Policy of International Trade in Services Chapter Four

Learning objective: ※ the evolution of ITS policy; ※ the laws on which it is based; ※ the applications; ※ the different characteristics of from to policy development liberalization protectionism

1. Evolution of trade policy in services （服务贸易政策演变） Ⅱ world war by 1990s Features: complex,diverse,uncertain,subjective,arbitrary ① transport, ② remittances, ③ other banking services, ect. ① tele, ② computer software, ③ information, ④ superhighway, ⑤ multimedia, ⑥ technology, ⑦ intellectual proterty right, ⑧ life-style-related services, etc.

2. Policy of trade liberalization in services 自由服务贸易政策 2.1 Trade liberalization and economic efficiency 自由贸易与经济效率 ※ boosts productivity growth ※ controversy : Trade liberalization and economic efficiency 自由贸易与经济效率 Theory of new growth 新增长理论 Relation between productivity increase and liberalization 生产力的提高与自由贸易 的关系 Relative theory in services 服务的相关理论

barrier dismantled wider range firm participation Macroeconomic stability liberalization productivity increasing

2.2 Welfare analysis of liberalization of trade in services （服务贸易自由化的福利分析） walfare analysis comparative advangtage theory comsumer surplusproducer surplus

2.3 Policy selection of liberalization of trade in services 服务贸易自由化的政策选择 Macro impact 宏观影 响 : ※ national security ※ national competitiveness six basic elements: capitalproductsmarket technology resourcemanagement

Policy orientation 政策取向 ( developed countries) (1) to open their commodity market as the conditions for developing countries to open their services markets; (2) for the same level of development of the country or region, they need to open their markets to each other; commodity marketservice market

Policy orientation 政策取向 ( developing countries) Mixed, progressive liberalization of services trade development strategy is taken as the option for developing countries. 1 step gradually relax control of the domestic services market; 2 step the gradual opening up of their merchandise trade market, lowering commodity tariffs; 3 step gradually open service market, reduce service products in the field of non-tariff barriers; 4 step gradually open elements market of services, reduce tariffs on trade in services and tangible non-tariff barriers;

3. Policy of protecting trade in services 保护服务贸易政策 3.1 Trade in services barriers and types 服务贸易壁垒及类型 Cause of barriers to services trade 服务贸易壁垒产生的原因 the source of micro-economics, which is the main basis for the government to implement interference with the natural monopoly, asymmetric information and economic externalities; the consideration for their economic independence; political and cultural considerations.

Types of trade barriers in services: marketing permittion, national treatment Product moving barriers 产品移动壁垒 Barriers to capital mobility 资本移动壁垒 Personnel movement barriers 人员移动壁垒 The right of establishment business barriers 开业权壁垒 tradebarrierstypetradebarrierstype

※ Product moving barriers 产品移动壁垒 ※ Barriers to capital mobility 资 本移动壁垒 number limitation tax system government procurment discriminator y techniqual standard local requirment government subsides, incomplete intetectual property protection system foreign exchange control, floating exchange rate, export restrictions on investment income

※ The right of establishment business barriers 开业权壁垒 regulations on foreign producers rights

※ Personnel movement barriers 人员移动壁垒 homeland foreign countries restriction

3.2 Measure of trade in services protection level 服务贸易保护程度的衡量 # NRP ( 名义保护率 ) : # Effective protection rate (ERP) （有效保 护率） : # Producer subsidy equivalent (PSE) ( 生产者 补贴等值 ) domestic prices- import prices ——————————————— ×100% import prices Value-added domestic processing- Import value-added processing _____________________________________________________ × 100% Import value-added processing

3.3 Comparison and selection of protective policy of trade in services （服务贸易保护政策的比较与选择） # Tariff, subsidy and quota(policy sequence ) output subsides>tariff ≧ quota # Import restrictions, opening barriers and control(policy sequence ) （进口限制、开业障碍和管制） control>Import restrictions ≧ opening power Rational Choice: combination of direct subsides and control measures

conclusion 1 、 Like goods trade, there are two different policy in the field of trade in services: liberalization protectionism 2 、※ microcosmic-effect: economic effectiveness, rational allocation, resources saving, wealfare level increase ※ macroscopic-effect: national security, national competition

3 、 different policy choices: dev-ed countries dev-ing countries: dev-ed countries: mutual open service market deveoping countries dev-ing countries: hibrid,step liberalization service goods

product movement capital movement producer establishment human movement 4 、 trade barriers in services

5 、 Measure of trade in services protection level Nominal rate of protection (NRP) Effective protection rate (ERP) Producer subsidy equivalent (PSE)

6 、 Protective policy of trade in services ： tarrif effectiveness based on the size of different countries. policy tarrif non-tarrif government control import restriction subsides quota

7 、 rational choice output sibsides tarrifquota control import restriction opening power

Home work 1 、 What is the policy orientation of China ’ s trade in services ？ 2 、 What does China ’ s choice in policy of trade in services rely on ？ 3 、 How do you express welfare analysis of policy on liberalization of trade in services?