Determinants of Services Trade Agreement Membership

60 Pages Posted: 1 Jul 2018

See all articles by Peter H. Egger

Peter H. Egger

Ifo Institute for Economic Research - International Trade and Foreign Direct Investment; ETH Zürich; Ludwig-Maximilians University of Munich; CESifo (Center for Economic Studies and Ifo Institute for Economic Research)

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: June 2018

Abstract

Since about a decade, we have seen a surge in interest as well as in the use of services preferentialism and unilateral services regulations. This paper provides an economic explanation of services regulation and services preferentialism, including their interaction. The paper derives hypotheses based on a numerical welfare analysis where tradable services are treated as a secondary (produced) input in the production of tradable goods. Apart from hypotheses on the emergence of services trade agreements (STAs), the paper derives ones on the stringency of unilateral services provision- a general services trade restrictiveness. For instance, one of the hypotheses is that services trade restrictiveness is endogenous, and it is aligned with economic fundamentals. Another hypothesis suggests that countries are more likely to participate in STAs if the partners' general, unilateral services trade restrictiveness is more similar to theirs. These and other hypotheses are supported by data.

Keywords: Services trade agreements; Services trade restrictiveness; Preferential trade liberalization; Services trade; Economic determinants of trade liberalization

JEL Classification: F10; F13; F15

Suggested Citation

Egger, Peter H. and Shingal, Anirudh, Determinants of Services Trade Agreement Membership (June 2018). Robert Schuman Centre for Advanced Studies Research Paper No. RSCAS 2018/29, Available at SSRN: https://ssrn.com/abstract=3195814 or http://dx.doi.org/10.2139/ssrn.3195814

Peter H. Egger (Contact Author)

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Anirudh Shingal

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

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