Abstract

Services make a major contribution to the economy and employment in all countries, whatever their stage of development. Yet they contribute a significantly smaller share of international trade than goods. Part of the reason for this is that only modest progress has so far been made to guarantee open markets for trade in services. This chapter sets out the importance of services in international trade, and assesses the gains that can be made from liberalization. It describes the structure and impact of the key international agreement on trade in services – the General Agreement on Trade in Services (GATS). It explains how far governments have committed themselves, both multilaterally in the World Trade Organization (WTO) and through preferential agreements, to keeping their markets open to foreign suppliers of services.