Why Do Economies Enter into Preferential Agreements on Trade in Services? Assessing the Potential for Negotiated Regulatory Convergence in Asian Services Markets

Asian Development Review 33:1, 2016

18 Pages Posted: 9 Apr 2016

See all articles by Pierre Sauvé

Pierre Sauvé

University of Bern - World Trade Institute

Anirudh Shingal

S.P. Jain Institute of Management & Research; European University Institute - Robert Schuman Centre for Advanced Studies (RSCAS); University of Bern - World Trade Institute

Date Written: April 4, 2016

Abstract

More than one-third of the World Trade Organization-notified services trade agreements that were in effect between January 2008 and August 2015 involved at least one South or Southeast Asian trading partner. Drawing on Baier and Bergstrand’s (2004) determinants of preferential trade agreements and using the World Bank’s database on the restrictiveness of domestic services regimes (Borchert, Gootiiz, and Mattoo 2012), we examine the potential for negotiated regulatory convergence in Asian services markets. Our results suggest that Asian economies with high levels of preexisting bilateral merchandise trade and wide differences in services regulatory frameworks are more likely candidates for services trade agreement formation. Such results lend support to the hypothesis that the heightened “servicification” of production generates demand for the lowered services input costs resulting from negotiated market openings.

Keywords: Asia, preferential trade agreements, regulation, regulatory convergence, services trade

JEL Classification: F10, F13, F15

Suggested Citation

Sauvé, Pierre and Shingal, Anirudh, Why Do Economies Enter into Preferential Agreements on Trade in Services? Assessing the Potential for Negotiated Regulatory Convergence in Asian Services Markets (April 4, 2016). Asian Development Review 33:1, 2016, Available at SSRN: https://ssrn.com/abstract=2759542

Pierre Sauvé (Contact Author)

University of Bern - World Trade Institute

Hallerstrasse 6
Berne, 3012
Switzerland

Anirudh Shingal

S.P. Jain Institute of Management & Research ( email )

Munshi Nagar, Dadabhai Road
Andheri West
Mumbai, Maharashtra 119579
India

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

Villa La Fonte, via delle Fontanelle 18
50016 San Domenico di Fiesole
Florence, Florence 50014
Italy

University of Bern - World Trade Institute ( email )

Hallerstrasse 6/8
Bern, 3012
Switzerland

HOME PAGE: http://www.nccr-trade.org

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