DP5760 Trade in Services, Trade Agreements and Economic Development: A Survey of the Literature

Author(s): Bernard Hoekman

Publication Date: July 2006

Keyword(s): trade in services , WTO , GATS , trade agreements , economic development

JEL(s): F1 , F2 , F5 , L80

Programme Areas: International Trade and Regional Economics

Link to this Page: www.cepr.org/pubs/dps/DP5760.asp.asp

Since the mid 1980s a substantial amount of research has been undertaken on trade in services. Much of this is inspired by the WTO or regional trade agreements, especially the EU, but an increasing number of papers focus on the impacts of services sector liberalization. This paper surveys the literature, focusing on contributions that investigate the determinants of international trade and investment in services, the potential gains from greater trade (and liberalization) and efforts to cooperate to achieve such liberalization through trade agreements. There is increasing evidence that services liberalization is an important source of potential welfare gains, but relatively little research has been done that can inform the design of international cooperation - both trade agreements and development assistance - so as to more effectively promote development objectives.