Social Welfare through International Trade
Chapter 2: A Taxonomy of Trade
The World Trade Organization, created in 1994, is one of many international bodies that are favourable to barrier-free international trade. The WTO continues the work of the General Agreement on Trade and Tariffs that goes back to 1948. The WTO in its time had wrestled with the definition and status of services. A tangible consequence was the General Agreement on Trade in Services (http://gats-info.eu.int). Negotiated by 120 countries throughout the world, it was adopted by the WTO in the course of its Uruguay Round and came into force in 1995. The GATS has provided a template (Blouin, 2006: 171–4). It has suggested that cross-border trade on invisible account can usefully be categorised into four modes or dimensions: services, patients, capital and labour. These four modes will be examined in the first four sections of this chapter. The fifth section will suggest that the first four sections only repeat what has long been known. Unrestricted multilateral exchange, sensibly managed, can result in greater efficiency, faster growth and higher living standards. It can greatly expand the freedom to choose. In spite of that less than 40 per cent of WTO members as of 2009 had voluntarily committed themselves to opening up their health care sectors. The figure for finance, tourism and telecommunications is over 90 per cent (Smith et al., 2009: 593). Countries can liberalise without doing so under GATS. GATS affects health sovereignty since it sets down rules of its own on market access and national treatment. GATS, moreover,...
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