Beyond their key contribution to value chains in all sectors, services represent a centrally important source of economic and export diversification.
... See More + This paper discusses how to promote trade in services as a channel for growth, employment, and diversification by assessing services trade costs and identifying policies that contribute to their reduction: a concept termed trade facilitation in services. It summarizes the latest research on the costs facing trade in services beyond discriminatory market access and national treatment and finds that these are high. It proposes measures that could fall under the scope of a potential trade facilitation in services agenda, namely: (i) streamlining processes and procedures used in administering regulatory policies aside from the policy itself, (ii) improving access to information on regulatory policies (that is, transparency), and (iii) boosting the efficiency of governance structures for regulators that set policies affecting trade in services.
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Policy Research Working Paper WPS9233 MAY 07, 2020
Gillson,Ian John Douglas; Molinuevo,Martin; Saez,Juan SebastianDisclosed
This paper examines the concept of trade facilitation in services from the perspective of the recent literature on the determinants of services trade.
... See More + The aim is to conceptualize trade facilitation in this area as a dimension of international integration beyond the baseline restrictiveness of policy, as captured by indicators of discriminatory market access. The analysis focuses on the role of governance structures, institutions, and transparency in shaping the environment for trading in services internationally. In addition to examining these factors, the paper provides some novel empirical estimates. Using a gravity model, the analysis finds that the ad valorem equivalents of common measures of institutional quality, governance, and transparency are larger relative to measures of sheer policy restrictiveness, frequently a significant multiple. The paper also shows that the ad valorem equivalents of data restrictions are of similar magnitude to policy restrictions in services. The conclusion is that framing discussions of trade facilitation in services around the concept of reducing trade costs -- specifically those stemming from areas where improvement is needed in governance, institutions, and transparency -- could potentially bring significant benefits in increased integration of the global services economy.
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Policy Research Working Paper WPS9234 MAY 07, 2020
Van Der Marel,Erik Leendert; Shepherd,BenDisclosed
The growing importance of services trade for countries across the world is well-documented in the services and trade literatures. At the same time, regulatory and administrative barriers to the movement of service suppliers to deliver services internationally have resulted in very low shares of "Mode 4" trade in total services trade.
... See More + Against this background, this paper conceptualizes an agenda for trade facilitation in services as it would apply to the movement of natural persons. It also provides descriptive statistical evidence from the Organisation for Economic Co-operation and Development's Services Trade Restrictiveness Index database. The paper differentiates between regulatory measures that may improve transparency or facilitate access for service providers and those measures that impede Mode 4 trade as well as the administrative, financial, and economic costs of compliance with such measures.
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Policy Research Working Paper WPS9227 MAY 05, 2020
In 2016, the Government of India proposed negotiations on an agreement to facilitate trade in services to complement the 2013 World Trade Organization Trade Facilitation Agreement in goods.
... See More + The proposal did not find much support, but plurilateral talks launched in 2017 on various policy areas encompass areas that are very relevant from a services trade facilitation perspective. This paper argues that participating in the current plurilateral talks can do much to achieve services trade facilitation objectives by identifying good regulatory practices. Although elements relevant to services trade facilitation are on the table in the World Trade Organization, there are important gaps. Identifying priorities for complementary international cooperation to facilitate trade in services on a plurilateral basis requires initiatives that bring together governments, services industry associations, and sectoral regulators.
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Policy Research Working Paper WPS9228 MAY 05, 2020
This paper examines the performance of globally engaged firms in Argentina in the past decade. Using highly disaggregated firm-level customs transaction data for imports and exports, the paper documents the progressive retreat of Argentine firms from global markets.
... See More + Between 2007 and 2017, the number of exporters decreased by 30 percent. Benchmarking the characteristics of these exporters with similar countries reveals that Argentine exporters are disproportionally fewer and individually larger, with export value extremely concentrated in a few firms. Firm churning rates are disproportionately low and survival rates of entrants are high. These findings reflect exceptionally high entry costs of export, which are the result of anti-export bias and import substitution policies that sought unsuccessfully to develop the local industry. The paper shows that exporters that import directly intermediate and capital goods have better export outcomes than other exporters.
