Trading Blocs and the Trading System

Trading Blocs and the Trading System: The Services Dimension

This paper explores the relationship between regional and multilateral agreements to liberalize trade in services. Following a conceptual discussion of the political economy of regional as opposed to multilateral negotiations, existing data on trade and investment flows are analyzed with a view to gaining some insight into the likely interest group preferences regarding alternative institutional arrangements to liberalize trade in services. Conceptual considerations and available data suggest a preference for regional liberalization. But available data and a comparison of the content of the major existing agreements also suggests that regional and multilateral approaches are more likely to be considered by service industries and regulators to be complements than substitutes. (JEL: F13)