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Services trade liberalization and regulatory reform : re-invigorating international cooperation

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  • Hoekman, Bernard
  • Mattoo, Aaditya

Abstract

Trade and investment in services are inhibited by a range of policy restrictions, but the best offers so far in the Doha negotiations are on average twice as restrictive as actual policy. They will generate no additional market opening. Regulatory concerns help explain the limited progress. This paper develops two proposals to enhance the prospects for both liberalization of services trade and regulatory reform. The first is for governments to create mechanisms ("services knowledge platforms") to bring together regulators, trade officials, and stakeholders to discuss services regulatory reform. Such mechanisms could identify reform priorities and opportunities for utilization of"aid for trade"resources, thereby putting in place the preconditions for future market opening. The second proposal is for a new approach to negotiations in the World Trade Organization, with a critical mass of countries that account for the bulk of services production agreeing to lock-in applied levels of protection and pre-committing to reform of policies affecting foreign direct investment and international movement for individual service providers -- two areas where current policy is most restrictive and potential benefits from liberalization are greatest. If these proposals cannot be fully implemented in the Doha time frame, then any Doha agreement could at least lay the basis for a forward-looking program of international cooperation along the proposed lines.

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Bibliographic Info

Paper provided by The World Bank in its series Policy Research Working Paper Series with number 5517.

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Date of creation: 01 Jan 2011
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Handle: RePEc:wbk:wbrwps:5517

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Keywords: Trade and Services; Public Sector Corruption&Anticorruption Measures; Emerging Markets; Economic Theory&Research; ICT Policy and Strategies;

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  1. Mattoo, Aaditya & Wunsch, Sacha, 2004. "Pre-empting protectionism in services - the WTO and outsourcing," Policy Research Working Paper Series 3237, The World Bank.
  2. Joseph Francois & Julia Woerz, 2008. "Producer Services, Manufacturing Linkages, and Trade," Journal of Industry, Competition and Trade, Springer, vol. 8(3), pages 199-229, December.
  3. Charles Sabel & Sanjay Reddy, 2007. "Learning to Learn: Undoing the Gordian Knot of Development Today," Challenge, M.E. Sharpe, Inc., vol. 50(5), pages 73-92, October.
  4. Arnold, Jens & Javorcik, Beata & Lipscomb, Molly & Mattoo, Aaditya, 2010. "Services Reform and Manufacturing Performance: Evidence from India," CEPR Discussion Papers 8011, C.E.P.R. Discussion Papers.
  5. 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.
  6. Will Martin & Patrick Messerlin, 2007. "Why is it so difficult? Trade liberalization under the Doha Agenda," Oxford Review of Economic Policy, Oxford University Press, vol. 23(3), pages 347-366, Autumn.
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Cited by:
  1. World Bank, 2012. "World Development Report 2013," World Bank Publications, The World Bank, number 11843.
  2. Fan, Ying, 2011. "Services Policy Reform in the People’s Republic of China: Before and After the Global Financial Crisis," ADBI Working Papers 304, Asian Development Bank Institute.
  3. Philippa Dee, 2011. "Promoting Domestic Reforms Through Regionalism," Crawford School Research Papers 1107, Crawford School of Public Policy, The Australian National University.
  4. Klaus Deutsch, 2011. "Doha or Dada: The World Trade Regime at an Historic Crossroads," Working Papers id:4292, eSocialSciences.

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