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Policy Research Working Paper WPS9218 APR 22, 2020
The COVID-19 (coronavirus) health crisis can lead to a food security crisis in Bangladesh if proper measures are not put in place. Trade policies can be an essential instrument in the management of the COVID-19 (coronavirus) related food security issues.
... See More + Trade responses such as eliminating tariffs, refraining from imposing export restrictions, and facilitating trade flows can play an important role in maintaining access to and reducing the cost of essential food products.
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Experience from previous global and food crises provides some guidance for appropriate trade responses during the crisis and those that are likely to undermine effective national and global responses.
... See More + However, the speed, scale and nature of this crisis are unprecedented which requires thinking outside of the normal box by analysts and exceptionally brave steps from policy-makers. There are however, some positive measures that governments can take to ameliorate the impact of the current crisis.
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The covid-19 pandemic is increasingly a concern for developing countries. Using a new database on COVID-19 trade flows and policies, this note looks at the role of trade and trade policy to address the looming health crisis in developing countries with highest numbers of recorded cases.
... See More + It shows that export restrictions by leading producers could cause significant disruption in supplies and contribute to price increases. Tariffs and other restrictions to imports further impair the flow of critical products to developing countries.
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The March newsletter highlights facts and misconceptions surrounding the distributional effects of international trade that have led to overstating the net costs of trade liberalization
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Increased international production fragmentation implies that firms at home rely on imported intermediates for production. In this context, tariff policy design needs to consider the impact downstream of changes in tariffs upstream.
... See More + Policy makers embarking on tariff reforms need to answer questions such as: what is the impact of tariff changes on production costs downstream? What are the key input tariffs that could be reduced to lower production costs in priority sectors considering sectors' backward linkages? Or how will a tariff rationalization plan that focuses on tariff reductions in raw materials and intermediates affect effective protection across sectors? This paper presents the Upstream Tariff Simulator, a simple Microsoft Excel–based tool designed to help policy makers answer these questions, by combining information on tariffs and input-output structures and allowing alternative sectoral aggregations, and alternative market structures for input markets. It provides the underlying conceptual framework and a range of examples that show the insights that the tool can provide to policy makers when analyzing the impact of tariff reforms.
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Policy Research Working Paper WPS9158 FEB 20, 2020
This paper uses data on directional trade flows and Regional Trade Agreements (RTA) to i) estimate the effects of RTA on trade flows and ii) assess the importance of Global Value Chains for these effects.
... See More + Based on a Difference-in- Difference identification strategy, we find that RTAs are associated with: (1) an increase in trade within the region, (2) a decrease in inflows to the region, and (3) an increase in outflows from the region. The first two findings can be understood as trade creation and trade diversion due to a shift in demand associated with the lower trade barriers within the region and Rules of Origin as an implicit trade barrier for imports from the rest of the world. Global Value Chains are most relevant to understand the third finding on the increase in outflows from the region. The key determinant of the increase in outflows is the importance of the Regional Value Chains for imports of intermediates by members of the region.
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Policy Research Working Paper WPS9089 DEC 18, 2019
De Soyres,Francois Michel Marie Raphael; Maire,Julien Luc Yvon; Sublet,GuillaumeDisclosed
This paper investigates the impact of Ghana's World Trade Organization (WTO) accession on firm-level product and labor market imperfections. The paper exploits a rich dataset of firm-level information to estimate both markups and the degree of monopsony power enjoyed by manufacturing firms.
... See More + The results indicate that price-cost margins declined while the degree of monopsony power increased in the wake of WTO accession. These diverging dynamics suggest that firms compress real wages to offset loss of market power in the product market due to increased international competition. This gives rise to an increase in the market imperfection gap, which gradually erodes the pro-competitive gains from trade. The paper contributes to the literature by identifying channels through which allocative inefficiencies and misallocation can persist even after trade liberalization.
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Policy Research Working Paper WPS9079 DEC 11, 2019
