IDEAS home Printed from https://ideas.repec.org/p/zbw/ifwkwp/1385.html
   My bibliography  Save this paper

Sectoral distortions and service protection in Russia: A comparison with benchmark emerging markets and EU accession candidates

Author

Listed:
  • Langhammer, Rolf J.

Abstract

Recent empirical research on efficiency gains for Russia from WTO membership concludes that service trade liberalization especially through allowing foreign suppliers to invest in Russian service industries promises the largest gains. This points to sizable efficiency deficits in the Russian service sector. This paper departs from the question whether both the Russian sectoral protection structure and the effective rates of protection (ERPs) differ from structures and rates in benchmark countries if tax equivalents for intermediate services are taken into account. The result is that almost all Russian service industries get effectively taxed and not protected once not only tax equivalents of intermediate goods but also those of intermediate services are included in ERP calculation. Variance among industries and peak taxes in service industries are significantly higher than in a median emerging country taken as benchmark. These findings support the key role of intermediate services liberalization for the expansion of a viable Russian service sector. Results from comparing Russian effective rates of protection with those of the EU accession countries Bulgaria and Romania are not inclusive. Tax levels of the two accession countries are also high and variant and thus cannot serve as a proxy for the 'economic distance of Russia to Brussels'. Lessons for European Neighborhood Policy point to the requirement for the EU to liberalize bilateral service trade (through mode 3 supply: commercial presence ) on a quid pro quo base: without opening EU markets for Russian companies in specific services (i.e., energy distribution), Russia will probably not open its service sector for EU suppliers more than is required in order to comply with minimum WTO accession prerequisites.

Suggested Citation

  • Langhammer, Rolf J., 2007. "Sectoral distortions and service protection in Russia: A comparison with benchmark emerging markets and EU accession candidates," Kiel Working Papers 1385, Kiel Institute for the World Economy (IfW Kiel).
    • Handle: RePEc:zbw:ifwkwp:1385
    as

