There is a plethora of writings regarding mutual recognition, which has long been recognized as a useful, and potentially powerful, means to tackle regulatory barriers impeding trade in services. Paradoxically, very little attention has been paid to empirical issues regarding recognition, such as the extent of unilateral or mutual recognition around the world. Observers, from both academic and policy quarters, have therefore been left with the impression that either recognition agreements were kept relatively secret, so that their benefits would not have to be extended to third parties, or they were not really so widespread as their merits would warrant, which could constitute an indication of countries’ reluctance to venture into service market integration beyond a purely negative integration approach (i.e., one that focuses solely on the elimination of market access barriers and discriminatory measures).
This was certainly the question that prompted us to study this issue: How much recognition is out there? In which sectors? Among which countries? Are there discernible patterns? In order to address these issues we made use of the only systematic database on recognition available: the WTO. Indeed, through the notification obligations contained in Article VII GATS, the WTO has gathered an interesting amount of information, virtually a database, waiting to be analyzed. And this is basically what we have attempted in this chapter. Our data are determined then by the extent of information found in notifications to the WTO.
This chapter has another objective as well: theory predicts that recognition agreements would occur across countries that trust each other’s regulatory regime. Trust is necessary since through recognition a party accepts another country’s regime as equivalent to its own: crucially, it cannot influence the shaping of the regime it accepts as equivalent. Trust, however, is hard to quantify. Recourse to proxies is thus necessary to establish whether trust exists. A number of proxies have been identified in literature, such as language, geographic proximity, similarity across legal regimes, religion, etc. We will be leaning on some of them to show whether empirical evidence (who has signed agreements with who?) supports the theoretical intuitions.
Antitrust and Trade Regulation | International Trade Law | Law
Juan A. Marchetti & Petros C. Mavroidis,
I Now Recognize You (and Only You) as Equal: An Anatomy of (Mutual) Recognition Agreements in the GATS,
Regulating Trade in Services in the EU and the WTO: Trust, Distrust and Economic Integration, Ioannis Lianos & Okeoghene Odudu (Eds.), Cambridge University Press
Available at: https://scholarship.law.columbia.edu/faculty_scholarship/4332