Reciprocity
Reciprocity includes the special allowances, preferences, and favors businesses extend to important customers and suppliers who are also customers. Often businesses will direct purchases toward companies that also buy products from them. Special credit arrangements, accelerated delivery, or customized service is offered to firms with which a company has developed reciprocity. Many reciprocal agreements are informal arrangements among area businesspeople to “take care” of each other. The U.S. Justice Department and FEDERAL TRADE COMMISSION scrutinize formal reciprocal business agreements, often viewing them as an attempt to reduce COMPETITION. Reciprocity also refers to mutual recognition agreements among business professions. Historically many business professions were licensed by state agencies, requiring individuals wishing to work in more than one state to pass the certification requirements of each state in which they wanted to work. This limited competition within the state and required nonstate-licensed professionals to work with licensed professionals in the state. INSURANCE, law, contracting, and cosmetology are just a few business professions controlled by state licensing. Some states have signed reciprocity agreements, accepting the license from another state as a basis of certification. On the international level, the WORLD TRADE ORGANIZATION adopted its Guidelines for Mutual Recognition Agreements, providing a common approach to negotiating reciprocity arrangements for business professionals operating in international trade. The NORTH AMERICAN FREE TRADE AGREEMENT (NAFTA) also expanded reciprocity agreements for business professionals working in North America. Thanks to U.S. LEADERSHIP in international SERVICES trade, reciprocal agreements allowing professionals to practice their trade in other countries has expanded opportunities for U.S. professionals abroad.
Reciprocity
Related links Reciprocity:
Licensing Tariff Countertrade Restraints of trade Relationship marketing Harmonization Antitrust law