Negotiations on safeguards and subsidies in services: A never-ending story?

After the Uruguay Round, negotiations under the General Agreement on Trade in Services (GATS) continued in several rule-making areas, including emergency safeguards and subsidies. However, there has been little progress to date. The negotiations on safeguards appear to have suffered from a combination of high ambition, limited flexibility and, possibly, too much inspiration from the existing mechanism under the General Agreement on Tariffs and Trade (GATT). Yet the GATS is different in at least two respects: its reach has been extended from cross-border trade to factor flows, and from an essentially tariff-only regime to many more permissible restrictions, including import-displacing subsidies. The question arises, whether and where safeguards could still serve a useful purpose. At the same time, with less enthusiasm, however, WTO Members have discussed the need for additional subsidy disciplines beyond current Most-Favoured-Nation (MFN) and, in scheduled sectors, national treatment obligations. A link between the two areas has not been established. This article thus seeks to identify and, as far as possible, tie up loose ends. While there appears to be little scope for GATT-type safeguards in services, a transitory arrangement, which allows for suspensions of new commitments during an implementation phase, might encourage more ambitious liberalization under the GATS.