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GTAP Resource #3818

"Estimation of Tariff Equivalents for the Services Sector"
by Mitaritonna, Maria Cristina

Services is the largest sector in the global economy, representing 70% of world added value and over
half of total employment. However its share in total international trade is only 21%, in part due to the
high level of regulatory protection in domestic markets for services. Simulations relying on Computable
General Equilibrium (CGE) modeling point to large gains associated with the partial liberalization of
services in the rich economies, but also in some developing countries. Since these estimations rely on
tariff equivalents of protection on services, accurate measure of the level of protection on services are a
crucial issue for policy makers.

One problem lies in the specific nature of services compared to goods. Proximity between producer and
consumer and the intangible characteristics intrinsic to services produce different impediments to trade
in services from those that apply to goods. They include limitations such as quotas, licences, interdictions
of some activities to foreigners, and government regulations designed to reduce market access to
foreign services and/or discriminate in favor of domestic firms. Hence, liberalizing national trade in
services essentially requires a change in national regulation. Identifying the actual tariff equivalents of
these regulations is not straightforward. Data on actual policies are scarce and transforming qualitative
information into a quantitative measure of protection is difficult. Therefore, we depart from the inventory
approach used to build indexes of the restrictiveness of policies in the service sector, and also from
the so-called two-stage method, in which information on barriers faced by exporters of services on their
destination markets is used to explain international differences in price-cost margins within the services

The context is appropriate for an indirect approach consisting of computing tariff equivalents and revealing
protection by comparing ...

Resource Details (Export Citation) GTAP Keywords
Category: 2012 Conference Paper
Status: Published
By/In: Presented at the 15th Annual Conference on Global Economic Analysis, Geneva, Switzerland
Date: 2011
Created: Mitaritonna, M. (4/25/2012)
Updated: Batta, G. (4/30/2012)
Visits: 1,319
- Preferential trading arrangements
- Trade in services

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