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The political economy of services trade liberalization: a case for international regulatory cooperation?

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  • Bernard Hoekman
  • Aaditya Mattoo
  • André Sapir

Abstract

Little progress has been made since the creation of the WTO in expanding and deepening the coverage of services liberalization commitments. This paper identifies and discusses five hypotheses that may explain the absence of dynamism: (i) technological changes allow ever more services to be traded cross-border unaffected by policy; (ii) strong incentives to pursue liberalization on an autonomous basis (unilaterally); (iii) perceptions that bilateral or regional cooperation are a good substitute for the WTO; (iv) standard political economy factors such as adjustment costs and resistance by incumbents to erosion of rents; and (v) concerns that the WTO will affect the ability of regulators to enforce national norms. We argue that all of these explanations play a role, and that some of these factors significantly impede the scope for reciprocal exchanges of ‘concessions’—the engine of WTO negotiations.

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Bibliographic Info

Article provided by Oxford University Press in its journal Oxford Review of Economic Policy.

Volume (Year): 23 (2007)
Issue (Month): 3 (Autumn)
Pages: 367-391

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Handle: RePEc:oup:oxford:v:23:y:2007:i:3:p:367-391

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Web page: http://oxrep.oupjournals.org/

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References

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  1. Konan, Denise Eby & Maskus, Keith E., 2003. "Quantifying the impact of services liberalization in a developing country," Policy Research Working Paper Series 3193, The World Bank.
  2. Mattoo, Aaditya, 2005. "Services in a development round : three goals and three proposals," Policy Research Working Paper Series 3718, The World Bank.
  3. Patrick Messerlin, 2005. "The Directive on Services: Rent Seekers Strike Back," Sciences Po publications info:hdl:2441/8131, Sciences Po.
  4. Arnold, Jens Matthias & Mattoo, Aaditya & Narciso, Gaia, 2006. "Services inputs and firm productivity in Sub-Saharan Africa : evidence from firm-level data," Policy Research Working Paper Series 4048, The World Bank.
  5. Hoekman, Bernard & Mattoo, Aaditya, 2006. "Services, Economic Development and the Doha Round: Exploiting the Comparative Advantage of the WTO," CEPR Discussion Papers 5628, C.E.P.R. Discussion Papers.
  6. James Markusen & Thomas Rutherford & David Tarr, 2005. "Trade and direct investment in producer services and the domestic market for expertise," Canadian Journal of Economics, Canadian Economics Association, vol. 38(3), pages 758-777, August.
  7. Hoekman, Bernard, 2006. "Liberalizing trade in services : a survey," Policy Research Working Paper Series 4030, The World Bank.
  8. Langhammer, Rolf J., 2005. "The EU offer of service trade liberalization in the Doha Round : evidence of a not-yet-perfect customs union," Open Access Publications from Kiel Institute for the World Economy 3509, Kiel Institute for the World Economy (IfW).
  9. repec:spo:wpecon:info:hdl:2441/8131 is not listed on IDEAS
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Citations

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Cited by:
  1. Rolf J. Langhammer, 2009. "Unordnung in der Internationalen Handelsordnung. Befunde, Gründe, Auswirkungen und Therapien," Kiel Working Papers 1533, Kiel Institute for the World Economy.
  2. Philippa Dee & Anne McNaughton, 2011. "Promoting Domestic Reforms through Regionalism," Governance Working Papers 23224, East Asian Bureau of Economic Research.
  3. Erik van der Marel, 2011. "Trade in services and TFP: the role of regulation," LSE Research Online Documents on Economics 38991, London School of Economics and Political Science, LSE Library.
  4. Guiseppe Bertola & Lorenza Mola, 2010. "Services Provision and Temporary Mobility: Freedoms and Regulation in the EU," LEQS – LSE 'Europe in Question' Discussion Paper Series 09, European Institute, LSE.
  5. Bianka Dettmer, 2012. "Business services outsourcing and economic growth: Evidence from a dynamic panel data approach," Jena Economic Research Papers 2012-049, Friedrich-Schiller-University Jena, Max-Planck-Institute of Economics.
  6. Bernard Hoekman, 2008. "The General Agreement on Trade in Services: Doomed to Fail? Does it Matter?," Journal of Industry, Competition and Trade, Springer, vol. 8(3), pages 295-318, December.
  7. Bernard M. Hoekman & Aaditya Mattoo, 2013. "Liberalizing Trade in Services: Lessons from Regional and WTO Negotiations," RSCAS Working Papers 2013/34, European University Institute.
  8. Chauffour, Jean-Pierre & Maur, Jean-Christophe, 2010. "Beyond market access : the new normal of preferential trade agreements," Policy Research Working Paper Series 5454, The World Bank.
  9. Andrea Ariu & Giordano Mion, 2011. "Service Trade and Occupational Tasks: An Empirical Investigation," CEP Discussion Papers dp1107, Centre for Economic Performance, LSE.

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