Rules of Origin for services: economic and legal considerations
Rules of Origin for services: economic and legal considerations
Little analytical attention has so far been devoted to the issue of rules of origin in a services and investment context. This chapter wades into this largely uncharted territory by advancing a few thoughts on a range of economic and legal considerations arising from the way in which various agreements seek to determine and condition who gets to benefit from services trade and investment liberalization. It focuses on the practice of preferential and non-preferential services trade liberalization as found in various bilateral and regional trade and investment agreements as well as the World Trade Organization’s (WTO) General Agreement on Trade in Services (GATS). It addresses a range of conceptual issues relating to services trade that impinge upon the design and implementation of rules of origin for services. The discussion draws attention to a number of salient characteristics of trade in services that limit the usefulness of concepts and approaches to origin developed in the context of trade in goods. Attention is also drawn to a number of economic considerations that should inform the design of rules of origin for services trade to minimize the potentially adverse effects of trade and investment diversion, and maximize the economy-wide gains in allocative efficiency that well-designed services liberalization can entail.
Keywords: World Trade Organization, services trade, foreign direct investment, rules of origin, preferential liberalisation, preferential trade agreements
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