Reciprocity Across Modes of Supply in the World Trade Organization : A Negotiating Formula
Negotiations on trade in services at the World Trade Organization (WTO) have so far produced little liberalization beyond levels countries have undertaken unilaterally. One reason: limited application of the traditional negotiating principle of reciprocity. In particular, participants have failed to exploit the scope of the services agreement (General Agreement on Trade in Services -GATS) for the exchange of market-access "concessions" across different modes of supply - cross-border delivery and the movement of capital and workers. Using the Heckscher-Ohlin-Vanek framework, the authors propose a negotiating formula that generalizes the fundamental WTO principle of reciprocity to include alternative modes of delivery. Adoption of this formula as a basis for negotiations could bring greater commitments to liberalization on all modes of delivery, producing substantial gains in global welfare and more balanced outcomes.
Summary: | Negotiations on trade in services at the
World Trade Organization (WTO) have so far produced little
liberalization beyond levels countries have undertaken
unilaterally. One reason: limited application of the
traditional negotiating principle of reciprocity. In
particular, participants have failed to exploit the scope of
the services agreement (General Agreement on Trade in
Services -GATS) for the exchange of market-access
"concessions" across different modes of supply -
cross-border delivery and the movement of capital and
workers. Using the Heckscher-Ohlin-Vanek framework, the
authors propose a negotiating formula that generalizes the
fundamental WTO principle of reciprocity to include
alternative modes of delivery. Adoption of this formula as a
basis for negotiations could bring greater commitments to
liberalization on all modes of delivery, producing
substantial gains in global welfare and more balanced outcomes. |
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