Liberalizing air cargo services in APEC

This study aims at assessing the link between a more liberal air cargo regime and increased bilateral merchandise trade in the Asia Pacific region, under the auspices of APEC. Using the gravity model and employing the Air Liberalisation Index (ALI) developed by the WTO Secretariat, this paper finds strong support for two hypotheses. First, more liberal air services policies are positively, significantly and robustly associated with higher bilateral trade in merchandise. The results also show that air transport policy matters more for some sectors than for others. A particularly strong relationship is found between bilateral liberalisation and trade in manufactured goods, time sensitive products, and parts and components. Considering the sector found to be most sensitive to the degree of aviation liberalisation, the estimates imply that a one point increase in the ALI is associated with an increase of 4% in bilateral parts and components trade, prior to taking account of general equilibrium effects. These findings have important policy implications. In particular, economies actively seeking greater integration in international production networks could greatly benefit from a more liberal aviation policy regime.Aviation; international trade in services; liberalization; international trade in goods; parts and components trade; production networks; APEC.

Liberalizing air cargo services in APEC

This study aims at assessing the link between a more liberal air cargo regime and increased bilateral merchandise trade in the Asia Pacific region, under the auspices of APEC. Using the gravity model and employing the Air Liberalisation Index (ALI) developed by the WTO Secretariat, this paper finds strong support for two hypotheses. First, more liberal air services policies are positively, significantly and robustly associated with higher bilateral trade in merchandise. The results also show that air transport policy matters more for some sectors than for others. A particularly strong relationship is found between bilateral liberalisation and trade in manufactured goods, time sensitive products, and parts and components. Considering the sector found to be most sensitive to the degree of aviation liberalisation, the estimates imply that a one point increase in the ALI is associated with an increase of 4% in bilateral parts and components trade, prior to taking account of general equilibrium effects. These findings have important policy implications. In particular, economies actively seeking greater integration in international production networks could greatly benefit from a more liberal aviation policy regime

Managing Request-Offer Negotiations under the GATS: The Case of Environmental Services

This study forms part of on-going OECD work on trade in services, in co-operation with UNCTAD, aimed at assisting WTO Members in managing request-offer negotiations under the GATS. The key objective is to help officials of WTO Members in both gaining a greater insight into the particular issues of importance in the environmental services sector and how they might be approached in the negotiations. The current set of GATS negotiations offers WTO Members an opportunity to achieve greater levels of liberalisation of environmental services, which may lead to significant economic and environmental benefits for all countries. Nevertheless, liberalisation, particularly of environmental infrastructure services, must be appropriately designed and supported by a strong regulatory framework. Making commitments in these services thus raises questions in relation to their nature, although the flexibility provided for in the GATS can be used to schedule them to take account of their characteristics. Risks of market failure to achieve social objectives appear to be less significant for environmental non-infrastructure and support services.services, environment, liberalisation, barriers, benefits, exports, regulation

Liberalising Network Infrastructure Services and the GATS

This study reviews key issues in liberalising network infrastructure services ? including telecommunications, postal/courier, energy, water and sewage ? in the national and multilateral contexts. The economic and social significance of these services means that they are high on the list of development priorities in many countries. Enhanced trade and investment in network infrastructure services can help achieve these development goals. Liberalisation, however, is no easy task and requires sound regulation and effective institutions to address market failures and ensure public policy objectives. If appropriately designed, bound liberalisation under the GATS can contribute to the advancement of national objectives by improving investor?s confidence when countries decide to allow private sector participation in these services. The WTO services agreement can affect the regulatory conduct of governments in some areas of network infrastructure services, particularly when specific commitments are made. This is intensified by the fact that the GATS is a relatively young agreement and some of its provisions remain to be tested in practice. It is thus crucial to carefully examine its provisions and tailor-specific commitments to national policy objectives.liberalisation, GATS, network, regulation, infrastructure, public services

Analysis of Subsidies for Services: The Case of Export Subsidies

This study presents an exploratory analysis of export subsidies in the services field. It draws from a variety of sources in an effort to provide insights into the characteristics and use of these measures. The report, while not generating accurate measures of the extent and effects of export subsidies for services, provides evidence that these measures are used by many countries in the developed and developing worlds to support a wide range of services sectors. The analysis also indicates that broadly speaking the definitions contained in the WTO Agreement on Subsidies and Countervailing Measures (ASCM) are relevant for services. The most important types of export support appear to be direct tax incentives, particularly profit tax exemptions or reductions. Based on the detailed analysis of export subsidies for services, the study then discusses some possible elements of a definition of these measures.services, GATS, ASCM, export subsidies

Air cargo transport in APEC: Regulation and effects on merchandise trade

This study aims at assessing the link between a more liberal air cargo regime and increased bilateral merchandise trade in the Asia Pacific region, under the auspices of APEC. Results from a gravity model using the Air Liberalisation Index (ALI) developed by the WTO Secretariat provide strong support for two hypotheses. First, more liberal air services policies are positively, significantly and robustly associated with higher bilateral trade in merchandise. The results also show that air transport policy matters more for some sectors than for others. A particularly strong relationship is found between bilateral liberalisation and trade in manufactured goods, time sensitive products, and parts and components. Prior to taking account of general equilibrium effects, the estimates imply that a one point increase in the ALI is associated with an increase of 4% in bilateral parts and components trade, which is the sector found to be most sensitive to the degree of aviation liberalisation. These findings have important policy implications. In particular, economies actively seeking greater integration in international production networks could greatly benefit from a more liberal aviation policy regime.Asia-Pacific Trade policy Air transport

Market Structure in the Distribution Sector and Merchandise Trade

This study aims at exploring how recent developments in the retail sector affect trade in consumer goods. It focuses on three areas of development: i) internationalisation; ii) market structure; and iii) the growing market share of retailers? private labels. It distinguishes between food and non-food products as there are significant differences between the sourcing patterns of these two product categories. The gravity model is extended by integrating a retail intermediary sector, and a novel estimation technique (zero inflated Poisson) is proposed. It is found that the foreign operations of a retailer are positively related to imports from the host to the home country of the retailer. The rate of market concentration and the market share of private labels are both found to be negatively related to imports of food and positively related to imports of non-food consumer goods, but private labels tend to shift sourcing towards low-income countries. Lower tariffs yield a stronger import response in countries with a less concentrated retail sector, particularly for food items suggesting that competition policy and trade policy are complementary. In developing countries the entry of international retailers can have a positive impact on exports and product quality.retail sector, gravity model, trade in consumer goods

Logistics and Time as a Trade Barrier

This paper analyses the relation between time for exports and imports, logistics services and international trade. Time is found not only to reduce trade volumes, but more importantly lengthy procedures for exports and imports reduce the probability that firms will enter export markets for timesensitive products at all. Furthermore, a broader range of products are becoming time-sensitive following the proliferation of modern supply chain management in manufacturing as well as retailing. Labourintensive products such as clothing and consumer electronics are increasingly time-sensitive and many developing countries urgently need to shorten lead time in order to stay competitive in these sectors. The report argues that reforms to this effect can be implemented at relatively low cost also in low-income countries. The study provides case studies as well as econometric estimates of the relation between time, logistics services and trade performance and draws policy implications.trade barriers, GATS, logistics services, trade facilitation, international supply chains