Regulation of the services market

The growth of international trade in services, especially modern services, and the transformation of services into an integral part of the intra-production activities of TNCs have put on the agenda the need to regulate the services market at the international, regional and sectoral levels.

To date, the current regulatory system operates at several levels, each of which is characterized by the presence of a number of specific organizations.

The state protects the internal market in the service sector through so-called specific obligations. They are fixed minimum restrictions on the activities of foreign suppliers or the sale of foreign services in the domestic market.

establish a minimum level of foreign investment in a particular service sector; limit the number of foreign representative offices, the share of foreign capital in the capital of domestic companies, the number of foreign personnel; introduce quotas for specific products, embodied services or limit the amount of foreign currency provided for the import of services. Such restrictions are applied, inter alia, to protect transport services markets and information sectors (quotas for the screening of films, television programmes, etc.); introduce and complicate the rules for issuing documents when national service providers travel abroad and when foreign suppliers enter this country, etc. These may be entry permits for work, a licensing system for engaging in certain professional activities, requirements for foreign language proficiency, etc.

A significant role in the regulation of international trade in services is played by bilateral agreements, both sectoral (most often on transport and communications) and trade and economic, which consider certain aspects of trade in services and investment in this area. Another form is multilateral regulation within integration associations. In the European Union, for example, restrictions on mutual trade in goods and services have been lifted.

An important form is the regulation of trade in services within the framework of international organizations. Specialized intergovernmental organizations are engaged in the preparation of agreements on these issues: the International Civil Aviation Organization (ICAO), the International Maritime Organization (IMO), the World Tourism Organization (WTO) and others, as well as international trade and economic organizations of a wide profile (primarily WTO, UNCTAD, OECD).

The General Agreement on Trade in Services (GATS) entered into force in January 1995. The specificity of this agreement lies in the fact that it concerns not only traditional trade barriers, but also investment in the service sector.
In addition, WTO member countries signed an agreement on the liberalization of the financial services market.

The GATS shall contain:

provisions defining the main responsibilities of WTO members in the area of trade in services; an annex on the special status of certain types of services; lists of initial mutual concessions on access to services markets; determines the principles of use of national treatment and most-favored-nation treatment in the field of MTU.

Thus, the international community is taking measures to stimulate the growth of international trade in services, while maximizing the profitability of this sphere of the world economy.