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The EU offer of service trade liberalization in the Doha Round: evidence of a not-yet-perfect customs union

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  • Langhammer, Rolf J.

Abstract

While the EU is a customs union in merchandise trade (goods), it has not yet reached this stage of integration in service trade. Trade policies between individual Member States and non-Member States vary in services. Given the remaining national sovereignties in regulating service trade against other EU Member States also, the EU is not yet even a free trade area. How far the EU is from a customs union in service trade is very difficult to assess because of the non-quantitative nature of trade restrictions in this sector. This article gives a first hint of the distance from a customs union by calculating frequency indices of trade measures by refining the 1995 Hoekman index. The database is the EU's first offer in service trade in the WTO Doha round in February 2003. It emerges that the deviation from a customs union is not substantial, but still exists because of differences in national policies against non-Member States which are particularly relevant in the mode of supply via labour flows. Inter alia, policy measures comprise economic needs tests, residence and nationality criteria. The article concludes that there is reason to assume that, in the course of the Doha round negotiations, some if not most of the national measures will be given up. Therefore, multilateral trade negotiations will be instrumental in bringing the EU to a complete customs union as happened in goods trade between 1958 and 1968 when the Dillon and Kennedy rounds helped to complete the customs union in industrial goods.

Suggested Citation

  • 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).
  • Handle: RePEc:zbw:ifwkie:3509
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    References listed on IDEAS

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    1. Julio.J. Nogués & Andrzej Olechowski & L. Alan Winters, 2015. "The Extent of Nontariff Barriers to Industrial Countries' Imports," World Scientific Book Chapters,in: Non-Tariff Barriers, Regionalism and Poverty Essays in Applied International Trade Analysis, chapter 2, pages 29-47 World Scientific Publishing Co. Pte. Ltd..
    2. Brown, Drusilla K & Stern, Robert M, 2001. "Measurement and Modeling of the Economic Effects of Trade and Investment Barriers in Services," Review of International Economics, Wiley Blackwell, vol. 9(2), pages 262-286, May.
    3. Finger, J M & Kreinin, M E, 1979. "A Measure of 'Export Similarity' and Its Possible Uses," Economic Journal, Royal Economic Society, vol. 89(356), pages 905-912, December.
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    Cited by:

    1. Thierry MONTALIEU & Isabelle RABAUD, 2006. "Trade in Services: How does it Work for MENA Countries?," LEO Working Papers / DR LEO 1688, Orleans Economics Laboratory / Laboratoire d'Economie d'Orleans (LEO), University of Orleans.
    2. Joseph Francois & Bernard Hoekman, 2010. "Services Trade and Policy," Journal of Economic Literature, American Economic Association, vol. 48(3), pages 642-692, September.
    3. Nadine Behncke, 2013. "Assessing the impact of European Integration on sectoral trade in services," FIW Working Paper series 109, FIW.
    4. Carolina Lennon, 2008. "Trade in services: Cross-border trade vs commercial presence. Evidence of complementarity," PSE Working Papers halshs-00586217, HAL.
    5. Giuseppe Bertola & Lorenza Mola, 2010. "Services Provision and Temporary Mobility: Freedoms and Regulation in the EU," The World Economy, Wiley Blackwell, vol. 33(4), pages 633-653, April.
    6. Bernard Hoekman & Aaditya Mattoo & André Sapir, 2007. "The political economy of services trade liberalization: a case for international regulatory cooperation?," Oxford Review of Economic Policy, Oxford University Press, vol. 23(3), pages 367-391, Autumn.
    7. Christen, Elisabeth & Francois, Joseph & Hoekman, Bernard, 2012. "CGE modeling of market access in services," Policy Research Working Paper Series 6106, The World Bank.
    8. BERNARD HOEKMAN & ÇAĞLAR ÖZDEN, 2010. "The Euro-Mediterranean Partnership: Trade in Services as an Alternative to Migration?," Journal of Common Market Studies, Wiley Blackwell, vol. 48, pages 835-857, September.
    9. Bianka Dettmer, 2012. "The European Union's service directive: Contrasting ex ante estimates with empirical evidence," Jena Economic Research Papers 2012-019, Friedrich-Schiller-University Jena.
    10. Rolf J. Langhammer, 2010. "Unordnung in der internationalen Handelsordnung: Befunde, Gründe, Auswirkungen und Therapien," Perspektiven der Wirtschaftspolitik, Verein für Socialpolitik, vol. 11(1), pages 75-98, February.
    11. Eschenbach, Felix & Hoekman, Bernard, 2006. "Services policies in transition economies : on the European Union and the World Trade Organization as commitment mechanisms," Policy Research Working Paper Series 3951, The World Bank.
    12. Christen, Elisabeth & Francois, Joseph & Hoekman, Bernard, 2013. "Computable General Equilibrium Modeling of Market Access in Services," Handbook of Computable General Equilibrium Modeling, Elsevier.
    13. Eschenbach, Felix & Hoekman, Bernard, 2006. "Services policies in transition economies: on the EU and WTO as commitment mechanisms," World Trade Review, Cambridge University Press, vol. 5(03), pages 415-443, November.
    14. Bianka Dettmer, 2012. "Business services outsourcing and economic growth: Evidence from a dynamic panel data approach," Jena Economic Research Papers 2012-049, Friedrich-Schiller-University Jena.
    15. Langhammer, Rolf J., 2008. "Why a market place must not discriminate: The case against a US-EU free trade agreement," Kiel Working Papers 1407, Kiel Institute for the World Economy (IfW).

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