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The political economy of services trade liberalization: a case for international regulatory cooperation?

  • André Sapir
  • Bernard Hoekman
  • Aaditya Mattoo

Little progress has been made since the creation of the WTO on 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 allowing 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. Copyright © The Author 2007. Published by Oxford University Press.

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Paper provided by ULB -- Universite Libre de Bruxelles in its series ULB Institutional Repository with number 2013/8098.

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Date of creation: 2007
Date of revision:
Publication status: Published in: Oxford Review of Economic Policy (2007) v.23,p.367-391
Handle: RePEc:ulb:ulbeco:2013/8098
Note: SCOPUS: ar.j
Contact details of provider: Postal: CP135, 50, avenue F.D. Roosevelt, 1050 Bruxelles
Web page: http://difusion.ulb.ac.be

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  1. Langhammer, Rolf J., 2005. "The EU offer of service trade liberalization in the Doha Round : evidence of a not-yet-perfect customs union," Open Access Publications from Kiel Institute for the World Economy 3509, Kiel Institute for the World Economy (IfW).
  2. Patrick Messerlin, 2005. "The Directive on Services: Rent Seekers Strike Back," Sciences Po publications info:hdl:2441/8131, Sciences Po.
  3. 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.
  4. Mattoo, Aaditya, 2005. "Services in a development round : three goals and three proposals," Policy Research Working Paper Series 3718, The World Bank.
  5. repec:spo:wpecon:info:hdl:2441/8131 is not listed on IDEAS
  6. 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.
  7. 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.
  8. 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.
  9. Hoekman, Bernard, 2006. "Liberalizing trade in services : a survey," Policy Research Working Paper Series 4030, The World Bank.
  10. Konan, Denise Eby & Maskus, Keith E., 2003. "Quantifying the impact of services liberalization in a developing country," Policy Research Working Paper Series 3193, The World Bank.
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