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RECIPROCITY ACROSS MODES OF SUPPLY IN THE WTO: A Negotiating Formula

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. This article proposes a negotiating formula that generalizes the fundamental WTO principle of reciprocity to include alternative modes of delivery. It is shown that the adoption of this formula as a basis for negotiations could help deliver greater liberalization commitments on all modes and higher levels of welfare across WTO members.