International Trade in Services.pdf - DSpace at Khazar University

68 International Trade in Services
services in overseas locations as clients expand abroad. Indeed, for many transactions,
international rules and regulations have become the core of the legal corpus,
requiring legal expertise that goes well beyond the scope of domestic law. In
this context, more open markets and greater international integration in legal
services can bring new expertise and best practice knowledge to a country and
help professional bodies and educational institutions adjust to the new challenges
and opportunities that they and their clients face in global markets.
Opening the market for legal services can also help overcome the resistance of
vested interests to changes involving new practices. Interest groups in some countries
may have pushed their governments to impose regulations on the legal profession
that are more restrictive than necessary to meet the legitimate objectives of quality
assurance and user protection.The outcome has often been a shortage of quality services
and the concentration of the profession’s output in the hands of a few. This regulatory
environment may therefore generate economic rents for vested interests, while
not necessarily contributing to the common good. In this context, trade can help
introduce greater competition, induce domestic service providers to adopt new work
methods and practices, and raise the efficiency of the provision of legal services.
The employment impact of easing restrictions on market access and national
treatment depends on the importance of two factors. Serving multinational firms
requires a different skill set than providing services to domestic clients. Given the
scarcity of sufficiently qualified staff for international legal work in host countries,
newly implanted multinational firms will rely on their legal advisers at headquarters,
and the result will be limited job and knowledge spillover to the host country.
Alternatively, economic integration offers opportunities for domestic law firms to
expand their practice areas and client base. For example, firms in developing and
developed countries might engage in cooperative arrangements to handle host
country, home country, third-country, and international law in parallel. Ultimately,
developing-country law firms might be able to go beyond serving domestically
implanted multinational firms and move into the export of legal services
within the region and beyond, thereby creating high value added jobs.
In what follows, we synthesize background information on the legal profession
and discuss policy initiatives that decision makers interested in developing the
legal profession can undertake so as to improve regulatory conditions domestically
and promote potential export markets. The next section provides an
overview of the legal profession and illustrates the extent and benefits of the trade
in legal services. Thereafter, we discuss initiatives to pursue a policy dialogue at the
national and regional levels designed to identify trade-related issues and constraints
and potential policy initiatives to build professional value and improve
market access abroad. Finally, a concluding section contains a list of questions that
stakeholders should bear in mind as they advance reforms.