Financial Services Trade in Special Economic Zones
28 Pages Posted: 7 Jan 2021 Last revised: 4 Mar 2021
Date Written: December 25, 2020
The mushrooming of Special Economic Zones (SEZs) in recent years has led to a significant increase in the supply of attractive incentives for investors looking for opportunities abroad. SEZs are self-contained regimes, inextricably associated with investment promotion policies and domestic industrial policy in general, that many times form part of a broader strategic governmental planning that aims at experimenting with economic rule-making in strictly defined territorial and jurisdictional boundaries. While empirical evidence still is inconclusive, SEZs can contribute to economic development at the domestic level through a varying degree of channels. This is even more the case with services-only SEZs, a new phenomenon that exemplifies the rising important of trade in services but also the ‘servicification trend’ that drives global economic activity. Against this background, this article examines the case for services in SEZs and offers a tour d’horizon of the current services-related SEZ landscape. Furthermore, the article critically reviews the patterns, traits and limits of trade in financial services within SEZ and discusses the relevance of the General Agreement on Trade in Services (GATS) at this juncture. The article concludes with a discussion of potential development-related benefits ensuing from trade in financial services within SEZs.
Keywords: trade in services; special economic zones (SEZs); General Agreement on Trade in Services (GATS)
JEL Classification: F01, F02, F13, F15, F21, F36, G15, G18, G20, G28, K33, L51
Suggested Citation: Suggested Citation