ISSN (Print) - 0012-9976 | ISSN (Online) - 2349-8846

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Quantification of Services Trade Restrictions

Some New Results

In contrast to the extensive literature on the assessment of goods trade and trade barriers, limited attention has been paid to quantify the regulatory restrictiveness of services trade across the globe. This study attempts to build on the services trade restrictiveness index of the Organisation for Economic Co-operation and Development by proposing an alternative that makes the OECD data more amenable to policy purposes.

 

The authors would like to thank the Ministry of Commerce and Industry, Government of India, for funding this research. They would also like to thank K L Krishna, Bishwanath Goldar, Aparna Sawhney, Pralok Gupta, Hidegunn Nordas, Sebastian Benz, and Aditya Mattoo for for their help in critically understanding the methodologies of the OECD and World Bank’s STRIs. Thanks are also due to James Nedumpara and his team at the Center for Trade and Investment Law, New Delhi, their help in organising workshops with legal experts and traders. The authors are grateful to Piyali Majumder, Stuti Bawa, Srinka Bose, Sukriti Mahana, Mahika Sharma, and Yamini Nair Chandran for their research assistance. The paper immensely benefited from suggestions received during the World Bank–Ministry of Commerce workshop on “Trade Facilitation in Services–Concepts and Empirical Analysis” in December 2019.

When trade negotiations led to the establishment of the World Trade Organization (WTO) in 1995, one element of the structure established was the General Agreement on Trade in Services (GATS). However, at that particular point, there was limited interest among countries in establishing an architecture for regulating services trade. This lack of interest manifested itself in the use of a “positive-list” approach as opposed to a “negative-list” one for goods trade. Even the majority of trade pacts at the bilateral/plurilateral levels in the past were centred on goods trade. Services, on the contrary, were perceived to be of interest to mainly the rich industrialised nations and usually sidelined under the head of other trade matters (Roy 2019).

Recent research and availability of value-added statistics, however, have rendered these perceptions baseless. Estimates show that not only is the services sector important in its own right, but that it also virtually underpins all the economic activities needed in the production of other goods and services (Miroudot et al 2012; Lodefalk 2017). The expanding body of research on services trade, with a specific focus on its impact on trade integrations and economic development, has made services trade policy a high-profile issue for many countries. Consequently, services have also started gaining attention on the global policy front.

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Updated On : 5th Mar, 2022
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