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  • Cited by 1
  • Print publication year: 2014
  • Online publication date: April 2014

7 - Mutual recognition of services regulation at the WTO

Summary

Introduction

Mutual recognition is a useful tool for international liberalization in particular contexts. However, it has two types of limit, and to the extent that it may exceed these limits, it poses two important types of risk.

The first limit of mutual recognition is set by the degree and importance of achievement of the relevant regulatory goal: the degree to which the foreign regulation achieves the goals of the domestic regulatory scheme, and the importance of meeting these goals. Thus, the first risk is that mutual recognition is implemented in a way that sacrifices important regulatory goals without adequate justification – without ‘sufficient’ achievement of the regulatory goal. States may, at times, accept compromises of their regulatory goals, but they should not do so unless they are compensated with enhanced welfare from free trade or from other sources. The second limit of mutual recognition relates to the material capacities of developing countries. The risk is that mutual recognition is established by developed countries in a way that disadvantages services exports of developing countries.

References
Bartels, L. (2005), ‘The Legality of the EC Mutual Recognition Clause under WTO Law’, Journal of International Economic Law 8(3): 691–720
Davey, W. and Pauwelyn, J. (2000), ‘MFN Unconditionality: A Legal Analysis of the Concept in View of its Evolution in the GATT/WTO Jurisprudence with Particular Reference to the Issue of “Like Product”’ in Cottier, T., Mavroidis, P.C. and Blatter, P. (eds.), Regulatory Barriers and the Principle of Non-Discrimination in World Trade Law, Ann Arbor: Michigan University Press
Nicolaïdis, K. and Shaffer, G. (2005), ‘Transnational Mutual Recognition Regimes: Governance without Global Government’, Law and Contemporary Problems 68(3–4): 263–318
Weiler, J. (2005), ‘Mutual Recognition, Functional Equivalence and Harmonization in the Evolution of the European Common Market and the WTO’ in Kostoris Padoa Schioppa, F. (ed.), The Principle of Mutual Recognition in the European Integration Process, New York: Palgrave Macmillan