Why were the developing countries initially against the inclusion of trade in services in the Uruguay Round of Multilateral Trade Negotiations? Discuss.
The developing countries were initially against the inclusion of trade in services in the Uruguay Round of Multilateral Trade Negotiations due to following reasons:
Lack of Competitiveness:
In most of the developing countries most of the commercial services were monopolized and in the hands of poorly run public undertakings. Developing countries were afraid of the fact that services sector of developing countries lacked strength to face the competition from the services sector of developed countries. Developing countries feared that since the services sector of developed countries enjoyed competitive strength over their services sector, developed countries would swamp their nascent services sector.
Harmful Effects on Economy:
Developing countries were afraid of the fact that liberal imports of services and larger imports of foreign direct investment into their economies would undermine their indigenous technologies. In the opinion of developing countries, indigenous technologies were more relevant for the economic growth of their countries in comparison to technologies of developed economies. Further, developing countries had the apprehension that liberal imports of services would aggravate their problems of balance of payments.