The Political Economy of Services Trade Liberalization: A Case for International Regulatory Cooperation?

35 Pages Posted: 30 May 2008

See all articles by Bernard Hoekman

Bernard Hoekman

European University Institute - Robert Schuman Centre for Advanced Studies (RSCAS); Centre for Economic Policy Research (CEPR); Economic Research Forum (ERF)

Aaditya Mattoo

World Bank - Development Research Group (DECRG)

Andre Sapir

Université Libre de Bruxelles (ULB) - European Center for Advanced Research in Economics and Statistics (ECARES); Bruegel; Centre for Economic Policy Research (CEPR)

Multiple version iconThere are 2 versions of this paper

Date Written: September 2007

Abstract

Little progress has been made since the creation of the WTO in expanding and deepening the coverage of services liberalization commitments. This paper identifies and discusses five hypotheses that may explain the absence of dynamism: (i) technological changes allow ever more services to be traded cross-border unaffected by policy; (ii) strong incentives to pursue liberalization on an autonomous basis (unilaterally); (iii) perceptions that bilateral or regional cooperation are a good substitute for the WTO; (iv) standard political economy factors such as adjustment costs and resistance by incumbents to erosion of rents; and (v) concerns that the WTO will affect the ability of regulators to enforce national norms. We argue that all of these explanations play a role, and that some of these factors significantly impede the scope for reciprocal exchanges of 'concessions', the engine of WTO negotiations.

Keywords: Doha Round, GATS, political economy, trade in services, trade negotiations, WTO

JEL Classification: F13

Suggested Citation

Hoekman, Bernard and Mattoo, Aaditya and Sapir, Andre, The Political Economy of Services Trade Liberalization: A Case for International Regulatory Cooperation? (September 2007). CEPR Discussion Paper No. DP6457, Available at SSRN: https://ssrn.com/abstract=1138570

Bernard Hoekman (Contact Author)

European University Institute - Robert Schuman Centre for Advanced Studies (RSCAS) ( email )

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Centre for Economic Policy Research (CEPR)

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Economic Research Forum (ERF) ( email )

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Aaditya Mattoo

World Bank - Development Research Group (DECRG) ( email )

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Andre Sapir

Université Libre de Bruxelles (ULB) - European Center for Advanced Research in Economics and Statistics (ECARES) ( email )

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Bruegel ( email )

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Centre for Economic Policy Research (CEPR)

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United Kingdom

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