Erik van der Marel

Services Trade, Regulation and Regional Integration: Evidence from Sectoral Data

Regulatory measures constitute a significant barrier to cross-border services trade in sectors including transport, communications, business services, insurance, and recreation. However, regulation has weaker effects on trade in financial services, distribution, and construction. Entry barriers and conduct regulations have heterogeneous effects across sectors, as do particular measures such as licensing requirements, economic needs tests, restrictions on business form, and limitations on advertising. In addition, regional trade agreements (RTAs) are trade creating in communications, finance, and distribution, but have only weak effects in other sectors. Contrary to findings for goods markets, trade diversion is relatively limited for services RTAs.

Trade in Services and TFP: The Role of Regulation

What determines total factor productivity (TFP) growth in services: is it services trade or services–trade regulation? To respond to this question, we use four indicators of international trade in services since 1990 to 2005, namely foreign direct investment (FDI) inward stock, services imports, domestic sales of foreign affiliates (FATS) and FDI inflows, to examine what type of services trade forms a direct determinant. Subsequently, we analyse what type of sector�?specific regulation has played an inhibiting effect on services TFP growth. Such analysis contrasts with former studies in which mainly factor inputs and economy�?wide regulation are used to explain services TFP. This paper provides evidence that neither trade nor entry barriers are robust determinants to explain cross�?country differences. Instead, regulations on operational procedures affecting the variables costs structure of the firm seem to play a more important role in explaining TFP growth between countries, particularly in combination with information and communication technology (ICT) capital.

International Tradability Indices for Services

This paper uses a theoretically grounded model of international trade to estimate the cross-border tradability of services. The resulting indices cover up to 99 countries and ten sectors. The results show that information and communications technology capital and legal institutions are particularly important determinants of a countrys ability to successfully export services. The tradability indices are strongly correlated with outcome indicators, such as trade shares of individual countries. In addition, they are strongly correlated with important inputs, including country productivity and size, factor endowments, trade costs, and regulatory measures. In particular, the results suggest that a more restrictive regulatory environment significantly reduces the international tradability of services.

Polly wants a Doha deal: what does the trade community think?

After ten years of negotiations, the Doha ‘Round is on the verge of collapse. At this difficult juncture, it is interesting to get a sense of the mood and thinking of the trade community on three key questions1:1.How serious is the situation?2.What are the causes of the current stalemate?3.What are the best solution(s)Two recent fora give an opportunity to analyze the answers of 71 observers to these questions at a crucial time, namely the month preceding the collapse of expectations that Doha might be completed by the end of 2011 (from April 1 to May 2, 2011). The CUTS Trade Forum (2011) triggered by Jagdish Bhagwatis op.ed. ‘Polly Wants a Doha Deal’ offered an open discussion forum where the 57 self-selected respondents could make their remarks with no pre-established format. The VoxEU (2011) e-book ‘Why World Leaders Must Resist the False Promise of a Doha Delay’ gathered short chapters written by 14 authors chosen by the e-book editors and willing to contribute. The respondents (all of them with a long experience in trade matters) include academics (25), former and current negotiators (9), lawyers (4), journalists (3), business (3), national civil servants (2) and trade policy experts (25 in total, of whom six are working in international institutions and nine in think tanks). Participants came from all continents: Africa (1), Asia (6), Europe (23), North America (15), Latin America (6), with a few countries particularly well represented (11 from the USA, 4 from Canada, 3 from Australia). The 17 respondents based in Geneva represent a wide range of nationalities.