Which of the following characterizes trade in services?

Which of the following characterizes trade in services?

• A. It was initially included in GATT
• B. It has only marginal importance in global trade
• C. It was excluded from early GATT principles
• D. It has replaced merchandise trade

Answer: (C)

Trade in services is characterized by its exclusion from early General Agreement on Tariffs and Trade (GATT) principles. GATT, established in 1947, primarily focused on the trade of goods, which led to a significant emphasis on tariffs and regulations related to merchandise trade. During this time, the trade in services was not adequately addressed or governed, as it was not seen as a significant aspect of international trade until later years. The recognition of services as an important aspect of global trade evolved over time, particularly with the establishment of the General Agreement on Trade in Services (GATS) under the World Trade Organization (WTO) framework in the early 1990s. GATS aimed to promote international trade in services by providing a structured legal framework and liberalizing this sector, acknowledging its growing importance in the global economy. This understanding is essential to grasp that while merchandise trade dominated early trade agreements, it was the recognition and regulation in subsequent agreements that acknowledged the significance of services in the global market.

Trade in services is characterized by its exclusion from early General Agreement on Tariffs and Trade (GATT) principles. GATT, established in 1947, primarily focused on the trade of goods, which led to a significant emphasis on tariffs and regulations related to merchandise trade. During this time, the trade in services was not adequately addressed or governed, as it was not seen as a significant aspect of international trade until later years.

The recognition of services as an important aspect of global trade evolved over time, particularly with the establishment of the General Agreement on Trade in Services (GATS) under the World Trade Organization (WTO) framework in the early 1990s. GATS aimed to promote international trade in services by providing a structured legal framework and liberalizing this sector, acknowledging its growing importance in the global economy.

This understanding is essential to grasp that while merchandise trade dominated early trade agreements, it was the recognition and regulation in subsequent agreements that acknowledged the significance of services in the global market.