The negotiation of market access commitments and rules for services trade faces a number of daunting challenges that are an inherent consequence of the fact that many barriers to services trade are embedded in domestic regulation. The result, so far, has been that international services commitments are relatively weak. The challenges to negotiating stronger commitments include convincing private sector interests that services commitments will benefit them and the difficulty of constructively engaging domestic regulators in negotiations, especially where they are associated with subordinate levels of government.
To the extent that negotiating countries have close proximity in terms of geography, trade and investment relationships, common culture, language, and legal traditions, as well as similar regulatory goals and approaches, these challenges may be lessened. These factors are present to varying degrees among developed countries. In the current Canada-Europe negotiations, for example, the presence of significant export interests, long experience with trade negotiations, well-developed regulatory schemes, and a history of regulatory cooperation all support a relatively robust outcome in services commitments and rules. The role played by subordinate levels of government and regulators, however, as well as differences in approaches to the architecture of trade agreements will be challenges for the negotiators.Legal Issues of Economic Integration