Working Paper: NBER ID: w22362
Authors: Daqing Yao; John Whalley
Abstract: This paper argues that the pursuit of special and differential treatments (SDT) by developing countries has hampered the liberalization of global service trade, which is one of the causes of the only slowing improving of service efficiency globally. We use value added per worker as a proxy of production efficiency, and show the growth rate of service efficiency is much lower than agriculture and industry. Despite the progress in world commodity market integration in past half century, the world service market remains highly segmented, which can be seen clearly from the World Bank’s STRD index and CHB index. We argue that the SDT negotiation contributes to the service market segment, and give three reasons on why it is difficult for developing countries to be granted SDT in service. In the last part we present some suggestions on trade negotiations in the future.
Keywords: Global Service Efficiency; Special and Differential Treatment; Service Trade Liberalization
JEL Codes: F13; F42; F55; F61
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| special and differential treatment (SDT) (F13) | segmented service market (L80) |
| segmented service market (L80) | lower service efficiency (L87) |
| special and differential treatment (SDT) (F13) | lower service efficiency (L87) |
| SDT negotiations (F13) | barriers to service trade (F13) |
| barriers to service trade (F13) | segmented service market (L80) |