8. Trade in Services and the Pacific Alliance: Contrasting Ambitions with Reality

The Pacific Alliance (PA) is a trade-liberalizing initiative that is dutifully espousing pre-existing models of services rule-making reflected in, on the one hand, the North American Free Trade Agreement (NAFTA), and on the other, the World Trade Organization General Agreement on Trade in Services (GATS). The services disciplines agreed to date among PA partners draws on both models, presumably drawing on what is considered to be the best elements of each model. This chapter delves on the main problem of such an approach insofar as both models are arguably flawed, no longer reflect the reality of contemporary services trade, nor tackle issues that will be centrally important to the future of PA members’ service sectors and trade in the coming decades. Liberalization prospects in services are today intrinsically linked to cross-border trade, and more specifically to E-Commerce, where market access and non-discrimination issues are no longer the main or sole barriers to cross-border commerce. Meanwhile, cross-border-trade commitments in other sectors are unlikely to be expanded any time soon since the underlying concerns relate more to regulatory issues than to traditional political economy demands for protection. Looking forward, prospects for deepened trade and investment liberalization in services will depend more on the recognition and harmonization of domestic regulation than on the negotiation of commitments in accordance with standard market access and non-discrimination principles. The achievement of a free-movement-of-services objective will remain elusive unless and until Pacific Alliance countries think outside the confines of existing models and negotiate further trade liberalization more along the lines of the mutual recognition principle, provided, again, that PA Members are committed to achieving significant trade and investment liberalization in services.