The paper
This paper studies services commitments in regional trade agreements alongside bilateral trade-cost data. It asks how much preferential agreements change services trade costs, and who benefits.
Research findings
- Services agreements are associated with modest reductions in trade costs, with much of the adjustment occurring before signature.
- The preferential margin is thin: nonmembers also experience lower trade costs, consistent with reforms that apply more broadly than the agreement’s membership.
Policy takeaways
- Look at changes in actual regulation and market access, as well as the commitments written into agreements.
- Use services agreements to support and lock in domestic reforms, recognizing that benefits can extend to suppliers from outside the agreement.