1. 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

2. Three inter-related issues 1.What services sectors do Members schedule? Sector

3. Three inter-related issues 1.What services sectors do Members schedule? 2.What obligations do they assume? SectorLimitations on Market Access Limitations of National Treatment

4. Three inter-related issues 1.What services sectors do Members schedule? 2.What obligations do they assume? 3.How do they negotiate commitments? SectorLimitations on Market Access Limitations of National Treatment

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 What servicesWhat obligations Negotiating process Existing approach Specified services VariableRequest and offer

12. Example of how elements of I, II and III may be combined What servicesWhat obligations Negotiating process Existing approach Specified services VariableRequest and offer AdvancedAll services except agreed exceptions Full market access and national treatment Collectively agreed model

13. Example of how elements of I, II and III may be combined What servicesWhat obligations Negotiating process Existing approach Specified services VariableRequest and offer IntermediateSpecified services + selected other Non- discrimination only Collectively agreed model AdvancedAll services except agreed exceptions Full market access and national treatment Collectively agreed model

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