Think Piece

Services Trade and Regulatory Cooperation

July 2015
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Decades of services trade negotiations have produced a plethora of rules and commitments but very little real liberalisation. One reason is a form of “negotiating tunnel vision,” which has led to a focus on reciprocal market opening rather than on creating the regulatory preconditions for liberalisation. This paper makes four points. First, current trade disciplines are a useful but inadequate restraint on regulatory protection. Second, proposed trade disciplines on domestic regulation add value but do not solve existing problems and can create new “hold back” problems. Third, much more could be achieved through greater emphasis on regulatory cooperation, which is in many cases not just an “add on” but a precondition for further liberalisation. Finally, certain forms of regulatory cooperation create a risk of exclusion for non-participants, which can and should be addressed. The paper illustrates these arguments drawing upon recent developments in privacy and data flows, financial services, labour mobility, and competition policy.

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