Liberalizing international trade in services: Challenges and opportunities for developing countries
AbstractSeveral developments in international trade in services impact strongly on developing countries: First, the world-wide diffusion of information technologies (IT) has created new export opportunities for developing countries in IT services. Second, the recently proclaimed Millennium Development Goals for poverty reduction can only be attained if key services are provided more efficiently in developing countries - particularly through the liberalization of service imports. Third, in the ongoing Doha Development Round (DR) of trade negotiations, developing countries are asked to formally commit to liberalizing their service imports under the terms of the General Agreement on Trade in Services (GATS). Developing countries will benefit from liberalizing service imports if liberalization enhances competition on the supply side. This is typically the case for producer services, such as domestic and international transport, financial services, and telecommunications. The lifting of restrictions on the market access by foreigners (including through direct investment) will often improve service quality or lower prices and thereby enhance the international competitiveness of downstream industries. In Doha Development Round negotiations, therefore, developing countries may find it useful to commit to liberalizing imports of producer services. By contrast, the benefits of import liberalization are less clear for some consumer services where supply is subject to network monopolies (e.g., water and energy distribution) or demand is constrained by poverty (health care, education). Here, achieving a socially optimal level of supply may require carefully calibrated government policies, possibly with international donor support. For developing countries, such sectors should not be priority areas for commitments on service imports under the GATS. Most service exports by developing countries, especially IT services transmitted electronically, face few import barriers in industrialized countries. However, under the GATS, service exports may also be delivered through temporary movement of natural persons, e.g., developing country nationals working in industrialized countries without becoming residents there. If Doha Development Round negotiations were to increase opportunities for such temporary labor migration, the benefits to developing countries could be huge. --
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by Kiel Institute for the World Economy (IfW) in its series Kiel Discussion Papers with number 412.
Date of creation: 2004
Date of revision:
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Andrei Shleifer & Robert W. Vishny, 1995.
"A Survey of Corporate Governance,"
Harvard Institute of Economic Research Working Papers
1741, Harvard - Institute of Economic Research.
- Philippa Dee & Kevin Hanslow, 2002. "Multilateral liberalisation of services trade," International Trade 0207002, EconWPA.
- Clarke, George & Cull, Robert & Martinez Peria, Maria Soledad & Sanchez, Susana M., 2001. "Foreign bank entry - experience, implications for developing countries, and agenda for further research," Policy Research Working Paper Series 2698, The World Bank.
- Olivier Boylaud & Giuseppe Nicoletti, 2000.
"Regulation, Market Structure and Performance in Telecommunications,"
OECD Economics Department Working Papers
237, OECD Publishing.
- Olivier Boylaud & Giuseppe Nicoletti, 2001. "Regulation, market structure and performance in telecommunications," OECD Economic Studies, OECD Publishing, vol. 2001(1), pages 99-142.
- La Porta, Rafael & Lopez-de-Silanes, Florencio & Shleifer, Andrei & Vishny, Robert W., 1998.
"Law and Finance,"
3451310, Harvard University Department of Economics.
- Rafael La Porta & Florencio Lopez-de-Silane & Andrei Shleifer & Robert W. Vishny, 1996. "Law and Finance," NBER Working Papers 5661, National Bureau of Economic Research, Inc.
- Rafael LaPorta & Florencio Lopez de-Silanes & Andrei Shleifer & Robert W. Vishny, 1996. "Law and Finance," Harvard Institute of Economic Research Working Papers 1768, Harvard - Institute of Economic Research.
- Markusen, James & Rutherford, Thomas F. & Tarr, David, 2000.
"Foreign direct investment in services and the domestic market for expertise,"
Policy Research Working Paper Series
2413, The World Bank.
- James R. Markusen & Thomas F. Rutherford & David Tarr, 2000. "Foreign Direct Investments in Services and the Domestic Market for Expertise," NBER Working Papers 7700, National Bureau of Economic Research, Inc.
- Demirguc-Kunt, Asli & Huizinga, Harry, 1998.
"Determinants of commercial bank interest margins and profitability : some international evidence,"
Policy Research Working Paper Series
1900, The World Bank.
- Demirguc, Asli & Huizinga, Harry, 1999. "Determinants of Commercial Bank Interest Margins and Profitability: Some International Evidence," World Bank Economic Review, World Bank Group, vol. 13(2), pages 379-408, May.
- Torsten SlÃ¸k & Michael Klein & Luca Antonio Ricci & Hali J. Edison, 2002.
"Capital Account Liberalization and Economic Performance: Survey and Synthesis,"
IMF Working Papers
02/120, International Monetary Fund.
- Hali J. Edison & Michael W. Klein & Luca Antonio Ricci & Torsten Sløk, 2004. "Capital Account Liberalization and Economic Performance: Survey and Synthesis," IMF Staff Papers, Palgrave Macmillan, vol. 51(2), pages 2.
- Hali J. Edison & Michael W. Klein & Luca Ricci & Torsten Sloek, 2002. "Capital Account Liberalization and Economic Performance: Survey and Synthesis," NBER Working Papers 9100, National Bureau of Economic Research, Inc.
