Only after four years of prenegotiations did the Uruguay Round of Multilateral Trade Negotiations take place in 1986. This paper analyzes the prenegotiation phase on international trade in services by focusing on a North-South perspective of the underlying economics of international trade in services and the diplomatic exercise this prenegotiation phase set off. The factors during the prenegotiation phase which led to the launch of the Uruguay Round of negotiations are dissected as well as how the prenegotiation phase weakened the GATT’s long standing positive reputation. An overview of the important economic issues which will influence the General Agreement on Trade in Services (GATS) is included.