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Liberalizing Services Trade In APEC: A General Equilibrium Analysis with Imperfect Competition
Author(s) -
Benjamin* Nancy,
Diao** Xinshen
Publication year - 2000
Publication title -
pacific economic review
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.34
H-Index - 33
eISSN - 1468-0106
pISSN - 1361-374X
DOI - 10.1111/1468-0106.00088
Subject(s) - economics , imperfect competition , international economics , general equilibrium theory , liberalization , oligopoly , comparative advantage , free trade , applied general equilibrium , competition (biology) , welfare , trade barrier , international trade , trade in services , tertiary sector of the economy , service (business) , macroeconomics , microeconomics , economy , market economy , ecology , biology
The paper studies services‐sector trade liberalization in the Asia–Pacific Economic Co‐operation (APEC) Forum using a global, multicountry, multisector applied general equilibrium model with an imperfectly competitive service sector. Reducing the service sector’s nontariff barriers is modeled by eliminating the possibility for oligopolistic firms to price‐discriminate between client countries within APEC and lowering the fixed costs of the firms doing service exporting business. The results suggest that services trade liberalization reinforces existing sectoral trade balances. Increase in demand for intermediate services tends to reinforce rather than counteract the role of primary factors in determining sectoral comparative advantage. The western APEC members received the greatest welfare gains from services trade liberalization, while the developing economies gained more if only tariffs were eliminated.