Reciprocity across modes of supply in the World Trade Organization: a negotiating formula

Aaditya Mattoo and Marcelo Olarreaga ()

No 2373, Policy Research Working Paper Series from The World Bank

Abstract: 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.

Keywords: Economic Theory&Research; Environmental Economics&Policies; Payment Systems&Infrastructure; Trade Policy; Common Carriers Industry; TF054105-DONOR FUNDED OPERATION ADMINISTRATION FEE INCOME AND EXPENSE ACCOUNT; Environmental Economics&Policies; Economic Theory&Research; Trade and Services; Trade Policy (search for similar items in EconPapers)
Date: Written
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