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International Competition in Services

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  • Rachel McCulloch

Abstract

Production of services now dominates economic activity in the United States and most other nations. It is thus natural to find increasing attention on the part of U.S. policymakers to international competition in service activities. Yielding to strong pressure from the United States, members of the General Agreement on Tariffs and Trade (GATT) agreed in September 1986 to include services in the new "Uruguay Round" of multilateral trade negotiations. But there remains widespread skepticism regarding the prospects for these negotiations. This paper surveys the main issues and evidence relating to U.S. international competition in services. It reviews the forces that have catapulted services to the top of the agenda for the new GATT round; the conceptual issues raised by international competition in services; the growing importance of services in U.S. production and in international transactions; the relationship of services growth to "deindustrialization" of the U.S. economy; the nature and motivation of barriers to international competition in services and their relationship to nontariff distortions of merchandise trade; and the choices awaiting U.S. officials in forthcoming bilateral and multilateral negotiations.

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Bibliographic Info

Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 2235.

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Date of creation: May 1987
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Publication status: published as McCulloch, Rachel. "International Competition in Services," The United States in the World Economy, ed. by Martin Feldstein. Chicago: UCP, 1988, pp 367-406.
Handle: RePEc:nbr:nberwo:2235

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  1. André Sapir, 1987. "North-South issues in trade in services," ULB Institutional Repository 2013/8262, ULB -- Universite Libre de Bruxelles.
  2. Robert E. Lipsey & Irving B. Kravis, 1985. "The Competitive Position of U.S. Manufacturing Firms," NBER Working Papers 1557, National Bureau of Economic Research, Inc.
  3. Alan B. Krueger & Lawrence H. Summers, 1986. "Reflections on the Inter-Industry Wage Structure," NBER Working Papers 1968, National Bureau of Economic Research, Inc.
  4. Irving B. Kravis, 1983. "Services in the Domestic Economy and in World Transactions," NBER Working Papers 1124, National Bureau of Economic Research, Inc.
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Cited by:
  1. Lawrence H. Goulder & Barry Eichengreen, 1992. "Trade Liberalization in General Equilibrium: Intertemporal and Inter-industry Effects," Canadian Journal of Economics, Canadian Economics Association, vol. 25(2), pages 253-80, May.
  2. Lawrence H. Goulder & Barry Eichengreen, 1989. "Savings Promotion, Investment Promotion, and International Competitiveness," NBER Chapters, in: Trade Policies for International Competitiveness, pages 5-52 National Bureau of Economic Research, Inc.
  3. John D. Montgomery, 1991. "Market segmentation and 1992: toward a theory of trade in financial services," International Finance Discussion Papers 394, Board of Governors of the Federal Reserve System (U.S.).

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