GTAP Resources: Resource Display
| GTAP Resource #881 |
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"Trade in Infrastructure Services and Economic Efficiency: Australia’s Experience" by Dee, Philippa and Duc-Thanh Nguyen Abstract Over the last two decades, Australia has accumulated substantial experience in liberalising its key infrastructure service industries. Australia’s approach to infrastructure reforms has generally been unilateral. The impetus to reform infrastructure services grew from reforms elsewhere. Many of Australia’s infrastructure reforms have resulted in greater market access and national treatment generally, as well as significant improvement in domestic regulatory regimes. Indeed, reforms of domestic regulations have often been an important precondition for successful reforms of market access and national treatment. The implementation of reforms has not come at the expense of social welfare or equity considerations, or other national objectives. A significant increase in productivity growth has occurred in Australia during the 1990s, the period in which reforms intensified throughout the economy. It is now widely accepted that reforms have made a significant contribution to this economy-wide productivity improvement. At the industry level, the period since the implementation of major infrastructure reforms has seen significant developments, including improved technical efficiency and productivity, higher output and more technical innovation. Reforms have allowed a more efficient allocation of resources and facilitated structural change. Prices have become more reflective of costs, and improved productivity and lower prices have reduced the input and production costs of user industries. Lower prices and greater product choice have also benefited consumers. Australia is also likely to benefit from further reforms of its infrastructure industries. Studies of the effects of further services trade liberalisation have been hampered by a lack of quantitative estimates of the size and economic significance of barriers to services trade. To help overcome this problem, the Australian Productivity Commission and the Australian National University undertook a collaborative project to measure and model the effects of services trade restrictions in a number of economies in Europe, Asia, and North and South America. Generally, the results showed that Asian and South American economies had medium restrictions on services trade. These economies were also the most discriminatory against foreign service suppliers. European and North American economies tended to have low to medium levels of restrictions. Nevertheless, there were some important exceptions to these general trends. The collaborative project also estimated the direct effect of services trade restrictions on the economic performance of service firms in some sectors, and then projected the economy-wide and global benefits of multilateral services trade liberalisation, by using these direct price or cost effects in a computable general equilibrium (CGE) model. One paper found that the gains to the world as a whole from completely liberalising services trade would roughly equal those from completely liberalising agriculture and manufactures combined. But it would be difficult to find an outcome where at least some economies gained and none lost from partial liberalisation, when it involved only removing one class of restriction (such as market access or national treatment). This suggested that the best strategy for liberalisation may be to negotiate gradual reductions in all types of restrictions simultaneously. Another paper showed that a country’s services sector itself need not lose from liberalisation, because there are competing forces at work — not all services trade barriers discriminate against foreign services suppliers, so the service sector could expand because of new domestic entry, and some services trade barriers restrict inward FDI, so the service sector could expand because of new foreign entry. The net effect of multilateral liberalisation was likely to be an expansion in the services sectors in economies where domestic services restrictions were high initially. |
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- Trade in services |
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Public Access  GTAP Resource 881 (220.9 KB) Replicated: 0 time(s)Restricted Access No documents have been attached. Special Instructions No instruction supplied |
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Last Modified: 9/15/2023 1:05:45 PM
