International Trade in Services.pdf - DSpace at Khazar University

Understanding Trade in Environmental Services: Key Issues and Prospects 341
market or, in infrastructure segments that have natural monopoly characteristics,
effective competition for the market (such as bids for concession contracts)
can be ensured through sound procurement policies, privatization,
and public-private partnerships. Furthermore, for several basic environmental
services, such as water and sanitation, universal access is a priority. Wider
access to basic environmental services can be ensured by an incentive framework
aimed at consumers or at private actors involved in the provision of
these services. While targeting remains a challenge, experience shows that the
most effective way to target services involves subsidies for connection rather
than subsidies for consumption. In several environmental infrastructure and
noninfrastructure services, standards that specify result requirements (for
example, requirements on service quality, reliability, or continuity) or input
requirements (for example, requirements related to the materials or procedures
that the operators must use) are necessary to deal with negative externalities.
Policy makers could strengthen environmental services by using
appropriate standards and implementing these standards through marketbased
instruments.
2. Trade reform then needs to be integrated into an open and transparent
process of regulatory reform whereby decisions on the nature and pace of
reform are supported by careful analysis and an understanding of best practices.
At the multilateral level, policy makers could lock in or seek further
access for foreign environmental companies on a nondiscriminatory basis.
Investment in environmental infrastructure and noninfrastructure services
is likely to generate significant gains for developing countries. At the
regional level, policy makers could engage in deeper cooperation on issues
such as capacity building and the enforcement or harmonization of standards.
At the bilateral level, policy makers from developing countries could
engage in discussions on the movement of the workforce relevant to noninfrastructure
environmental service exports such as personnel in environmental
engineering, testing and analysis, research and development, and
consulting where these have a potential comparative advantage. Finally, policy
makers can use a variety of export promotion programs to increase the
trade in environmental services.
What Questions Should Stakeholders Bear
in Mind as They Advance Reform
The checklist in table 10.5 summarizes the main points that deserve the attention
of policy makers in preparing the reform and liberalization agenda in environmental
services.