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Service trade liberalization as a handmaiden of competitiveness in manufacturing: An industrialized or developing country issue?

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  • Langhammer, Rolf J.

Abstract

This paper discusses the issue whether developing countries forego chances in world manufactured markets by protecting intermediate services against market entry of new suppliers. By scanning the empirical literature on effective rates of protection (ERP), the evidence is supportive. Yet, it seems more the indirect effect via expanding the service sector in total through liberalization and deregulation than the direct effect of lowering ERP in intermediate service industries for downstream manufacturing industries which is relevant. Developed countries on the other hand enjoy a much lower level of protection in important intermediate services like banking and telecom and thus these industries can be instrumental to help downstream manufacturing industries in adjustment and restructuring. It is argued that especially in the EU competition in intermediate services will further rise due to various EU-policy rooted factors. As a result, protection rates of services in individual EU countries will converge.

Suggested Citation

  • Langhammer, Rolf J., 2006. "Service trade liberalization as a handmaiden of competitiveness in manufacturing: An industrialized or developing country issue?," Kiel Working Papers 1293, Kiel Institute for the World Economy (IfW Kiel).
    • Handle: RePEc:zbw:ifwkwp:1293
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    File URL: https://www.econstor.eu/bitstream/10419/3877/1/kap1293.pdf
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    References listed on IDEAS

    as
    1. James Markusen & Thomas F. Rutherford & David Tarr, 2017. "Trade and direct investment in producer services and the domestic market for expertise," World Scientific Book Chapters, in: Trade Policies for Development and Transition, chapter 19, pages 439-458, World Scientific Publishing Co. Pte. Ltd..
    2. Patrick A. Messerlin, 2001. "Measuring the Costs of Protection in Europe: European Commercial Policy in the 2000s," Peterson Institute Press: All Books, Peterson Institute for International Economics, number 102, October.
    3. Patrick Messerlin, 2001. "Measuring the costs of protection in Europe : European commercial policy in the 2000s," Post-Print hal-03394451, HAL.
    4. Jeffrey J. Schott, 2000. "WTO after Seattle, The," Peterson Institute Press: All Books, Peterson Institute for International Economics, number 317, October.
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    Cited by:

    1. Panizzon, Marion & Sieber-Gasser, Charlotte, 2010. "Legal Framework for Cross-Regional Networks: The Case of Services and Migration," Papers 98, World Trade Institute.

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    More about this item

    Keywords

    Services; Effective Rates of Protection; Trade Liberalization;
    All these keywords.

    JEL classification:

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

    Statistics

    Access and download statistics

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