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The Political Economy of Services Trade Liberalization: A Case for International Regulatory Cooperation?

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  • Hoekman, Bernard
  • Mattoo, Aaditya
  • Sapir, André

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

Paper provided by C.E.P.R. Discussion Papers in its series CEPR Discussion Papers with number 6457.

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Date of creation: Sep 2007
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Handle: RePEc:cpr:ceprdp:6457

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Keywords: Doha Round; GATS; political economy; trade in services; trade negotiations; WTO;

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References

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  1. 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).
  2. Jens Matthias Arnold & Aaditya Mattoo & Gaia Narciso, 2008. "Services Inputs and Firm Productivity in Sub-Saharan Africa: Evidence from Firm-Level Data," Journal of African Economies, Centre for the Study of African Economies (CSAE), vol. 17(4), pages 578-599, August.
  3. repec:spo:wpecon:info:hdl:2441/8131 is not listed on IDEAS
  4. 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.
  5. 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.
  6. Hoekman, Bernard, 2006. "Liberalizing trade in services : a survey," Policy Research Working Paper Series 4030, The World Bank.
  7. Mattoo, Aaditya, 2005. "Services in a development round : three goals and three proposals," Policy Research Working Paper Series 3718, The World Bank.
  8. 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.
  9. Patrick Messerlin, 2005. "The Directive on Services: Rent Seekers Strike Back," Sciences Po publications info:hdl:2441/8131, Sciences Po.
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Citations

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Cited by:
  1. 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.
  2. Bernard M. Hoekman & Aaditya Mattoo, 2013. "Liberalizing Trade in Services: Lessons from Regional and WTO Negotiations," RSCAS Working Papers 2013/34, European University Institute.
  3. Dee, Philippa & McNaughton, Anne, 2011. "Promoting Domestic Reforms through Regionalism," ADBI Working Papers 312, Asian Development Bank Institute.
  4. 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.
  5. Rolf J. Langhammer, 2009. "Unordnung in der Internationalen Handelsordnung. Befunde, Gründe, Auswirkungen und Therapien," Kiel Working Papers 1533, Kiel Institute for the World Economy.
  6. Ariu, Andrea & Mion, Giordano, 2012. "Service Trade and Occupational Tasks: An Empirical Investigation," CEPR Discussion Papers 8761, C.E.P.R. Discussion Papers.
  7. 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.
  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. 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.

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