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Bilateralism in services trade: is there fire behind the (BIT-)smoke?

Author

Listed:
  • Adlung, Rudolf
  • Molinuevo, Martin
Abstract
Far less attention is given to the even more rapid proliferation of bilateral investment treaties (BITs) and their overlap with obligations assumed by WTO Members under the General Agreement on Trade in Services (GATS). About 60 per cent of world foreign investment stocks are in services and, thus, covered by mode 3 (commercial presence) of the GATS. A closer look reveals that BITs generally apply across a far wider range of sectors, in particular in the case of LDCs and developing countries, than those scheduled under the GATS. Furthermore, a number of obligations enshrined in BITs go beyond their potential counterparts under the GATS. At the same time, since most WTO Members have not listed relevant exemptions from the Most-Favoured-Nation (MFN) clause of the Agreement, their BIT obligations are to be applied on an MFN basis. While this extension may not cause problems in many cases, given generally liberal investment regimes and the focus of most treaties on protecting rather than liberalizing access, inconsistencies remain between the two frameworks. Based on an assessment of relevant provisions, this article discusses options on how WTO Members could proceed.

Suggested Citation

  • Adlung, Rudolf & Molinuevo, Martin, 2008. "Bilateralism in services trade: is there fire behind the (BIT-)smoke?," WTO Staff Working Papers ERSD-2008-01, World Trade Organization (WTO), Economic Research and Statistics Division.
    • Handle: RePEc:zbw:wtowps:ersd200801
    DOI: 10.30875/135bcd65-en
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    References listed on IDEAS

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    1. repec:hal:spmain:info:hdl:2441/8301 is not listed on IDEAS
    2. Rudolf Adlung, 2006. "Services Negotiations in the Doha Round: Lost in Flexibility?," Journal of International Economic Law, Oxford University Press, vol. 9(4), pages 865-893, December.
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    9. Roy, Martin & Marchetti, Juan & Lim, Hoe, 2007. "Services liberalization in the new generation of preferential trade agreements (PTAs): how much further than the GATS?," World Trade Review, Cambridge University Press, vol. 6(2), pages 155-192, July.
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    Cited by:

    1. Adlung, Rudolf, 2009. "Services liberalization from a WTO/GATS perspective: In search of volunteers," WTO Staff Working Papers ERSD-2009-05, World Trade Organization (WTO), Economic Research and Statistics Division.
    2. Timilsina, Govinda R. & Shrestha, Ashish, 2008. "The growth of transport cector CO2 emissions and underlying factors in Latin America and the Caribbean," Policy Research Working Paper Series 4734, The World Bank.
    3. Axel Berger & Matthias Busse & Peter Nunnenkamp & Martin Roy, 2013. "Do trade and investment agreements lead to more FDI? Accounting for key provisions inside the black box," International Economics and Economic Policy, Springer, vol. 10(2), pages 247-275, June.
    4. Arvind Subramanian & Aaditya Mattoo, 2008. "Multilateralism Beyond Doha," Working Papers 153, Center for Global Development.
    5. Honeck, Dale, 2008. "LDC Poverty Alleviation and the Doha Development Agenda: is tourism being neglected?," WTO Staff Working Papers ERSD-2008-03, World Trade Organization (WTO), Economic Research and Statistics Division.
    6. Adlung, Rudolf, 2009. "Trade in healthcare and health insurance services: The GATS as a supporting actor (?)," WTO Staff Working Papers ERSD-2009-15, World Trade Organization (WTO), Economic Research and Statistics Division.
    7. Mattoo, Aaditya, 2011. "Services Trade Liberalization and Regulatory Reform: Re-invigorating International Cooperation," CEPR Discussion Papers 8181, C.E.P.R. Discussion Papers.
    8. Rammal, Hussain G. & Rose, Elizabeth L. & Ghauri, Pervez N. & Ørberg Jensen, Peter D. & Kipping, Matthias & Petersen, Bent & Scerri, Moira, 2022. "Economic nationalism and internationalization of services: Review and research agenda," Journal of World Business, Elsevier, vol. 57(3).
    9. repec:ilo:ilowps:471290 is not listed on IDEAS
    10. Boie, Bertram., 2012. "Labour related provisions in international investment agreements," ILO Working Papers 994712903402676, International Labour Organization.
    11. Adlung, Rudolf & Morrison, Peter & Roy, Martin & Zhang, Weiwei, 2011. "Fog in GATS commitments: Boon or bane?," WTO Staff Working Papers ERSD-2011-04, World Trade Organization (WTO), Economic Research and Statistics Division.

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    More about this item

    Keywords

    Trade in services; GATS; investment treaties; bilateralism;
    All these keywords.

    JEL classification:

    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
    • F15 - International Economics - - Trade - - - Economic Integration
    • F21 - International Economics - - International Factor Movements and International Business - - - International Investment; Long-Term Capital Movements
    • K33 - Law and Economics - - Other Substantive Areas of Law - - - International Law
    • L80 - Industrial Organization - - Industry Studies: Services - - - General

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