Ongoing negotiations under the General Agreement on Trade in Services (GATS) offer a means of addressing many of the trade impediments encountered by oil and gas field service providers, reports the U.S. International Trade Commission (ITC) in its study Oil and Gas Field Services: Impediments to Trade and Prospects for Liberalization.

The ITC, an independent, nonpartisan, factfinding federal agency, conducted the investigation at the request of the U.S. Trade Representative. The report describes the various activities involved in oil and gas field services, discusses the nature and extent of trade, and examines the extent of impediments to trade and the potential benefits of trade liberalization. Highlights of the report follow.

• The most frequently encountered impediments to trade in oil and gas field services are poor transparency, specific labor requirements, joint-venture requirements, limitations on foreign investment, and technology transfer requirements. Many of these impediments are addressed by principles contained within the GATS, one of the World Trade Organization (WTO) agreements.

• To date, 51 out of 144 WTO members have made binding commitments that pertain to oil and gas field services under the GATS. These countries account for 36 percent of world oil reserves, 42 percent of world oil production, 30 percent of world natural gas reserves, and 48 percent of world natural gas production. However, the commitments made by all but eight of these countries may be considered "partial" commitments in that market access and nondiscriminatory treatment are not guaranteed unconditionally.

• On the basis of existing commitments, there appears to be considerable room for pursuing further liberalization of oil and gas field services under the GATS. If WTO members who have yet to list any commitments in this sector were to schedule at least some commitments, benefits such as increased transparency, improved legal certainty, and the establishment of a baseline level of treatment that would prevent a country from increasing restrictions on foreign oil and gas field service providers would result. Additional progress could be made if those countries that have already scheduled partial commitments would schedule further trade liberalizing commitments that reduce or eliminate remaining significant restrictions on market access and national treatment.

• Further liberalization would improve the general business environment for oil and gas field service providers. The result would likely be enhanced competition within the industry, which will lower the costs of developing oil and gas resources, to the ultimate benefit of oil and gas producers, consumers, and the global economy.

Oil and Gas Field Services: Impediments to Trade and Prospects for Liberalization (Investigation 332-444, USITC publication 3582, March 2003) will be posted in the Publications area of the ITC Internet site at www.usitc.gov. A printed or CD-ROM copy may be requested by calling 202-205-1809 or by writing the office of the Secretary, U.S. International Trade Commission, 500 E Street, SW, Washington, DC, 20436. Requests may also be made by fax to 202-205-2104.

ITC general factfinding investigations, such as this one, cover matters related to tariffs or trade. The investigations are generally conducted at the request of USTR, the Senate Committee on Finance, or the House Committee on Ways and Means; the ITC may also self-initiate investigations. The resulting reports convey the Commission's objective findings and independent analyses on the subjects investigated. The Commission makes no recommendations on policy or other matters in its general factfinding reports. Upon completion of each investigation, the ITC submits its findings and analyses to the requester. General factfinding investigation reports are subsequently released to the public, unless they are classified by the requester for national security reasons.