Working Papers

Trade in Services through the Temporary Presence of Natural Persons: a Win-Win Formula for Egypt and the EU

Publication Number: ECESWP131-E

April, 2008

Author : Magda Shahin and Akrum Bastawi

Type : Working Papers

With the stall in multilateral negotiations at the World Trade Organization (WTO), many countries are pursuing preferential trade arrangements in the area of trade in services at bilateral and regional levels, including the one between the European Union (EU) and Egypt. In that context, this paper explores a range of strategic issues in one specific area of trade in services: the EU’s liberalization of the ‘supply of services through the temporary presence of natural persons’, or what is known as ‘Mode 4’ under the WTO’s General Agreement on Trade in Services (GATS). This paper attempts to unravel some Mode 4 definitional myths—a crucial prerequisite to any bilateral agreement. Second, the authors find that the supply and demand dynamics of both markets create space for a win-win outcome for both parties. Such an outcome would require a serious effort to properly regulate and bilaterally manage the supply of services by Egyptian natural persons temporarily present in the EU. It would also require an astute understanding by Egypt of (a) what constitutes Mode 4 activity, (b) the EU’s internal rules on services and finally, (c) how to formulate workable negotiating proposals that reflect political realities.