Negotiating services trade requests-and-offers

Negotiating services trade requests-and-offers needs to be based on clear negotiating principles, especially for developing countries. Pressure often exists on developing countries to make concessions that would actually severely disadvantage local service firms. While developed economies have well-staffed international trade departments, developing economies may be challenged by a lack of information about domestic service sector issues and by a shortage of trade negotiators. Based on years of experience in assisting developing economies to both prepare requests and evaluate the requests of trading partners in the context of the General Agreement on Trade in Services (GATS), the following principles are offered for those responsible for services trade negotiations:

  1. Assume that your economy already has successful exporters in at least 30 service industries and to at least 25 economies; however, they may be smaller than competitors in other markets.
  2. Consult with domestic service industry associations or cross-industry associations (such as a chamber of commerce) to determine what will help increase service exports and address any domestic service gaps. It will help if you educate service firms regarding the four modes of services trade so that they do not overlook their own export activity (particularly in Mode 2).
  3. Focus Mode 1 requests on the ability to trade services cross-border without having to establish an office in the partner’s market.
  4. Focus Mode 4 requests on expedited temporary business entry for staff of your own service suppliers.
  5. Stimulate Mode 2 exporting for your service firms by requiring that foreign firms (including development agencies) use local service suppliers.
  6. Exercise caution in offering market entry (particularly through Mode 3) to foreign service suppliers who may place your own service suppliers at a disadvantage.
  7. Make Mode 3 concessions contingent on partnering with a local service supplier and engaging in technology transfer.
  8. Do not offer market access concessions to developed economies that are more liberal than they are offering in return or you will place your own service exporters at a disadvantage.
  9. Do not offer liberalized market access that will create an increased regulatory burden in order to monitor compliance.
  10. If an infrastructure service is presently provided by a foreign supplier (e.g., internet services), consider offering market access to other trading partners in order to increase competition and lower the cost of the service for your local firms.
  11. Link acceptance of liberalization requests to providing needed technical assistance such as skills training and assistance in addressing regulatory weaknesses (in areas like the licensing of professionals).
  12. Negotiate mutual recognition of professional credentials.

The following are selected publications by Dr. Riddle in support of trade negotiations under the GATS: