International Trade in Services.pdf - DSpace at Khazar University

156 International Trade in Services
protection of intellectual property rights in consumer products is easier to carry
out among large retail chains, which can be monitored and prosecuted for
infringements, whereas small companies and market stalls can usually avoid
preventive measures undertaken by the authorities.
The preparations for the trade liberalization of distribution services will entail
a review of the existing regulations that govern market access for foreign investors
and their ongoing operations once they have been established, whether the regulations
are specifically imposed on the investors or result from domestic regulations
that are applied in a nondiscriminatory fashion on national and foreign
suppliers, but that may nonetheless affect trade. This review will need to cover
many issues (for example, see box 5.5). A wide range of government policies will
need to be covered because of the central importance of distribution services to
the domestic economy and to trade.
An assessment needs to be carried out to identify government policies that significantly
affect the distribution sector either directly or indirectly, particularly
any regulations that are unnecessarily trade restrictive and that therefore should
be modified. The direct impacts on the ownership of distribution enterprises and
the capitalization and development of these enterprises must be considered first,
including initial market access conditions, while the operations of foreign companies
that have been permitted to establish a commercial presence should be considered
next. More generally, the effect on employment levels, the pace of liberalization,
and the need to take account of ethnic makeup and the ethnic sensibilities
Box 5.5: Regulatory Reform in the Retail Sector
A study by Boylaud and Nicoletti (2001) of regulatory reforms in the retail sector in
OECD countries offers useful guidance that is also relevant for developing-country
policy makers. The restrictions on market access prevailing in the distribution sector,
many of which apply more widely to businesses, relate to the following:
• Initial registration (trade registers that can involve the imposition of delays of up
to a year)
• Fit and proper person requirements for directors and managers
• Licenses or permits for location, siting, and limits on surface area and
geographical area
• The location and surface area of commercial premises, town planning and zoning,
parking areas, road access
• Regulations on specific operations and products and the range of goods
permitted
• Local monopolies for the sale of some products, including pharmaceuticals,
tobacco, alcohol
• Legal restrictions on the establishment of large outlets (quantitative limits),
including the protection of small shops to provide local proximity services and
endorsement by established retailers and local lobbies that resist foreign entrants
through their membership in local authority planning committees