SINGAPORE AND TRADE IN SERVICES IN THE URUGUAY ROUND

Abstract

Largely as a result of the initiative of the US, trade in services has been given a prominent place on the international policy agenda. This was demonstrated in September 1986 at the ministerial meeting of member countries of GATT, known as the Uruguay Round held at Purta del Este. The principal American objectives to include services in the new round of multilated trade negotiations were two-fold. Firstly to achieve the liberalisation of national impediments to internationally traded services. Secondly to devise new multilateral rules to govern international transactions in the service sector of the world economy. There was widespread sceptism and resistance among both developed and developing countries. On one side service centres like Hong Kong and Singapore had a keen interest in the future of internationally traded services. On the other side countries like Brazil and India see the liberatlization of traded on services as a threat to their plans for economic development. Manufacturing has been considered the prime mover of the economy in Singapore for the past 25 years. The Economic Subcommittee in 1986 however has identified traded services as another pillar of growth. Singapore has a healthy balance of services between 1976 to 1986 with services contributing 45% of foreign exchanges in 1986. An extract on "Survival means being plugged into the world" from the Straits Times highlights the growing importance of traded services for overall economic development and future trade policy. "Singapore should become a major exporter of services. Services account for an increasing share of our GDP and our service exports have been growing as quickly as world trade in services". Given the importance of traded services in the economy, its role in Singapore development strategy, the question of how Singapore should negotiate on internationally traded services within the framework of GATT is a major point of intergovernmental discussion. The purpose of this academic exercise is to analyse and review Singapore's position with regard to the institutional framework for trade in services. It also reviews the present range of issues on service trade in the Uruguan Round and their direct importance to Singapore. This study begins with an analysis on services What constitute services? What are services? It then goes on to explain the growth of services in the domestic economy and in the international market. Chapter II focuses on issues on service trade while Chapter III concentrates on the service sector in Singapore. The last Chapter attempts to identify issues of greater relevance to Singapore and how Singapore could meaningfully enter into the give and take of GATT's negotiating process.