Challenges For Countries In Trade In Services’ Negotiations With The Nafta Approach: The Experience Of Chile In The Free Trade Agreement With The United States

The negotiation of trade in services in the context of a free trade agreement is particularly challenging for developing countries in view of the diverse nature of the services sector, the broad regulation applicable to the supply of services, the different modes of supply and the different approaches available for the adoption of the rules governing bilateral trade in services. Two main approaches are available for these negotiations, the General Agreement on Trade in Services (GATS) model or positive list approach, and the North American Free Trade Agreement (NAFTA) model or negative list approach. Even though these two models are similar with respect to the substantive obligations covering the conditions for supplying services, they differ significantly with respect to the manner and the structure of commitments.

Chile faced significant challenges in concluding a free trade agreement with the United States. The importance of the trading partner and its market for Chilean exports meant that Chile had to adopt a number of unfamiliar features, particularly in relation to financial services and e-commerce, in order to facilitate and consolidate the process of opening its market. This article focuses on the chapters of the United States-Chile Free Trade Agreement addressing trade in services, i.e. cross-border trade in services, financial services, telecommunications, temporary entry of business persons and some provisions on e-commerce. Some investment issues will also be address, particularly those interacting with cross-border trade in services. Finally, the article explains the relevance of this approach as a model or basis for bilateral and plurilateral negotiations on trade in services for the Pacific Rim countries and as the preferred model for services trade liberalization for the Latin American countries.