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Craig VanGrasstek

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Craig VanGrasstek

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Craig VanGrasstek and Mina Mashayekhi

Developing countries take very different approaches to the negotiation of preferential trade agreements in general, and more particularly those that include substantial commitments on trade in services. There is on the one hand a small but growing number of countries that have enthusiastically taken up the opportunities presented by these agreements, negotiating them with many and varied partners. On the other hand there is also a large but diminishing number of countries that view trade liberalization with a deeper sense of apprehension and reluctance. The data presented here show that there are identifiable patterns in countries’ choices between these options. Taken as a group, the countries that opt to negotiate more and deeper agreements tend to have higher per capita incomes, and to share other attributes that suggest both their more active participation in global markets (e.g., more trade-intensive economies) and their greater capacity to compete (e.g., larger and more developed services sectors). In principle it is difficult to say whether these attributes are the cause or the consequence of those countries’ decisions to negotiate on services, but in practice it is clear that the diverging trends serve to widen the divide between the developing countries that do or do not actively engage in globalization. That divide has now grown to the point that the differences among some developing countries over trade appear greater than the differences between developed and developing countries.