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Reciprocity across modes of supply in the World Trade Organization : a negotiating formula, Volume 1
Author:Mattoo, Aaditya; Olarreaga, Marcelo; Date Stored:2000/08/14
Document Date:2000/06/30Document Type:Policy Research Working Paper
SubTopics:Environmental Economics & Policies; Common Carriers Industry; Trade and Services; Economic Theory & Research; Payment Systems & Infrastructure; Trade Policy; Free TradeLanguage:English
Report Number:WPS2373Sub Sectors:Trade
Collection Title:Policy, Research working paper series ; no. WPS 2373Volume No:1

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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