IDEAS home Printed from https://ideas.repec.org/a/bla/worlde/v37y2014i12p1751-1772.html

The Paradox of ‘Preferences’: Regional Trade Agreements and Trade Costs in Services

Author

Listed:
  • Sébastien Miroudot
  • Ben Shepherd

Abstract

type="main" xml:id="twec12178-abs-0001"> We analyse the relationship between regional trade integration and trade costs in services. The analysis relies on theory-consistent bilateral trade costs for 55 countries for 1999–2009 and an analysis of services commitments in 66 regional trade agreements to which these countries are parties. Despite the recent proliferation of services regional trade agreements (RTAs), we find that trade costs are only slightly lower due to these agreements. In addition, we find that the trade cost reductions that do take place tend to happen before the agreement is signed. This is consistent with countries using RTAs as a way of ‘locking in’ reforms. Finally, we find that the preferential margin of services RTAs is thin: members and non-members both see slightly lower trade costs when an RTA is signed. However, the difference between the member and non-member trade cost effects is 28 per cent for services and 40 per cent for goods, indicating a slimmer margin of preference in the former case. We discuss the possible explanations for these findings in terms of the nature of services RTAs and their relationship with regulatory reform. Based on these results, we argue that regionalism in the case of services seems relatively non-discriminatory and does not lead to substantial trade preferences.

Suggested Citation

  • Sébastien Miroudot & Ben Shepherd, 2014. "The Paradox of ‘Preferences’: Regional Trade Agreements and Trade Costs in Services," The World Economy, Wiley Blackwell, vol. 37(12), pages 1751-1772, December.
    • Handle: RePEc:bla:worlde:v:37:y:2014:i:12:p:1751-1772
    as

    Download full text from publisher

    File URL: http://hdl.handle.net/10.1111/twec.2014.37.issue-12
    Download Restriction: Access to full text is restricted to subscribers.
    ---><---

    As the access to this document is restricted, you may want to look for a different version below or

    for a different version of it.

    Other versions of this item:

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Mitsuo INADA & Naoto JINJI, 2023. "The Impact of Policy Uncertainty on Foreign Direct Investment in Services: Evidence from firm-level data and the role of regional trade agreements," Discussion papers 23021, Research Institute of Economy, Trade and Industry (RIETI).
    2. Laurent Didier, 2018. "Do environmental provisions in regional trade agreements affect trade in services?," Economics Bulletin, AccessEcon, vol. 38(2), pages 733-750.
    3. Carmen Díaz‐Mora & Erena García‐López & Belén González‐Díaz, 2022. "Bilateral servicification in global value chains and deep trade agreements," The World Economy, Wiley Blackwell, vol. 45(8), pages 2510-2531, August.
    4. Woori Lee, 2017. "Services liberalization and GVC participation: New evidence for heterogeneous effects by income level and provisions," CTEI Working Papers series 08-2017, Centre for Trade and Economic Integration, The Graduate Institute.
    5. Patrick Messerlin, 2014. "Negotiating Mega-Agreements: Lessons from the EU," EUI-RSCAS Working Papers p0411, European University Institute (EUI), Robert Schuman Centre of Advanced Studies (RSCAS).
    6. Shandre Mugan Thangavelu & Wang Wenxiao & Sothea Oum, 2017. "Servicification in Global Value Chains: The Case of Asian Countries," Working Papers DP-2017-12, Economic Research Institute for ASEAN and East Asia (ERIA).
    7. Peter H. Egger & Johannes Schwarzer, 2020. "The effects of services trade policies. Introduction to the special issue," The World Economy, Wiley Blackwell, vol. 43(11), pages 2826-2829, November.
    8. Messerlin, Patrick, 2015. "The Services Dimension of TTIP," CEPS Papers 10550, Centre for European Policy Studies.
    9. Van Der Marel,Erik Leendert & Shepherd,Ben, 2020. "Trade Facilitation in Services : Concepts and Empirical Importance," Policy Research Working Paper Series 9234, The World Bank.
    10. Bernard Hoekman, 2014. "Sustaining multilateral trade cooperation in a multipolar world economy," The Review of International Organizations, Springer, vol. 9(2), pages 241-260, June.
    11. Laurent Didier, 2020. "Comparing the Impacts of Some North-North and North-South Trade Agreements on Trade in Services [Comparaison des impacts des accords commerciaux Nord-Nord et Nord-Sud sur le commerce des services]," Post-Print hal-03665971, HAL.
    12. Hoekman, Bernard & Shepherd, Ben, 2021. "Services Trade Policies and Economic Integration: New Evidence for Developing Countries," World Trade Review, Cambridge University Press, vol. 20(1), pages 115-134, February.
    13. Patrick Messerlin, 2014. "Negotiating Mega-Agreements: Lessons from the EU," RSCAS Working Papers 2014/112, European University Institute.
    14. Su, Xiaoyan & Anwar, Sajid & Zhou, Ying & Tang, Xuan, 2020. "Services trade restrictiveness and manufacturing export sophistication," The North American Journal of Economics and Finance, Elsevier, vol. 51(C).
    15. Yulin Hou, 2023. "Deep trade agreements and trade costs," The World Economy, Wiley Blackwell, vol. 46(12), pages 3571-3595, December.
    16. Milena Kern & Jörg Paetzold & Hannes Winner, 2021. "Cutting red tape for trade in services," The World Economy, Wiley Blackwell, vol. 44(10), pages 2858-2886, October.
    17. Andrea Goldstein & Alessia Amighini & Bernard Hoekman, 2016. "Revitalizing the Global Trading System: What Could the G20 Do?," China & World Economy, Institute of World Economics and Politics, Chinese Academy of Social Sciences, vol. 24(4), pages 34-54, July.
    18. Holladay, J. Scott & Mohsin, Mohammed & Pradhan, Shreekar, 2018. "Emissions leakage, environmental policy and trade frictions," Journal of Environmental Economics and Management, Elsevier, vol. 88(C), pages 95-113.
    19. Holladay, J. Scott & Mohsin, Mohammed & Pradhan, Shreekar, 2016. "Emissions Leakage, Environmental Policy and Trade Frictions," Conference papers 332677, Purdue University, Center for Global Trade Analysis, Global Trade Analysis Project.

    More about this item

    JEL classification:

    • F15 - International Economics - - Trade - - - Economic Integration
    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:bla:worlde:v:37:y:2014:i:12:p:1751-1772. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Wiley Content Delivery (email available below). General contact details of provider: http://www.blackwellpublishing.com/journal.asp?ref=0378-5920 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.