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

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.

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

More than a third of the World Trade Organization (WTO)-notified services trade agreements (STAs) in effect over January 2008 - August 2015 have 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 et.al. 2012), we examine the potential for negotiated regulatory convergence in Asian services markets. Our results suggest that countries within Asia with high levels of pre-existing bilateral merchandise trade and wide differences in services regulatory frameworks are more likely candidates for STA formation. Such results lend support to the hypothesis that the heightened "servicification" of production generates a demand for the lowered service input costs resulting from negotiated market opening.

Why do countries enter into preferential agreements on trade in Services? assessing the potential for negotiated regulatory convergence in asian Services markets

Presentation made by Pierre Sauvé and Anirudh Shingal at the Asian International Economists Network (AIEN) Workshop, Asian Development Bank, Manila.

GATS and the Regulation of Trade in Services

This collection of essays takes stock of the key challenges that have arisen since the entry into force of the General Agreement on Trade in Services in the mid-1990s and situates them in the context of the WTO's Doha Development Agenda and the proliferation of preferential agreements addressing services today. The multidisciplinary approach provides an opportunity for many of the world's leading experts and a number of new analytical voices to exchange ideas on the future of services trade and regulation. Cosmopolitan approaches to the treatment of labour mobility, the shape of services trade disciplines in the digital age and pro-competitive regulation in air transport are explored with a view to helping readers gain a better understanding of the forces shaping the changes. An essential read for all those concerned with the evolution of the rules-based trading system and its impact on the service economy.