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Aaditya Mattoo (World Bank) Sacha Wunsch-Vincent (OECD)*

WTO Symposium on Cross-Border Supply of Services Possible approaches towards further liberalization within the GATS Geneva: 29 April 2005. Aaditya Mattoo (World Bank) Sacha Wunsch-Vincent (OECD)* *the views expressed do not necessarily represent the views of the OECD.

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Aaditya Mattoo (World Bank) Sacha Wunsch-Vincent (OECD)*

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  1. WTO Symposium on Cross-Border Supply of ServicesPossible approaches towards further liberalization within the GATSGeneva: 29 April 2005 Aaditya Mattoo (World Bank) Sacha Wunsch-Vincent (OECD)* *the views expressed do not necessarily represent the views of the OECD

  2. Three inter-related issues • What services sectors do Members schedule?

  3. Three inter-related issues • What services sectors do Members schedule? • What obligations do they assume?

  4. Three inter-related issues • What services sectors do Members schedule? • What obligations do they assume? • How do they negotiate commitments?

  5. I. What services do Members include in their schedules? Two extremes • Only specifically listed services • All services except those explicitly excluded Choice: Caution vs comprehensiveness

  6. I. What services do Members include in their schedules? Two extremes • Only specifically listed services • All services except those explicitly excluded Choice: Caution vs comprehensiveness A possible solution • Specifically listed + “other” categories in selected sectors / commitments at the two-digit level

  7. II. What obligations do Members assume? Two extremes • Unbound or significant restrictions • Full Market access + national treatment Choice: Deepening vs widening coverage

  8. II. What obligations do Members assume? Two extremes • Unbound or significant restrictions • Full Market access + national treatment Choice: Deepening vs widening coverage A possible solution • Non-discrimination achieved via: • Market access only excluding discriminatory quotas • National treatment

  9. III. How do Members negotiate commitments? Two options • Request and offer • Collectively agreed list of services and level of obligations (model schedule or benchmark)

  10. III. How do Members negotiate commitments? Two options • Request and offer • Collectively agreed list of services and level of obligations (model schedule or benchmark) Arguments in favor of the second option • Reduce transactions costs of negotiations • Overcome unequal bargaining power • Overcome the free-rider problem • Ensure credit for unilateral liberalization

  11. Example of how elements of I, II and III may be combined

  12. Example of how elements of I, II and III may be combined

  13. Example of how elements of I, II and III may be combined

  14. Options to Secure Openness of Cross-Border Trade in Services • Option 1: Targeted Commitments for Cross-Border Trade, for example in IT and BPO Services • Option 2: A Horizontal Commitment To Liberalize Cross-Border Trade in a Wide Range of Services

  15. Case for going further on Mode 1 collectively • Open already • Not giving up desirable freedom • Shared interest

  16. Regional Distribution of Business Services Exports Source: IMF Balance of Payments Statistics; Note: -The “Business Services” category includes Total Services minus Transportation, Travel and Government Services. Alternatively, Business Services consist of: Communication, Construction, Insurance, Financial, Computer & info, Other business, Personal, cultural and recreational services, as well as Royalties and License fees.

  17. Source: IMF Balance of Payments Statistics

  18. Conclusion • The WTO may not be the appropriate forum for trade-facilitating “deep integration” (e.g. with regard to taxation, privacy...) • But the WTO can and should prevent discrimination in trade both in the sense of national treatment and most-favored nation treatment

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