We present a new dataset of international trade costs in services sectors. Using a theory-based methodology combined with data on domestic shipments and cross-border trade, we find that trade costs in services are much higher than in goods sectors: a multiple of two to three times in many cases. Trade costs in services have remained relatively steady over the last ten years, whereas trade costs in goods have fallen overall at an impressive rate. We also present two examples of the ways in which our dataset could be used in future work. First, we examine the impact of regional trade agreements on trade costs in services. Although we find that intrabloc trade costs are lower than those facing outside countries, the differential is usually quite small for services, and in some cases has even been narrowing over time. This finding accords with the observation that because service sector reform is about re-regulation, "preferential" agreements tend to involve less discrimination than in goods markets. Second, we show for the first time that services sectors with lower trade costs tend to be more productive, and experience faster productivity growth. This result lines up well with the evidence from goods markets.JEL Codes: F13; F15.

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Recently the regional service trade liberalization is expanding rapidly. In the wake of the 'GATS+' trend showing in the regional trade agreements (RTAs), GATS-Minus (GATS-) characteristics has been found obviously in part of these RTAs. This paper showed that GATS-minus commitments is concentrated to some specific service sectors (such as finance, communication, business and transportation services) and supply modes (mainly mode 3 and mode 4). The typical GATS minus commitments are as follows: (1) imposing more restriction measures on the original market access and national treatment commitments; (2)seeking more exemption and exclusion on the subsidy related obligations ; (3) reducing the sector coverage of the GATS commitment.

This paper is published under the responsibility of the Secretary-General of the OECD. The opinions expressed and the arguments employed herein do not necessarily reflect the official views of OECD countries. The publication of this document has been authorised by Ken Ash, Director of the Trade and Agriculture Directorate This document and any map included herein are without prejudice to the status of or sovereignty over any territory, to the delimitation of international frontiers and boundaries and to the name of any territory, city or area. The statistical data for Israel are supplied by and under the responsibility of the relevant Israeli authorities. The use of such data by the OECD is without prejudice to the status of the Golan Heights, East Jerusalem and Israeli settlements in the West Bank under the terms of international law.