International Trade in Services.pdf - DSpace at Khazar University

270 International Trade in Services
What Can Be Done to Harness Trade Opportunities
Promoting regulations at home and abroad that are less
trade restrictive
Accounting is a highly regulated profession. Regulations aim to protect against
market failures, ensure good corporate behavior, and achieve societal objectives.
Regulations can be the result of public policy processes and reflect sound policy
objectives. For example, rules to protect against market imperfections include
qualification requirements and technical standards in professional service sectors,
prudential regulations in the financial sector, and performance requirements in the
telecommunications sector. Regulations may also seek to achieve societal objectives.
For instance, competition policy can prohibit anticompetitive practices that are
detrimental to consumers. Investment policy can promote job creation. Universal
service rules can ensure access to telecommunications, energy, and transportation.
Regulations can have a substantial impact on the way firms operate and trade. See
box 8.3 for examples of domestic regulations that may impede trade in accounting
services. 3 International trade arrangements therefore recognize the importance of
regulations and seek to ensure that rules are not trade restrictive. For example, the
GATS states that World Trade Organization (WTO) members recognize “the right of
Members to regulate, and to introduce new regulations, on the supply of services
within their territories in order to meet national policy objectives” (WTO 1993, 285).
Rules are assessed according to their influence on trade rather than the underlying
validity of their purpose. The challenge for policy makers is to ensure that professional
rules achieve policy objectives and are crafted to be no more trade restrictive
than necessary. In sum, it is important to improve regulation, not increase it.
The government is not the only regulator intervening in the profession. Professional
bodies and oversight entities play an important role in the industry. From
country to country, the organization of powers and responsibilities among the
different regulators varies. The level of independence of professional bodies also
varies. Oversight may touch on certification for professionals, licensing requirements
for firms, and standards for accounting processes, as well as standards for the final
service such as financial reports and income statements (WTO 2001).
The organization of powers and responsibilities sometimes makes it difficult
for the government or professional bodies to adopt rules that are no more trade
restrictive than necessary. In some countries, professional bodies are the main
promoters of trade liberalization. In other countries, they represent the vested
interests of the profession and oppose any kind of market liberalization. It is the
role of the government to ensure that the interests of users are equitably represented.
Regulatory entities can also improve the good governance of the sector
and facilitate trade by providing inquiry points online and facilitating access to