- James R. Markusen, 1995. "The Boundaries of Multinational Enterprises and the Theory of International Trade," Journal of Economic Perspectives, American Economic Association, vol. 9(2), pages 169-189, Spring.
- King, Robert G & Levine, Ross, 1993.
"Finance and Growth: Schumpeter Might Be Right,"
The Quarterly Journal of Economics,
MIT Press, vol. 108(3), pages 717-37, August.
- Konan, Denise Eby & Maskus, Keith E., 2006.
"Quantifying the impact of services liberalization in a developing country,"
Journal of Development Economics,
Elsevier, vol. 81(1), pages 142-162, October.
- 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.
- Tadesse, Solomon, 2002.
"Financial Architecture and Economic Performance: International Evidence,"
Journal of Financial Intermediation,
Elsevier, vol. 11(4), pages 429-454, October.
- Solomon Tadesse, 2001. "Financial Architecture and Economic Performance: International Evidence," William Davidson Institute Working Papers Series 449, William Davidson Institute at the University of Michigan.
- Rauf Gönenç & Giuseppe Nicoletti, 2000.
"Regulation, Market Structure and Performance in Air Passenger Transportation,"
OECD Economics Department Working Papers
254, OECD Publishing.
- Rauf Gönenç & Giuseppe Nicoletti, 2001. "Regulation, market structure and performance in air passenger transportation," OECD Economic Studies, OECD Publishing, vol. 2001(1), pages 183-227.
- Dollar, David & Micco, Alejandro & Clark, Ximena, 2002. "Maritime transport costs and port efficiency," Policy Research Working Paper Series 2781, The World Bank.
- Ross Levine, 1997.
"Financial Development and Economic Growth: Views and Agenda,"
Journal of Economic Literature,
American Economic Association, vol. 35(2), pages 688-726, June.
- Levine, Ross, 1996. "Financial development and economic growth : views and agenda," Policy Research Working Paper Series 1678, The World Bank.
- Stiglitz, Joseph E, 1985. "Credit Markets and the Control of Capital," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 17(2), pages 133-52, May.
- Nunnenkamp, Peter & Pant, Manoj, 2003. "Why the case for a multilateral agreement on investment is weak," Kiel Discussion Papers 400, Kiel Institute for the World Economy (IfW).
- Nguyen, Trien & Perroni, Carlo & Wigle, Randall, 1993. "An Evaluation of the Draft Final Act of the Uruguay Round," Economic Journal, Royal Economic Society, vol. 103(421), pages 1540-49, November.
- Limao, Nuno & Venables, Anthony J., 1999. "Infrastructure, geographical disadvantage, and transport costs," Policy Research Working Paper Series 2257, The World Bank.
- Denizer, Cevdet & Desai, Raj M. & Gueorguiev, Nikolay, 1998. "The political economy of financial repression in transition economies," Policy Research Working Paper Series 2030, The World Bank.
- Langhammer, Rolf J., 2002. "Developing Countries as Exporters of Services: What Trade Statistics Suggest," Journal of Economic Integration, Center for Economic Integration, Sejong University, vol. 17, pages 297-310.
- Claessens, Stijn & Demirguc-Kunt, Asli & Huizinga, Harry, 1998. "How does foreign entry affect the domestic banking market?," Policy Research Working Paper Series 1918, The World Bank.
- M. Ayhan Kose & Kenneth Rogoff & Eswar Prasad & Shang-Jin Wei, 2003. "Effects of Financial Globalization on Developing Countries: Some Empirical Evidence," IMF Occasional Papers 220, International Monetary Fund.
- Clarke, George R. G. & Cull, Robert & Martinez Peria, Maria Soledad, 2001. "Does foreign bank penetration reduce access to credit in developing countries"evidence from asking borrowers," Policy Research Working Paper Series 2716, The World Bank.
- Hermes, Niels & Lensink, Robert, 2001. "The impact of foreign bank entry on domestic banking markets: a note," Research Report 01E62, University of Groningen, Research Institute SOM (Systems, Organisations and Management).
- repec:fip:fedhpr:y:2000:i:may:p:199-232 is not listed on IDEAS
- Peter Nunnenkamp, Julius Spatz, 2003. "Foreign Direct Investment and Economic Growth in Developing Countries: How Relevant Are Host-country and Industry Characteristics?," Kiel Working Papers 1176, Kiel Institute for the World Economy.
- Popa, Ana & Oprunenco, Alex & Lücke, Matthias & Tekce, Mahmut & Eugen, Hristev & Mincu, Georgeta & Vasilescu, Victoria & Prohnitchi, Valeriu, 2009. "A free trade area between the Repbulic of Moldova and the European Union: feasibility, perspectives and potential impact," Open Access Publications from Kiel Institute for the World Economy 28899, Kiel Institute for the World Economy (IfW).
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (ZBW - German National Library of Economics).
If references are entirely missing, you can add them using this form.