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  • Article (1)

Tough times are expected in the year(s) to come, but focusing entirely on public and private budget cuts is not a politically sustainable policy. On top of its direct impoverishing impact, austerity has an indirect impact, which is very corrosive in the long run for consumers. It induces producers of goods and services to retreat to their home markets, reducing the level of competition in the markets they left behind. There is thus an urgent need to build a pro-growth agenda, for which the services sector is the best candidate, since it accounts for 60-70 percent of the G20 GDP. Such an agenda means reforms: in order to take the right decisions when redesigning their strategies, service providers need clarity and predictability on how their markets will operate. History shows that introducing pro-growth domestic reforms is hugely bolstered by opening — or reopening — domestic markets to foreign competitors. This is why a “sleeping” Doha is not a reason for not starting negotiations now on how to improve market access in services. This paper argues that the two largest world economies, the United States and the EU, should launch bilateral negotiations on services. The expected gains for consumers and the opportunities for service providers are huge in both sides of the Atlantic because their services sectors are likewise huge and because the protection still prevailing in many services areas is still high.

Now the Doha Round is in its tenth year, it is still far from clear whether a deal will be concluded this year. Neither is clear what are the reasons of the current deadlock. Deep division also remain on how to conclude a possible Doha deal. Apart from this negotiation stalemate, what do trade experts think about Doha? This policy brief analyses these questions using mainly data from the CUTS forum debate on the Doha Round among trade experts and academics. The results show that also among experts huge divisions remain on these issues.

Services providers are busy re-designing their strategies to cope with the global economic crisis. In order to take the right decisions, they need clarity and predictability on future market access in services. Meanwhile, consumers impoverished by the current crisis would greatly benefit from more open markets. Starting negotiations now on how to improve market access in services would deliver predictability to firms and economic gains to consumers, and would be facilitated by the fact that the last months have witnessed growth or resilience in a substantial number of services. That said, how could this be done when negotiating market access in services is so notoriously difficult?