Table of Contents

Research Handbook on Trade in Services

Research Handbook on Trade in Services

Research Handbooks on the WTO series

Edited by Pierre Sauvé and Martin Roy

This Research Handbook explores the latest frontiers in services trade by drawing on insights from empirical economics, law and global political economy. The world’s foremost experts take stock of the learning done to date in services trade, explore policy questions bedevilling analysts and direct attention to a host of issues, old and new, confronting those interested in the service economy and its rising salience in cross-border exchange. The Handbook’s 22 chapters shed informed analytical light on a subject matter whose substantive remit continues to be shaped by rapid evolutions in technology, data gathering, market structures, consumer preferences, approaches to regulation and by ongoing shifts in the frontier between the market and the state.

Chapter 15: The behavioural dynamics of positive and negative listing in services trade liberalization: A look at the Trade in Services Agreement (TiSA) negotiations

Tomer Broude and Shai Moses

Subjects: law - academic, international economic law, trade law

Abstract

From a standard rational choice perspective, the choice architecture of an international trade in services liberalization scheme as structured around either positive or negative listing should not have any appreciable effect on the depth and breadth of commitments. In contrast, behavioral economics, in particular Prospect Theory and phenomena such as framing effects and status quo bias, suggest that a negative list approach would be more conducive to economic liberalization. Several additional complicating factors, such as sectoral considerations, negotiating asymmetries and transaction costs, preclude this hypothesis from being subjected to reliable empirical testing. However, a case study of the currently ongoing negotiations towards a plurilateral Trade in Services Agreement (TiSA), reveals that trade diplomats are acutely attuned to the potential importance of such negotiated ‘choice architecture’, and that behavioral effects can exert significant influence on negotiations. This demonstrates that behavioral dynamics, especially compromise effects, are a significant part of international trade talks, at least with respect to services trade.

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