Fourth, progress under Mode 4 is also constrained by the traditional mercantilist
paradigm of GATT negotiations, which WTO still continues by relying on reciprocal
exchanges of concessions. The scope of GATT, however, was confined to just one mode
of supply (cross-border trade) and one form of trade restriction (tariffs). The GATS, on
the other hand, covers three additional modes, including consumer movements and
factor flows (capital and labor), and permits a variety of negotiable restrictions that
apply to the treatment of products (services) and/or their suppliers (Adlung, 2009). That
makes negotiation on services liberalization more complicated than in commodities or
manufactures[19], which has manifested in recent years more especially in respect to
most restrictive but potentially most beneficial areas, such as the FDI and Mode 4.
Fifth, the Doha Round, launched in 2001 with wide mandates for negotiating services,
failed miserably[20]. One of the contentious issues, as far as Mode 4 is concerned, is that
developing countries have been seeking greater openness in this area as they have
comparative advantage in it by insisting on negotiations on agriculture and
non-agricultural market access (NAMA) issues prior to services issues to which
developed countries remain firmly opposed[21]. Then, any negotiation under the WTO
remains perpetually hostage to its built-in structural problem – “Nothing is agreed until
everything is agreed”. Such a principle could be manageable under the GATT,
which was basically a club of developed countries, but it has become increasingly
unwieldy for the WTO, which now boasts of 159 members.
Fourth, progress under Mode 4 is also constrained by the traditional mercantilistparadigm of GATT negotiations, which WTO still continues by relying on reciprocalexchanges of concessions. The scope of GATT, however, was confined to just one modeof supply (cross-border trade) and one form of trade restriction (tariffs). The GATS, onthe other hand, covers three additional modes, including consumer movements andfactor flows (capital and labor), and permits a variety of negotiable restrictions thatapply to the treatment of products (services) and/or their suppliers (Adlung, 2009). Thatmakes negotiation on services liberalization more complicated than in commodities ormanufactures[19], which has manifested in recent years more especially in respect tomost restrictive but potentially most beneficial areas, such as the FDI and Mode 4.Fifth, the Doha Round, launched in 2001 with wide mandates for negotiating services,failed miserably[20]. One of the contentious issues, as far as Mode 4 is concerned, is thatdeveloping countries have been seeking greater openness in this area as they havecomparative advantage in it by insisting on negotiations on agriculture andnon-agricultural market access (NAMA) issues prior to services issues to whichdeveloped countries remain firmly opposed[21]. Then, any negotiation under the WTOremains perpetually hostage to its built-in structural problem – “Nothing is agreed untileverything is agreed”. Such a principle could be manageable under the GATT,which was basically a club of developed countries, but it has become increasinglyunwieldy for the WTO, which now boasts of 159 members.
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