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Why do Countries enter into Preferential Agreements on Trade in Services? Assessing the Potential for Negotiated Regulatory Convergence in Asian Services Markets

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  • Sauvé, Pierre

    (World Trade Institute, University of Bern, Switzerland)

  • Shingal, Anirudh

    (World Trade Institute, University of Bern, Switzerland)

Abstract

More than half of the World Trade Organization (WTO)-notified services trade agreements (STAs) in effect since 2008 have involved at least one (South or Southeast) Asian trading partner. Drawing on Baier and Bergstrand’s (2004) determinants of preferential trade agreements and using the World Bank’s database on the restrictiveness of domestic services regimes (Borchert et.al. 2012), we examine the potential for negotiated regulatory convergence in Asian services markets. Our results suggest that countries within Asia that are more remote from the rest of the world and that have similar economic sizes, greater differences in relative factor endowments compared to the rest of the world, common legal origins, high levels of preexisting trade, and restrictive services regulations are more likely candidates for regulatory convergence. Our empirical model successfully predicts 10 of the 14 STAs negotiated during 2008–12 and 88 of the 89 dyads within Asia that lack an STA.

Suggested Citation

  • Sauvé, Pierre & Shingal, Anirudh, 2014. "Why do Countries enter into Preferential Agreements on Trade in Services? Assessing the Potential for Negotiated Regulatory Convergence in Asian Services Markets," Working Papers on Regional Economic Integration 129, Asian Development Bank.
  • Handle: RePEc:ris:adbrei:0129
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    Cited by:

    1. Peter Egger & Anirudh Shingal, 2021. "Determinants of services trade agreement membership," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 157(1), pages 21-64, February.
    2. Anirudh Shingal, 2016. "Colonial legacy, services trade and LDCs," RSCAS Working Papers 2016/70, European University Institute.
    3. Egger, Peter & MILE 02, Anirudh Shingal, 2014. "Determinants of services trade agreements," Papers 721, World Trade Institute.
    4. MILE 02, Anirudh Shingal & Roy, Martin & Sauvé, Pierre, 2014. "Are Asian services markets optimal regulatory convergence areas?," Papers 719, World Trade Institute.

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    More about this item

    Keywords

    PTAs; services; regulation; regulatory convergence; Asia;
    All these keywords.

    JEL classification:

    • F10 - International Economics - - Trade - - - General
    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
    • F15 - International Economics - - Trade - - - Economic Integration

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