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Services policies in transition economies: on the EU and WTO as commitment mechanisms

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  • ESCHENBACH, FELIX
  • HOEKMAN, BERNARD

Abstract

We analyze the extent to which the EU-15 and 16 transition economies used the WTO General Agreement on Trade in Services (GATS) to commit to service sector policy reforms. GATS commitments are compared with the evolution of actual policy stances over time. While there is substantial variance across transition economies on both actual policies and GATS commitments, we find an inverse relationship between the depth of GATS commitments and the ‘quality’ of actual services policies as assessed by the private sector. In part this can be explained by the fact that the prospect of EU accession makes GATS less relevant as a commitment device for a subset of transition economies. However, for many of the non-EU accession candidates the WTO seems to be a weak commitment device. One explanation is that the small size of the markets concerned generates weak external enforcement incentives. Our findings suggest greater collective investment by WTO members in monitoring and transparency is needed to increase the benefits of WTO membership to small countries.

Suggested Citation

  • Eschenbach, Felix & Hoekman, Bernard, 2006. "Services policies in transition economies: on the EU and WTO as commitment mechanisms," World Trade Review, Cambridge University Press, vol. 5(3), pages 415-443, November.
    • Handle: RePEc:cup:wotrrv:v:5:y:2006:i:03:p:415-443_00
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    References listed on IDEAS

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    1. Rolf J. Langhammer, 2005. "The EU Offer of Service Trade Liberalization in the Doha Round: Evidence of a Not‐Yet‐Perfect Customs Union," Journal of Common Market Studies, Wiley Blackwell, vol. 43(2), pages 311-325, June.
    2. Felix Eschenbach & Bernard Hoekman, 2006. "Services Policy Reform and Economic Growth in Transition Economies," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 142(4), pages 746-764, December.
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    Cited by:

    1. Isabelle Rabaud & Thierry Montalieu, 2006. "Trade in Services : how does it Work for MENA Countries?," Post-Print halshs-00204977, HAL.
    2. Kyle Bagwell & Chad P. Bown & Robert W. Staiger, 2016. "Is the WTO Passé?," Journal of Economic Literature, American Economic Association, vol. 54(4), pages 1125-1231, December.
    3. Bown, Chad P. & Bernard M., Hoekman, 2007. "Developing countries and enforcement of trade agreements : why dispute settlement is not enough," Policy Research Working Paper Series 4450, The World Bank.
    4. Massimo Armenise & Giorgia Giovannetti & Gianluca Santoni, 2011. "FDI in Business Services has general TFP effects : evidence from Italy," Working Papers - Economics wp2011_12.rdf, Universita' degli Studi di Firenze, Dipartimento di Scienze per l'Economia e l'Impresa.
    5. Manders, Ton & Bollen, Johannes & Dave, Rutu, 2007. "Trade sanctions and Climate Policy," Conference papers 331617, Purdue University, Center for Global Trade Analysis, Global Trade Analysis Project.
    6. Brian Tavonga Mazorodze & Devi Datt Tewari, 2018. "Impact of Chinese, Korean and Japanese Innovation Spillover on Labour Productivity in South African Manufacturing," Journal of Economics and Behavioral Studies, AMH International, vol. 10(5), pages 16-28.
    7. Staiger, Robert & Bagwell, Kyle & Bown, Chad, 2015. "Is the WTO Passé?," CEPR Discussion Papers 10672, C.E.P.R. Discussion Papers.
    8. Ivana Prica & Jelica Petrović Vujačić, 2010. "Financial Services Liberalisation in Transition Countries and the Role of the WTO," Panoeconomicus, Savez ekonomista Vojvodine, Novi Sad, Serbia, vol. 57(4), pages 487-501, December.
    9. Adlung, Rudolf, 2009. "Trade in healthcare and health insurance services: The GATS as a supporting actor (?)," WTO Staff Working Papers ERSD-2009-15, World Trade Organization (WTO), Economic Research and Statistics Division.
    10. Quamrul Alam & Mohammad Abu Yusuf & Ken Coghill, 2010. "Unilateral liberalisation and WTO GATS commitments: the telecommunications sector in selected countries," Asian-Pacific Economic Literature, The Crawford School, The Australian National University, vol. 24(1), pages 43-64, May.
    11. Hoekman, Bernard & Mattoo, Aaditya, 2008. "Services trade and growth," Policy Research Working Paper Series 4461, The World Bank.

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    JEL classification:

    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations

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