The paper
How large are the costs of trading services across borders? This paper constructs a theory-based dataset using domestic production and international trade, revealing substantial barriers even between relatively integrated economies.
Research findings
- Estimated international trade costs in services are commonly two to three times those in goods, relative to domestic trade costs.
- Goods trade costs fell substantially over the period examined, while services costs were broadly stable; considerable differences persisted even within the European Union.
Policy takeaways
- Give services reform a distinct place in trade policy: progress in goods markets does not automatically remove services barriers.
- Use sector and country comparisons to target regulatory burdens and the infrastructure through which services are supplied.