    Download full text from publisher

    File URL: https://www.econstor.eu/bitstream/10419/4081/1/kap1385.pdf
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Nora Dihel & Ben Shepherd, 2007. "Modal Estimates of Services Barriers," OECD Trade Policy Papers 51, OECD Publishing.
    2. 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..
    3. Jesper Jensen & Thomas Rutherford & David Tarr, 2014. "The Impact of Liberalizing Barriers to Foreign Direct Investment in Services: The Case of Russian Accession to the World Trade Organization," World Scientific Book Chapters, in: APPLIED TRADE POLICY MODELING IN 16 COUNTRIES Insights and Impacts from World Bank CGE Based Projects, chapter 6, pages 125-149, World Scientific Publishing Co. Pte. Ltd..
    4. Philippa Dee, 2007. "East Asian Economic Integration and its Impact on Future Growth," The World Economy, Wiley Blackwell, vol. 30(3), pages 405-423, March.
    5. Jesper Jensen & Thomas Rutherford & Thomas Rutherford & Thomas Rutherford, 2006. "The Importance of Telecommunications Reform in Russia's Accession to the WTO," Eastern European Economics, Taylor & Francis Journals, vol. 44(1), pages 25-58, February.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. World Bank, 2011. "Russia : Reshaping Economic Geography," World Bank Publications - Reports 13052, The World Bank Group.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Edward J. Balistreri & Zoryana Olekseyuk & David G. Tarr, 2017. "Privatisation and the unusual case of Belarusian accession to the WTO," The World Economy, Wiley Blackwell, vol. 40(12), pages 2564-2591, December.
    2. 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 and Oxford Review of Economic Policy Limited, vol. 23(3), pages 367-391, Autumn.
    3. Tarr, David, 2012. "Impact of services liberalization on industry productivity, exports and development : six empirical studies in the transition countries," Policy Research Working Paper Series 6023, The World Bank.
    4. Latorre, Maria C., 2014. "CGE analysis of the impact of foreign direct investment and tariff reform on female and male wages," Policy Research Working Paper Series 7073, The World Bank.
    5. Konan, Denise Eby & Van Assche, Ari, 2007. "Regulation, market structure and service trade liberalization," Economic Modelling, Elsevier, vol. 24(6), pages 895-923, November.
    6. JESPER JENSEN & Thomas F. Rutherford & David G. Tarr, 2014. "Modeling Services Liberalization: The Case of Tanzania," World Scientific Book Chapters, in: APPLIED TRADE POLICY MODELING IN 16 COUNTRIES Insights and Impacts from World Bank CGE Based Projects, chapter 9, pages 191-222, World Scientific Publishing Co. Pte. Ltd..
    7. Edward J. Balistreri & Zoryana Olekseyuk & David G. Tarr, 2017. "Privatisation and the unusual case of Belarusian accession to the WTO," The World Economy, Wiley Blackwell, vol. 40(12), pages 2564-2591, December.
    8. Arjan Lejour & Hugo Rojas-Romagosa, 2006. "Foreign Direct Investment in Applied General Equilibrium Models: Overview of the Literature," CPB Memorandum 169, CPB Netherlands Bureau for Economic Policy Analysis.
    9. Balistreri, Edward J. & Rutherford, Thomas F. & Tarr, David G., 2009. "Modeling services liberalization: The case of Kenya," Economic Modelling, Elsevier, vol. 26(3), pages 668-679, May.
    10. Balistreri, Edward J. & Olekseyuk, Zoryana & Tarr, David G., 2016. "The Impact of WTO Accession and Complementary Structural Reforms on the Economy of Belarus: A Quantitative Evaluation," Conference papers 332696, Purdue University, Center for Global Trade Analysis, Global Trade Analysis Project.
    11. Christoph Böhringer & Thomas F. Rutherford & David G. Tarr & Natalia Turdyeva, 2017. "Market Structure and the Environmental Implications of Trade Liberalization: Russia’s Accession to the World Trade Organization," World Scientific Book Chapters, in: Trade Policies for Development and Transition, chapter 20, pages 459-485, World Scientific Publishing Co. Pte. Ltd..
    12. Jesper Jensen & David Tarr, 2014. "Deep Trade Policy Options for Armenia: The Importance of Trade Facilitation, Services and Standards Liberalization," World Scientific Book Chapters, in: APPLIED TRADE POLICY MODELING IN 16 COUNTRIES Insights and Impacts from World Bank CGE Based Projects, chapter 19, pages 453-508, World Scientific Publishing Co. Pte. Ltd..
    13. Georges, Patrick & Mérette, Marcel, 2011. "Trade Diversification Away from the U.S. or North American Customs Union? A Review of Canada’s Trade Policy Options," Conference papers 332084, Purdue University, Center for Global Trade Analysis, Global Trade Analysis Project.
    14. Joseph Francois & Ian Wooton, 2010. "Market Structure and Market Access," The World Economy, Wiley Blackwell, vol. 33(7), pages 873-893, July.
    15. Han, Shengfei & Wang, Wei, 2014. "WTO accession, impediments to FDI, and the market opening of basic telecom services in China," China Economic Review, Elsevier, vol. 29(C), pages 68-81.
    16. Thomas F. Rutherford & David G. Tarr, 2014. "Regional Impacts of Liberalization of Barriers against Foreign Direct Investment in Services: The Case of Russia's Accession to the WTO," World Scientific Book Chapters, in: APPLIED TRADE POLICY MODELING IN 16 COUNTRIES Insights and Impacts from World Bank CGE Based Projects, chapter 7, pages 151-167, World Scientific Publishing Co. Pte. Ltd..
    17. María C. Latorre, 2009. "The economic analysis of multinationals and foreign direct investment: a review," Hacienda Pública Española / Review of Public Economics, IEF, vol. 191(4), pages 97-126, December.
    18. Olekseyuk, Zoryana, 2015. "The EU-Ukraine Deep and Comprehensive Free Trade Agreement and the Importance of FDI," Conference papers 332588, Purdue University, Center for Global Trade Analysis, Global Trade Analysis Project.
    19. Cretegny, Laurent, 2009. "The Economics of Adaptation to Climate Change - An Integrated Assessment Framework," Conference papers 331822, Purdue University, Center for Global Trade Analysis, Global Trade Analysis Project.
    20. Tarr, David G., 2013. "Putting Services and Foreign Direct Investment with Endogenous Productivity Effects in Computable General Equilibrium Models," Handbook of Computable General Equilibrium Modeling, in: Peter B. Dixon & Dale Jorgenson (ed.), Handbook of Computable General Equilibrium Modeling, edition 1, volume 1, chapter 0, pages 303-377, Elsevier.

    More about this item

    Keywords

    Liberalization; Russia; European Neighborhood; Service Trade;
    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

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:zbw:ifwkwp:1385. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: ZBW - Leibniz Information Centre for Economics (email available below). General contact details of provider: https://edirc.repec.org/data/iwkiede.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.