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Services Policies in Transition Economies: On the EU and WTO as Commitment Mechanisms

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  • Eschenbach, Felix
  • Hoekman, Bernard

Abstract

We analyze the extent to which the EU-15 and 16 transition economies used the WTO General Agreement on Trade in Services (GATS) to commit to service sector policy reforms. GATS commitments are compared with the evolution of actual policy stances over time. While there is substantial variance across transition economies on both actual policies and GATS commitments, we find an inverse relationship between the depth of GATS commitments and the 'quality' of actual services policies as assessed by the private sector. In part this can be explained by the fact that the prospect of EU accession makes GATS less relevant as a commitment device for a subset of transition economies. However, for many of the non-EU accession candidates the WTO seems to be a weak commitment device. One explanation is that the small size of the markets concerned generates weak external enforcement incentives. Our findings suggest greater collective investment by WTO members in monitoring and transparency is needed to increase the benefits of WTO membership to small countries.

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Paper provided by C.E.P.R. Discussion Papers in its series CEPR Discussion Papers with number 5624.

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Date of creation: Apr 2006
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Handle: RePEc:cpr:ceprdp:5624

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Keywords: accession; EU; services liberalization; trade agreements; WTO transition economies;

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References

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  1. Kyle Bagwell & Robert W. Staiger, 2004. "The Economics of the World Trading System," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262524341, December.
  2. Rolf J. Langhammer, 2005. "The EU Offer of Service Trade Liberalization in the Doha Round: Evidence of a Not-Yet-Perfect Customs Union," Journal of Common Market Studies, Wiley Blackwell, vol. 43(2), pages 311-325, 06.
  3. Felix Eschenbach & Bernard Hoekman, 2006. "Services Policy Reform and Economic Growth in Transition Economies," Review of World Economics (Weltwirtschaftliches Archiv), Springer, vol. 142(4), pages 746-764, December.
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Cited by:
  1. Bown, Chad P. & Bernard M., Hoekman, 2007. "Developing countries and enforcement of trade agreements : why dispute settlement is not enough," Policy Research Working Paper Series 4450, The World Bank.
  2. Hoekman, Bernard & Mattoo, Aaditya, 2008. "Services trade and growth," Policy Research Working Paper Series 4461, The World Bank.
  3. Ivana Prica & Jelica Petrović VujaÄić, 2010. "Financial Services Liberalisation in Transition Countries and the Role of the WTO," Panoeconomicus, Savez ekonomista Vojvodine, Novi Sad, Serbia, vol. 57(4), pages 487-501, December.
  4. Massimo Armenise & Giorgia Giovannetti & Gianluca Santoni, 2011. "FDI in Business Services has general TFP effects : evidence from Italy," Working Papers - Economics wp2011_12.rdf, Universita' degli Studi di Firenze, Dipartimento di Scienze per l'Economia e l'Impresa.

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