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Reciprocity Across Modes of Supply in the WTO: A Negotiating Formula

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  • Mattoo, Aaditya
  • Olarreaga, Marcelo

Abstract

The negotiations on trade in services at the WTO have so far produced little liberalization beyond levels unilaterally undertaken by countries. One reason is the neglect of the traditional negotiating principle of reciprocity. In particular, there has been a failure to exploit the scope built into the services agreement (GATS) for exchange of market access 'concessions' across the different modes of supply - cross-border delivery, and the movement of capital and individuals. Using the Heckscher-Ohlin-Vanek framework, this paper proposes 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 help deliver greater liberalization commitments on all modes - producing substantial gains in global welfare and more balanced outcomes.

Suggested Citation

  • Mattoo, Aaditya & Olarreaga, Marcelo, 2000. "Reciprocity Across Modes of Supply in the WTO: A Negotiating Formula," CEPR Discussion Papers 2481, C.E.P.R. Discussion Papers.
    • Handle: RePEc:cpr:ceprdp:2481
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    References listed on IDEAS

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    1. Won Chang & L. Alan Winters, 2015. "How Regional Blocs Affect Excluded Countries: The Price Effects of MERCOSUR," World Scientific Book Chapters, in: Non-Tariff Barriers, Regionalism and Poverty Essays in Applied International Trade Analysis, chapter 11, pages 199-214, World Scientific Publishing Co. Pte. Ltd..
    2. Brecher, Richard A. & Diaz Alejandro, Carlos F., 1977. "Tariffs, foreign capital and immiserizing growth," Journal of International Economics, Elsevier, vol. 7(4), pages 317-322, November.
    3. Mattoo, Aaditya & Olarreaga, Marcelo, 2000. "Should credit be given for autonomous liberalization in multilateral trade negotiations?," Policy Research Working Paper Series 2374, The World Bank.
    4. Robert W. Staiger & Kyle Bagwell, 1999. "An Economic Theory of GATT," American Economic Review, American Economic Association, vol. 89(1), pages 215-248, March.
    5. Arvind PANAGARIYA, 2000. "The Millennium Round And Developing Countries: Negotiating Strategies And Areas Of Benefits," G-24 Discussion Papers 1, United Nations Conference on Trade and Development.
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    Citations

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    Cited by:

    1. Bernard Hoekman & Francis Ng & Marcelo Olarreaga, 2002. "Eliminating Excessive Tariffs on Exports of Least Developed Countries," The World Bank Economic Review, World Bank, vol. 16(1), pages 1-21, June.
    2. Mattoo, Aaditya, 2001. "Shaping future GATS rules for trade in services," Policy Research Working Paper Series 2596, The World Bank.
    3. Aaditya Mattoo, 2003. "Shaping Future Rules for Trade in Services: Lessons from the GATS," NBER Chapters, in: Trade in Services in the Asia-Pacific Region, pages 47-78, National Bureau of Economic Research, Inc.
    4. Pascalis Raimondos & Alan D. Woodland, 2011. "Reciprocity, World Prices and Welfare," CESifo Working Paper Series 3607, CESifo.
    5. Olarreaga, Marcelo & Ng, Francis, 2001. "Tariff Peaks in the Quad and Least Developed Country Exports," CEPR Discussion Papers 2747, C.E.P.R. Discussion Papers.

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    More about this item

    Keywords

    Gats; Services; Trade;
    All these keywords.

    JEL classification:

    • F02 - International Economics - - General - - - International Economic Order and Integration
    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
    • F15 - International Economics - - Trade - - - Economic Integration

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