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Market Structure in Services and Market Access in Goods

Author

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  • Joseph Francois

    () (Faculty of Economics, Erasmus Universiteit Rotterdam, and CEPR)

  • Ian Wooton

    (Strathclyde University, and CEPR)

Abstract

We examine interaction between trade in goods and market power in domestic trade and distribution, developing a model that highlights this interaction. Theory points to an expected linkage between service sector competition and goods trade, one supported by econometrics involving import patterns of 21 OECD countries vis-à-vis 86 trading partners. This points to significant linkages between effective market access conditions for goods and the structure of the service sector. Because of the implied interaction, ignoring the structure of the domestic service sector may lead to a substantial underestimation of the direct impact of tariffs on trade flows.

Suggested Citation

  • Joseph Francois & Ian Wooton, 2004. "Market Structure in Services and Market Access in Goods," Tinbergen Institute Discussion Papers 04-050/2, Tinbergen Institute.
  • Handle: RePEc:tin:wpaper:20040050
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    References listed on IDEAS

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    6. Marcelo Olarreaga & Çaglar Özden, 2005. "AGOA and Apparel: Who Captures the Tariff Rent in the Presence of Preferential Market Access?," The World Economy, Wiley Blackwell, vol. 28(1), pages 63-77, January.
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    Cited by:

    1. Joseph Francois & Bernard Hoekman & Miriam Manchin, 2006. "Preference Erosion and Multilateral Trade Liberalization," World Bank Economic Review, World Bank Group, pages 197-216.
    2. Hoekman. Bernard & Prowse, Susan, 2005. "Economic policy responses to preference erosion : from trade as aid toaid for trade," Policy Research Working Paper Series 3721, The World Bank.

    More about this item

    Keywords

    market access; services trade; trade liberalization; competition policy; imperfect competition; GATS;

    JEL classification:

    • F12 - International Economics - - Trade - - - Models of Trade with Imperfect Competition and Scale Economies; Fragmentation
    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
    • F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business

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