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A different approach to WTO negotiations in services

  • Henk Kox

    ()

  • Arjan Lejour

    ()

International negotiations on the liberalisation of service trade are concentrated at non-tariff barriers (NTBs). National government measures form important obstacles for service providers when they want to access foreign markets. International studies predict substantial welfare benefits from removing trade obstacles for services. Negotiations on lowering these obstacles are complicated because government regulations are seldom strictly oriented at keeping foreign firms out their domestic service markets. Some of them (e.g. quantity-based restrictions) are clearly at odds with WTO principles. We argue however that in most cases regulators primarily aimed at correcting domestic market failures with disregard for the potential repercussions for foreign providers of services. In negotiations this problem can be approached by introducing economic necessity tests, but that is a very long and tedious process. We propose a different negotiation approach based on lessons learned from WTO negotiations on agricultural support measures.

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Paper provided by CPB Netherlands Bureau for Economic Policy Analysis in its series CPB Discussion Paper with number 36.

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Date of creation: Jul 2004
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Handle: RePEc:cpb:discus:36
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  1. Philippa Dee & Kevin Hanslow & Tiem Phamduc, 2003. "Measuring the Cost of Barriers to Trade in Services," NBER Chapters, in: Trade in Services in the Asia Pacific Region, NBER East Asia Seminar on Economics (EASE), Volume 11, pages 11-46 National Bureau of Economic Research, Inc.
  2. Devashish Mitra, 1999. "Endogenous Lobby Formation and Endogenous Protection: A Long-Run Model of Trade Policy Determination," American Economic Review, American Economic Association, vol. 89(5), pages 1116-1134, December.
  3. Chadha, R. & Brown, D.K. & Deardorff, A.V. & Stern, R.M., 2000. "Computational Analysis of the Impact on India of the Uruguay Round and the Forthcoming WTO Trade Negotiations," Working Papers 459, Research Seminar in International Economics, University of Michigan.
  4. Ethier, Wilfred J, 1982. "National and International Returns to Scale in the Modern Theory of International Trade," American Economic Review, American Economic Association, vol. 72(3), pages 389-405, June.
  5. Walmsley, Terrie L. & Winters, L. Alan, 2005. "Relaxing the Restrictions on the Temporary Movement of Natural Persons: A Simulation Analysis," Journal of Economic Integration, Center for Economic Integration, Sejong University, vol. 20, pages 688-726.
  6. Drusilla K. Brown & Alan V. Deardorff & Robert M. Stern, 2001. "CGE Modeling and Analysis of Multilateral and Regional Negotiating Options," Discussion Papers Series, Department of Economics, Tufts University 0108, Department of Economics, Tufts University.
  7. Bernard Hoekman & Carlos Braga, 1997. "Protection and Trade in Services: A Survey," Open Economies Review, Springer, vol. 8(3), pages 285-308, July.
  8. Markusen, James R, 1989. "Trade in Producer Services and in Other Specialized Intermediate Inputs," American Economic Review, American Economic Association, vol. 79(1), pages 85-95, March.
  9. Sherman Robinson & Zhi Wang & Will Martin, 2002. "Capturing the Implications of Services Trade Liberalization," Economic Systems Research, Taylor & Francis Journals, vol. 14(1), pages 3-33.
  10. John Whalley, 2004. "Assessing the Benefits to Developing Countries of Liberalisation in Services Trade," The World Economy, Wiley Blackwell, vol. 27(8), pages 1223-1253, 08.
  11. Rayner, A J & Ingersent, K A & Hine, R C, 1993. "Agriculture in the Uruguay Round: An Assessment," Economic Journal, Royal Economic Society, vol. 103(421), pages 1513-27, November.
  12. George Verikios & Xiao-guang Zhang, 2001. "Global Gains from Liberalising Trade in Telecommunications and Financial Services," Others 0110005, EconWPA.
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