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The Political Economy of Services Trade Liberalization: A Case for International Regulatory Cooperation?

  • Hoekman, Bernard
  • Mattoo, Aaditya
  • Sapir, André

Little progress has been made since the creation of the WTO in expanding and deepening the coverage of services liberalization commitments. This paper identifies and discusses five hypotheses that may explain the absence of dynamism: (i) technological changes allow ever more services to be traded cross-border unaffected by policy; (ii) strong incentives to pursue liberalization on an autonomous basis (unilaterally); (iii) perceptions that bilateral or regional cooperation are a good substitute for the WTO; (iv) standard political economy factors such as adjustment costs and resistance by incumbents to erosion of rents; and (v) concerns that the WTO will affect the ability of regulators to enforce national norms. We argue that all of these explanations play a role, and that some of these factors significantly impede the scope for reciprocal exchanges of ‘concessions’—the engine of WTO negotiations.

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Paper provided by C.E.P.R. Discussion Papers in its series CEPR Discussion Papers with number 6457.

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Date of creation: Sep 2007
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Handle: RePEc:cpr:ceprdp:6457
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  1. James Markusen & Thomas Rutherford & David Tarr, 2005. "Trade and direct investment in producer services and the domestic market for expertise," Canadian Journal of Economics, Canadian Economics Association, vol. 38(3), pages 758-777, August.
  2. Patrick Messerlin, 2005. "The Directive on Services: Rent Seekers Strike Back," Post-Print hal-01020771, HAL.
  3. Barth, James R. & Marchetti, Juan A. & Nolle, Daniel E. & Sawangngoenyuang, Wanvimol, 2006. "Foreign banking: Do countries' WTO commitments match actual practices?," WTO Staff Working Papers ERSD-2006-11, World Trade Organization (WTO), Economic Research and Statistics Division.
  4. Rudolf Adhung, 2005. "Turning Hills into Mountains?Current Commitments under the GATS and Prospects for Change," Working Papers id:280, eSocialSciences.
  5. Hoekman, Bernard, 2006. "Liberalizing trade in services : a survey," Policy Research Working Paper Series 4030, The World Bank.
  6. 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.
  7. 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.
  8. Mattoo, Aaditya, 2005. "Services in a development round : three goals and three proposals," Policy Research Working Paper Series 3718, The World Bank.
  9. Patrick Messerlin, 2005. "The Directive on Services: Rent Seekers Strike Back," Sciences Po publications info:hdl:2441/8131, Sciences Po.
  10. 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, 06.
  11. Hoekman, Bernard & Mattoo, Aaditya, 2006. "Services, Economic Development and the Doha Round: Exploiting the Comparative Advantage of the WTO," CEPR Discussion Papers 5628, C.E.P.R. Discussion Papers.
  12. repec:spo:wpecon:info:hdl:2441/8131 is not listed on IDEAS
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