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Liberalization of trade in services: A CGE analysis for Argentina, Brazil and Uruguay


  • Chisari, Omar O.
  • Maquieyra, Javier
  • Romero, Carlos A.


In this paper we use two computable general equilibrium models to evaluate gains of liberalization of trade in services for Argentina, Brazil and Uruguay. We employ two CGE models for the calculations. For the Argentine and Uruguayan cases, we apply a model built by the authors (see Chisari (2009)) based on the MPSGE. For Brazil, our study uses the GTAP model – adapted by Rutherford (2005) that also works on an MPSGE platform. We also consider two basic cases of liberalization of trade in services: 1) mobility of goods, in which there is mobility of services across borders, as it is the traditional case of exports and imports of goods, and 2) trade presence, that is location in the domestic country of new operators with a new technology for producing services. We estimate the gains from improvements in efficiency, quality and productivity of the industries of services, due to more intense competition in the domestic market as well as from reductions in the implicit mark up on domestic services due to barriers to trade. Quality advancements lead to gains in welfare of a similar order, or even higher than expected in the case of productivity improvements. To address the case of trade presence, a latent technology is defined in situ, operative or not depending on relative prices (its market share in the overall equilibrium of the economy is endogenous). This is especially relevant for the case of telecommunications. We also observe that: 1) the economy’s specific endowment of factors will limit the expected gains of the liberalization if the latent technology is unsuitable or incompatible with them, 2) governments can face some dilemmas regarding domestic market regulations, if the liberalization of trade in financial services called for a change in regulations so that the domestic demand for government bonds were to fall.

Suggested Citation

  • Chisari, Omar O. & Maquieyra, Javier & Romero, Carlos A., 2009. "Liberalization of trade in services: A CGE analysis for Argentina, Brazil and Uruguay," MPRA Paper 15336, University Library of Munich, Germany.
  • Handle: RePEc:pra:mprapa:15336

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    References listed on IDEAS

    1. Omar Chisari & Germán Lambardi & Carlos A. Romero, 2009. "Choosing the extent of private partipation in public services: a computable general equilibrium perspective," Estudios Economicos, Universidad Nacional del Sur, Departamento de Economia, vol. 26(52), pages 29-48, january-j.
    2. Konan, Denise Eby & Van Assche, Ari, 2007. "Regulation, market structure and service trade liberalization," Economic Modelling, Elsevier, vol. 24(6), pages 895-923, November.
    3. 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, August.
    4. James R. Markusen & Thomas F. Rutherford & David Tarr, 2000. "Foreign Direct Investments in Services and the Domestic Market for Expertise," NBER Working Papers 7700, National Bureau of Economic Research, Inc.
    5. 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.
    6. Markusen, James R. & Strand, Bridget, 2007. "Trade in Business Services in General Equilibrium," CEPR Discussion Papers 6080, C.E.P.R. Discussion Papers.
    7. Chisari, Omar & Estache, Antonio & Lambardi, Germán & Romero, Carlos A., 2005. "Trade Balance Effects of Infrastructure Services Liberalization and of Their Regulation," UADE Working Papers 17_2005, Instituto de Economía, Universidad Argentina de la Empresa.
    8. Chisari, Omar & Ferro, Gustavo & González, Mariano & León, Sonia & Maquieryra, Javier & Mastronardi, Leonardo & Roitman, Mauricio & Romero, Carlos & Theller, Ricardo, 2010. "Modelo de Equilibrio General Computado para la Argentina 2006," UADE Textos de Discusión 63_2010, Instituto de Economía, Universidad Argentina de la Empresa.
    9. Balistreri, Edward J. & Rutherford, Thomas F. & Tarr, David G., 2009. "Modeling services liberalization: The case of Kenya," Economic Modelling, Elsevier, vol. 26(3), pages 668-679, May.
    10. Rutherford, Thomas & Tarr, David & Shepotylo, Oleksandr, 2005. "The impact on Russia of WTO accession and the Doha agenda : the importance of liberalization of barriers against foreign direct investment in services for growth and poverty reduction," Policy Research Working Paper Series 3725, The World Bank.
    11. Arjan Lejour & Hugo Rojas-Romagosa, 2006. "Foreign Direct Investment in Applied General Equilibrium Models: Overview of the Literature," CPB Memorandum 169, CPB Netherlands Bureau for Economic Policy Analysis.
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    Cited by:

    1. Innwon Park & Soonchan Park, 2011. "Regional Liberalisation of Trade in Services," The World Economy, Wiley Blackwell, vol. 34, pages 725-740, May.

    More about this item


    Computable general equilibrium; liberalization of trade; trade in services;

    JEL classification:

    • C68 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Computable General Equilibrium Models
    • F17 - International Economics - - Trade - - - Trade Forecasting and Simulation
    • D58 - Microeconomics - - General Equilibrium and Disequilibrium - - - Computable and Other Applied General Equilibrium Models

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