The Impacts of Regional Trade Agreements in Force in Europe on Trade in Services

Abstract

Most of countries in the European continent are related to each other by a Regional Trade Agreement (RTA) that includes services. The aim of this study is to analyze the pattern of trade in services in Europe. In considering the three main important RTAs in force in Europe, I …find that the main RTAs do not have analogous impacts on trade in services. Indeed, European Union and European Economic Area are trade creating while European Free Trade Association (EFTA) does not have a significant impact on intra-members trade and is more trade diverting than the other RTAs. Moreover, new entrants have a positive propensity to trade services with the members of the EFTA. The trade impacts of a given RTA vary substantially across signatories.

Keywords: Services, Regional Trade Agreements, Trade diversion.

JEL Classification: F15