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Regional Integration Through Services?


Sona Mitra

INTEGRATING SERVICES IN SOUTH ASIA: TRADE, INVESTMENT, AND MOBILITY
By Rupa Chanda
Oxford University Press, New Delhi, 2011, pp.348, Rs.895.00

VOLUME XXXVI NUMBER 3 March 2012

'Integrating Services in South Asia' comes at a very im-portant juncture when services negotiations are under way within SAARC nations and are also de-emed to be a very impor-tant part of bilateral and multilateral trading arran-gements with huge poten-tial for the region. The services have emerged as the fastest growing sector in many parts of the developing world espe-cially in Latin America and Asia since mid-eighties, which propelled the Uruguay Round (1986-1992) of multi-lateral negotiations to include services export in the General Agreement for Tariffs and Trade (GATT). This resulted in the General Agreement on Trade in Services (GATS) that entered into force in January 1995 with the aim of extending the multilateral trading system to the service sectors, including almost similar provisions of GATT. Although initially South Asia, under the dominance of India, did not cooperate much during the Uruguay Round of negotiations, after two decades of GATS coming into existence services have developed very high stakes within the South Asian region. This has been possible due to the vast increases in the share of services to their respective country GDPs alongside very high growth rates of the sector on quite high base. In fact the literature on service in South Asia has been debating on the sustainability of such service sector led growth process in the region, particularly so for India in the past decade. Chanda's book comes as an addition to this wide range of literature although not quite directly. The book deals more in issues related to trade in services within the region and argue the case for services integration under SAFTA (South Asian Free Trade Agreement) which according to Chanda has the potential to sustain the high services growth in the region albeit with the proper negotiations. The book is a successful attempt at bridging these two gaps between theory and policy by including an elaborate discussion on the potential opportunities and challenges in individual service sub-sectors on a range of cross cutting issues such as regional mobility of service providers, taxes, R&D, regulatory cooperation and others. The author argues for letting the services sector lead the integration process within SAARC. She makes a case for increased multilateral trading arrangements and deepening trade and investment in services which would clearly benefit the region and individual nations given its sheer size. She says: ...while SAFTA may not be a successful agreement as it stands today, if ...


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