The Political Economy of Services Trade Liberalization: A Case for International Regulatory Cooperation?

Posted: 25 Jun 2008

See all articles by Bernard Hoekman

Bernard Hoekman

Robert Schuman Centre for Advanced Studies; European University Institute - Robert Schuman Centre for Advanced Studies (RSCAS); Centre for Economic Policy Research (CEPR)

Aaditya Mattoo

World Bank - Development Research Group (DECRG)

André Sapir

Université Libre de Bruxelles (ULB) - European Center for Advanced Research in Economics and Statistics (ECARES); Bruegel; Centre for Economic Policy Research (CEPR)

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Date Written: Autumn 2007

Abstract

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.

Keywords: GATS, WTO, services trade, trade negotiations, Doha Round, F13

Suggested Citation

Hoekman, Bernard and Mattoo, Aaditya and Sapir, Andre, The Political Economy of Services Trade Liberalization: A Case for International Regulatory Cooperation? (Autumn 2007). Oxford Review of Economic Policy, Vol. 23, Issue 3, pp. 367-391, 2007. Available at SSRN: https://ssrn.com/abstract=1151136 or http://dx.doi.org/10.1093/oxrep/grm024

Bernard Hoekman (Contact Author)

Robert Schuman Centre for Advanced Studies ( email )

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European University Institute - Robert Schuman Centre for Advanced Studies (RSCAS) ( email )

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Andre Sapir

Université Libre de Bruxelles (ULB) - European Center for Advanced Research in Economics and Statistics (ECARES) ( email )

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