Exploring intra-commonwealth goods and services trade

A background paper for the Commonwealth Secretariat by Anirudh Shingal and Mohammad Razzaque: Existing work examining the trade effect of commonwealth membership does not account for sample selection, unobserved heterogeneity and multilateral resistance in estimation, leading to biased estimates. Our analyses improve on all these fronts. Unlike earlier work, we also consider services trade and assemble a much larger sample of trading partners (242 x 242, over 1995-2010). Commonwealth membership is found to increase goods exports by 18.5-33.2% and services exports by 42.8% in our results, ceteris paribus and on average. Our analyses on the determinants of intra-commonwealth trade suggest the positive role of common language (only for goods trade) and colonial relationships as well as the negative impact of geography, thereby confirming that commonwealth member states are not natural trading partners for each other. Finally, being one of Australia, Canada or the UK is associated with 98.2% greater merchandise trade than the commonwealth average; however, a similar effect is not observed for services trade.

The Preferential Liberalization of Trade in Services: African Perspectives And Challenges

This chapter takes stock of the state of play of preferential trade negotiations in services in Africa. It explores the factors that lie behind the reluctance of African governments to bind service sector policy under international treaties. The chapter chronicles several ongoing initiatives aimed at deepening intra-regional trade and investment among the eight regional economic cooperation areas found on the continent. It also describes external liberalization efforts engaging Africa with the rest of the world in services trade, devoting particular attention to negotiations underway with the European Community (EC) with a view to concluding WTO-compatible Economic Partnership Agreements (EPAs). The chapter draws attention to several novel features of the EC-CARIFORUM EPA in the services field and discusses its possible implications for Africa’s ongoing processes of integration in services markets at both the intra- and extra-regional levels. The chapter concludes with a broader discussion of a range of policy challenges confronting African governments in designing development-enhancing strategies of engagement in services trade negotiations.