The Impact of Liberalizing Barriers to Foreign Direct Investment in Services: The Case of Russian Accession to the World Trade Organization

Jensen, Jesper; Rutherford, Thomas F.; Tarr, David G.

doi:10.1111/j.1467-9361.2007.00362.x

Cited by 89 publications

(54 citation statements)

References 23 publications

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“…Taking as an example one of the most recent accessions, that of the Russian Federation, what recent studies conclude (Camacho et al 2013;Jensen et al 2007;Rutherford, Tarr 2010) is that the major gains from the country's WTO accession will derive from the liberalization of trade in business services as they are classified among the service industries with highest trade potential (Knobel 2012). In addition, not only firms will benefit from the liberalization process: the estimations of Rutherford and Tarr (2008) show that in the medium term Russian households will also benefit from the liberalization of barriers against foreign direct investment in services.…”

Section: Trade In Intermediate Services and Growth: A Review Of The Lmentioning

confidence: 99%

Trade in Services in the Baltic States: Evolution and Future Prospects

Rodríguez

Melikhova

Camacho

2017

Technological and Economic Development of Economy

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Section: Trade In Intermediate Services and Growth: A Review Of The Lmentioning

confidence: 99%

Trade in Services in the Baltic States: Evolution and Future Prospects

Rodríguez

Melikhova

Camacho

2017

Technological and Economic Development of Economy

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“…When barriers to trade in services are represented as reducing productivity in producing sectors, the measured benefits of reforming trade in services are even larger. Jensen et al (2007) find that the benefits of reform in services trade completely dominate as a source of benefits from likely reforms following Russia's accession to the WTO. A wide range of services, including financial services, transport, and communication, as well as those involved in supply of agricultural inputs and agricultural marketing services impinge directly on the performance of the agricultural sector.…”

Section: What We Still Need To Domentioning

confidence: 91%

The Doha agenda and agricultural trade reform: the role of economic analysis

Martin

Anderson

2007

Agricultural Economics

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This article shows that research on international agricultural trade reform can make much greater contributions to understanding than was feasible in earlier trade negotiations. While current models typically estimate gains of less than 1% of GDP, new developments in theory and methodology provide the potential for quantitative analysis to be improved in at least six areas: measurement of protection for goods; incorporation of barriers to foreign trade and investment in services; representation of the counterfactual; disaggregation of products and regions; incorporation of new products; and inclusion of the productivity enhancement associated with trade reform. Copyright 2007 International Association of Agricultural Economists.

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“…They show that the endogenous productivity effects from the Dixit-Stiglitz externality in their model results in important differences from the implications of a Heckscher-Ohlin model. Their model was applied to datasets and policy issues of real economies in small open economy models in all four of our focus countries, initially applied to the Russian Federation by Jensen, Rutherford and Tarr (2006;2007;2010), Rutherford and Tarr (2008;2010) and Bohringer, Rutherford, Tarr and Turdyeva (2015). It has also been applied to the other three focus countries of this study: in Kazakhstan by Jensen and Tarr (2008); in Armenia by Jensen and Tarr (2012); and in Belarus by Balistreri, Olekseyuk and Tarr (2017).…”

Section: Estimates Of Foreign Direct Investment Liberalization In Sermentioning

confidence: 99%

Deep Integration in the Eurasian Economic Union: What are the Benefits of Successful Implementation or Wider Liberalization?

Knobel

Lipin

Malokostov³

et al. 2018

SSRN Journal

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We assess deep integration in the Eurasian Economic Union (EAEU) through the reduction of time in trade costs, the reduction of non-tariff barriers in goods and the liberalization of barriers against foreign suppliers of services. We develop an innovative multi-region model of trade and FDI for preferential trade analysis where we incorporate Dixit-Stiglitz endogenous productivity effects from trade and FDI liberalization. This model produces important differences compared with a perfect competition model. We build on numerous surveys and econometric estimates of the trade and FDI barriers in our focus countries that we helped develop.We show that if the EAEU effectively implements its objectives for trade cost reduction, it would lead to significant welfare gains of between 0.8 to 4.8 percent of consumption, depending on the country. If these deep integration measures are extended to third countries, either by a wider liberalization effort or by spillovers, then the estimated welfare gains increase between 2.5 and 4.5 times for Belarus, Kazakhstan and the Russian Federation. Using the neoclassical model of labor migration, we estimate that the right to legally work in the Russian Federation is approximately of equal value to Armenia as the combined aspects of the reduction of trade costs, including FDI liberalization. Our estimates show that all the spillovers are beneficial to all the EAEU countries. Among the various reforms under consideration, we identify which reform is most important for each EAEU member country; and we identify whether the European Union, China or the United States is the most important external region for each member country if the reforms are extended to third countries.assumption. We are the first to provide estimates of these trade costs impacts for the EAEU countries with and without spillovers to third countries. We also contribute to the literature by providing an estimate of the free movement of labor, where we employ the well-known neoclassical model of labor migration. Key ResultsOur results for our central (basic) scenario of EAEU integration shows significant gains ranging from 0.8 percent of consumption for the Russian Federation to 4.8 percent of consumption for Armenia. If the measures to reduce trade costs and liberalize barriers against FDI in services are extended to third countries, either by a wider liberalization effort or by unavoidable extension of benefits (called "spillovers"), then the estimated gains increase to between 3.6 and 7.2 percent of consumption, depending on the country. The importance of spillovers is especially true for FDI liberalization. The significantly larger gains from wider liberalization or spillovers reflects the fact that the five EAEU countries collectively have only 2.2 percent of world GDP in 2017. The estimated gains are significantly smaller with our perfect competition model, which shows the importance of incorporating the endogenous productivity gains from trade and FDI liberalization in services.Since remittance income is very impor...

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The Impact of Liberalizing Barriers to Foreign Direct Investment in Services: The Case of Russian Accession to the World Trade Organization

Cited by 89 publications

References 23 publications

Trade in Services in the Baltic States: Evolution and Future Prospects

Trade in Services in the Baltic States: Evolution and Future Prospects

The Doha agenda and agricultural trade reform: the role of economic analysis

Deep Integration in the Eurasian Economic Union: What are the Benefits of Successful Implementation or Wider Liberalization?

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