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The evolution of services trade policy since the Great Recession

Author

Listed:
  • Borchert, Ingo
  • Magdeleine, Joscelyn
  • Marchetti, Juan A.
  • Mattoo, Aaditya
Abstract
Are changes in services markets provoking reform, restrictions, or inertia? To address this question, we draw upon a new World Bank-WTO Services Trade Policy Database (STPD) to analyse the services trade policies of 68 economies in 23 subsectors across five broad areas - financial services, telecommunications, distribution, transportation and professional services, respectively. Policy measures are quantified into a Services Trade Restrictions Index (STRI) following a novel, consistent and transparent framework. Building on these innovations, the paper identifies patterns of services trade policies across sectors and economies, as well as secular trends over the past decade. Higher income economies are still more open on average than developing economies, but the chronology of reform differs markedly across sectors. In telecommunications and finance, we see convergence towards greater openness driven by liberalization in the previously more restrictive developing economies. In the hitherto universally protected transport and professional services, we see policy divergence as some higher income economies pioneer reform. But while explicit restrictions are being lowered in most services sectors - in contrast to recent developments in goods trade policy - we also see greater recourse to regulatory scrutiny, especially in higher income economies. These measures could reflect legitimate prudential or security concerns, but they could also reflect recourse to less transparent forms of protection.

Suggested Citation

  • Borchert, Ingo & Magdeleine, Joscelyn & Marchetti, Juan A. & Mattoo, Aaditya, 2020. "The evolution of services trade policy since the Great Recession," WTO Staff Working Papers ERSD-2020-02, World Trade Organization (WTO), Economic Research and Statistics Division.
    • Handle: RePEc:zbw:wtowps:ersd202002
    DOI: 10.30875/ba44f0d7-en
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    References listed on IDEAS

    as
    1. Borchert, Ingo & Gootiiz, Batshur & Magdeleine, Joscelyn & Marchetti, Juan A. & Mattoo, Aaditya & Rubio, Ester & Shannon, Evgeniia, 2019. "Applied services trade policy: A guide to the Services Trade Policy Database and the Services Trade Restrictions Index," WTO Staff Working Papers ERSD-2019-14, World Trade Organization (WTO), Economic Research and Statistics Division.
    2. Ingo Borchert & Batshur Gootiiz & Aaditya Mattoo, 2014. "Policy Barriers to International Trade in Services: Evidence from a New Database," The World Bank Economic Review, World Bank, vol. 28(1), pages 162-188.
    3. Alessandro Barattieri & Ingo Borchert & Aaditya Mattoo, 2016. "Cross-border mergers and acquisitions in services: The role of policy and industrial structure," Canadian Journal of Economics, Canadian Economics Association, vol. 49(4), pages 1470-1501, November.
    4. Raghuram G. Rajan, 2010. "Fault Lines: How Hidden Fractures Still Threaten the World Economy," Economics Books, Princeton University Press, edition 1, number 9111.
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    Cited by:

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    2. Hein Roelfsema & Christopher Findlay & Xianjia Ye, 2021. "Decomposing International Trade in Commercial Services," Foreign Trade Review, , vol. 56(3), pages 238-256, August.
    3. Anderson, Kym, 2022. "Trade-related food policies in a more volatile climate and trade environment," Food Policy, Elsevier, vol. 109(C).

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    More about this item

    Keywords

    services trade policy; investment; STRI; trade restrictions; quantification;
    All these keywords.

    JEL classification:

    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business
    • L80 - Industrial Organization - - Industry Studies: Services - - - General
    • O24 - Economic Development, Innovation, Technological Change, and Growth - - Development Planning and Policy - - - Trade Policy; Factor Movement; Foreign Exchange Policy

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