATS) commitments represent the most radical services reform program negotiated in the World Trade Organization. China has promised to eliminate over the next few years most restrictions on foreign entry and ownership, as well as most forms of discrimination against foreign firms. These changes are in themselves desirable. However, realizing the gains from, and perhaps even the sustainability of, liberalization will require the implementation of complementary regulatory reform and the appropriate sequencing of reforms. Three issues, in particular, merit attention: 1) Initial restrictions on the geographical scope of services liberalization could encourage the further agglomeration of economic activity in certain regions-to an extent that is unlikely to be reversed completely by subsequent countrywide liberalization. 2) Restrictions on foreign ownership (temporary in most sectors but more durable in telecommunications and life insurance) may dampen the incentives of foreign investors to improve firm performance. 2) Improved prudential regulation and measures to deal with the large burden of non-performing loans on state banks are necessary to deliver the benefits of liberalization in financial services. And in basic telecommunications and other network-based services, meaningful liberalization will be difficult to achieve without strengthened pro-competitive regulation.Payment Systems&Infrastructure,Public Sector Economics&Finance,ICT Policy and Strategies,Banks&Banking Reform,Environmental Economics&Policies,Trade and Services,ICT Policy and Strategies,Banks&Banking Reform,Public Sector Economics&Finance,Health Economics&Finance

Shaping future GATS rules for trade in services

The new round of negotiations has begun with a mechanical sense of"since we said we would, therefore we must,"says the author. To make the General Agreement on Trade in Services (GATS) more effective ay liberalization, the author suggests improving the agreement's rules, countries'specific commitments, and the negotiating methodology: 1) Wasteful regulations, and entry restrictions pervade trade in services. Unlike the GATT, the GATS has created no hierarchy of instruments of protection. It may be possible to create a legal presumption in favor of instruments (such as fiscal measures) that provide protection more efficiently. 2) Many countries have taken advantage of the GATS to create a more secure trading environment, by making legally binding commitments to market access. The credibility of reform would increase with wider commitments to maintain current levels of openness, or to increase access in the future. 3) Multilateral rules on domestic regulations can help promote, and consolidate domestic regulatory reform, even when the rules are designed primarily to prevent the erosion of market access for foreign providers. The pro-competitive principles developed for basic communications, could be extended to other network-based services sectors, such as transport (terminals and infrastructure), and energy services (distribution networks). The"necessity test"instituted for accounting services, could be applied to instruments in other sectors (so that doctors judged competent in one jurisdiction, wouldn't have to be retrained for another, for example). 4) Anticompetitive practices that fall outside the jurisdiction of national competition law, may be important in such sectors as maritime, air transport, and communications services. Strengthened multilateral rules are needed to reassure small countries with weak enforcement capacity, that the gains from liberalization will not be appropriated by international cartels. 5) Explicit departures from the most-favored-nation rule matter most in such sectors as maritime transport, audiovisual services, and air transport services - which have been excluded from key GATS disciplines. Implicit discrimination can be prevented by developing rules to ensure the non-discriminatory allocation of quotas, and maintaining the desirable openness of the GATS provision on mutual recognition agreements. 6) Reciprocity must play a greater role in negotiations, if the GATS is to advance liberalization beyond measures taken independently.Environmental Economics&Policies,Economic Theory&Research,Decentralization,ICT Policy and Strategies,Payment Systems&Infrastructure,Trade and Services,Environmental Economics&Policies,ICT Policy and Strategies,TF054105-DONOR FUNDED OPERATION ADMINISTRATION FEE INCOME AND EXPENSE ACCOUNT,Economic Theory&Research