Working Paper: CEPR ID: DP749
Authors: Bernard M. Hoekman
Abstract: At the same time as regional agreements to liberalize trade in services were being pursued by OECD countries, services were also introduced onto the agenda of a multilateral trade negotiation - the Uruguay Round. This paper focuses on the relationship between regional agreements and the draft General Agreement on Trade in Services (GATS), negotiated under the auspices of the Uruguay Round. Following a conceptual discussion of the political economy of regional as opposed to multilateral negotiations, I analyse existing data on trade and investment flows with a view to gaining some insight into the likely interest group preferences influencing the choice between alternative institutional arrangements to liberalize trade in services. Both the data and a comparison of the content of the major existing agreements suggest that service industries are more likely to see regional and multilateral liberalization as complements than substitutes.
Keywords: trade in services; regional trade agreements; multilateral negotiations
JEL Codes: F13
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| regional and multilateral liberalization of trade in services (F13) | service industries perceive them as complements (L89) |
| revealed comparative advantage (F11) | preferences for different institutional arrangements (D72) |
| foreign direct investment (FDI) in services (F21) | preference for multilateral liberalization (F13) |
| outward-oriented service industries (L89) | preference for multilateral liberalization (F13) |
| marginal costs of offering access to additional countries (D40) | perception of low costs in multilateral context (F69) |