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Services Trade Liberalization and Regulatory Reform: Re-invigorating International Cooperation

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  • Hoekman, Bernard
  • Mattoo, Aaditya

Abstract

Trade and investment in services is inhibited by a range of policy restrictions, but the best offers so far in the Doha negotiations are on average twice as restrictive as actual policy. They will generate no additional market opening. Regulatory concerns help explain the limited progress. We develop two proposals to enhance the prospects for both liberalization of services trade and regulatory reform. The first is for governments to create mechanisms ('services knowledge platforms') to bring together regulators, trade officials and stakeholders to discuss services regulatory reform. Such mechanisms could identify reform priorities and opportunities for utilization of 'aid for trade' resources, thereby putting in place the preconditions for future market opening. The second proposal is for a new approach to negotiations in the WTO, with a critical mass of countries that account for the bulk of services production agreeing to lock-in applied levels of protection and pre-committing to reform of policies affecting FDI and international movement for individual service providers--two areas where current policy is most restrictive and potential benefits from liberalization are greatest. If these proposals cannot be fully implemented in the Doha time frame, then any Doha agreement could at least lay the basis for a forward-looking program of international cooperation along the proposed lines.

Suggested Citation

  • Hoekman, Bernard & Mattoo, Aaditya, 2011. "Services Trade Liberalization and Regulatory Reform: Re-invigorating International Cooperation," CEPR Discussion Papers 8181, C.E.P.R. Discussion Papers.
  • Handle: RePEc:cpr:ceprdp:8181
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    References listed on IDEAS

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    1. Mattoo, Aaditya & Wunsch, Sacha, 2004. "Pre-empting protectionism in services - the WTO and outsourcing," Policy Research Working Paper Series 3237, The World Bank.
    2. Jens Matthias Arnold & Beata Javorcik & Molly Lipscomb & Aaditya Mattoo, 2016. "Services Reform and Manufacturing Performance: Evidence from India," Economic Journal, Royal Economic Society, vol. 126(590), pages 1-39, February.
    3. Jens Matthias Arnold & Aaditya Mattoo & Gaia Narciso, 2008. "Services Inputs and Firm Productivity in Sub-Saharan Africa: Evidence from Firm-Level Data," Journal of African Economies, Centre for the Study of African Economies (CSAE), vol. 17(4), pages 578-599, August.
    4. Patrick Messerlin & Erik Van Der Marel, 2012. "The Dynamics of Transatlantic Negotiations in Services," Working Papers hal-01073752, HAL.
    5. Will Martin & Patrick Messerlin, 2007. "Why is it so difficult? Trade liberalization under the Doha Agenda," Oxford Review of Economic Policy, Oxford University Press, vol. 23(3), pages 347-366, Autumn.
    6. Charles Sabel & Sanjay Reddy, 2007. "Learning to Learn: Undoing the Gordian Knot of Development Today," Challenge, Taylor & Francis Journals, vol. 50(5), pages 73-92.
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    Cited by:

    1. Crozet, M. & Milet, E. & Mirza, D., 2013. "The Discriminatory Effect of Domestic Regulations on International Trade in Services: Evidence from Firm-Level Data," Working papers 451, Banque de France.
    2. World Bank, 2012. "World Development Report 2013
      [Informe anual del Banco Mundial de 2013 : poner fin a la pobreza extrema, promover la prosperidad compartida - informe principal]
      ," World Bank Publications, The World Bank, number 11843.
    3. Fan, Ying, 2011. "Services Policy Reform in the People’s Republic of China: Before and After the Global Financial Crisis," ADBI Working Papers 304, Asian Development Bank Institute.
    4. Philippa Dee, 2011. "Promoting Domestic Reforms Through Regionalism," Crawford School Research Papers 1107, Crawford School of Public Policy, The Australian National University.
    5. Klaus Deutsch, 2011. "Doha or Dada: The World Trade Regime at an Historic Crossroads," Working Papers id:4292, eSocialSciences.

    More about this item

    Keywords

    aid for trade; development assistance; GATS; international negotiations; knowledge platforms; services regulation; trade agreements; trade liberalization; WTO;

    JEL classification:

    • F1 - International Economics - - Trade
    • F2 - International Economics - - International Factor Movements and International Business
    • F5 - International Economics - - International Relations, National Security, and International Political Economy
    • L80 - Industrial Organization - - Industry Studies: Services - - - General

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