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Trade Effects of Services Trade Liberalization in the EU

Author

Listed:
  • Joseph Francois

    (Johannes Kepler University Linz)

  • Olga Pindyuk

    (wiiw (Vienna))

  • Julia Woerz

    (Austrian National Bank (OENB))

Abstract

This paper gives a quantitative assessment of possible trade and welfare effects resulting from different trade liberalization scenarios within the EU. First, we econometrically estimate the existing services trade barriers in the EU (inside the EU and with respect to the third countries). Then we run simulations to estimate effects of the currently achieved liberalization of cross-border trade in services inside the EU, and of the elimination of the remaining trade barriers. The simulations are based on the GTAP model, a computable general equilibrium model. We use the GTAP database V7 (pre-release, benchmarked to 2004) and own estimates of protection in the services sector. Our findings point towards larger gains from more comprehensive cuts in trade barriers. We further observe a reinforcement of specialization patterns, with the new members intensifying their position as EuropeÕs manufacturing base and the old members specializing increasingly in services.

Suggested Citation

  • Joseph Francois & Olga Pindyuk & Julia Woerz, 2008. "Trade Effects of Services Trade Liberalization in the EU," IIDE Discussion Papers 20080801, Institue for International and Development Economics.
    • Handle: RePEc:lnz:wpaper:20080801
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    References listed on IDEAS

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    1. Paul Conway & Véronique Janod & Giuseppe Nicoletti, 2005. "Product Market Regulation in OECD Countries: 1998 to 2003," OECD Economics Department Working Papers 419, OECD Publishing.
    2. Sherman Robinson & Zhi Wang & Will Martin, 2002. "Capturing the Implications of Services Trade Liberalization," Economic Systems Research, Taylor & Francis Journals, vol. 14(1), pages 3-33.
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    5. Julia Woerz & Olga Pindyuk, 2008. "Trade in Services: Note on the Measurement and Quality of Data Sources," FIW Research Reports series I-001, FIW.
    6. Hertel, Thomas W. & Swaminathan, Padma V., 1996. "Introducing Monopolistic Competition Into The Gtap Model," Technical Papers 28704, Purdue University, Center for Global Trade Analysis, Global Trade Analysis Project.
    7. Carmen Fillat Castej�n & Joseph F. Francois & Julia Woerz, 2008. "Trade through FDI: investing in services," Documentos de Trabajo dt2008-06, Facultad de Ciencias Económicas y Empresariales, Universidad de Zaragoza.
    8. Julia Nielson & Daria Taglioni, 2004. "Services Trade Liberalisation: Identifying Opportunities and Gains," OECD Trade Policy Papers 1, OECD Publishing.
    9. Mattoo, Aaditya & Rathindran, Randeep, 2006. "Measuring Services Trade Liberalization and Its Impact on Economic Growth: An Illustration," Journal of Economic Integration, Center for Economic Integration, Sejong University, vol. 21, pages 64-98.
    10. Joseph Francois & Hans Van Meijl & Frank Van Tongeren, 2005. "Trade liberalization in the Doha Development Round [Trade in Manufactures, the Outcome of the Uruguay Round and Developing Country Interests]," Economic Policy, CEPR, CESifo, Sciences Po;CES;MSH, vol. 20(42), pages 350-391.
    11. Francois, Joseph F., 1998. "Scale Economies And Imperfect Competition In The Gtap Model," Technical Papers 28718, Purdue University, Center for Global Trade Analysis, Global Trade Analysis Project.
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    16. Paul Conway & Giuseppe Nicoletti, 2006. "Product Market Regulation in the Non-Manufacturing Sectors of OECD Countries: Measurement and Highlights," OECD Economics Department Working Papers 530, OECD Publishing.
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    Cited by:

    1. Innwon Park & Soonchan Park, 2011. "Regional Liberalisation of Trade in Services," The World Economy, Wiley Blackwell, vol. 34, pages 725-740, May.
    2. Oliver Fritz & Gerhard Streicher, 2008. "Trade Effects of Service Liberalization in the EU. Simulation of Regional Macroeconomic Effects for Austria," WIFO Studies, WIFO, number 34221, April.
    3. Egger, Peter & Larch, Mario & Staub, Kevin E, 2012. "Trade Preferences and Bilateral Trade in Goods and Services: A Structural Approach," CEPR Discussion Papers 9051, C.E.P.R. Discussion Papers.

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    More about this item

    Keywords

    trade restrictions; trade liberalization; computable general equilibrium modelling; services trade.;
    All these keywords.

    JEL classification:

    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • F21 - International Economics - - International Factor Movements and International Business - - - International Investment; Long-Term Capital Movements

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