Abstract:

This paper examines how services provisions within trade agreements shape services trade expansion and explores the mechanisms causing this impact. While the existing literature in international business and trade establishes that agreements increase trade, limited attention has been paid to how deeper agreements affect the global services markets. This paper argues that service provisions within trade agreements enhance service exports by moderating trade uncertainty between trading partners, thereby enhancing the institutional environment within which firms operate. Unlike goods trade, services trade is highly regulation-intensive, contract-dependent, and sensitive to policy reversals. Consequently, uncertainty surrounding market access, transaction cost, regulatory recognition, and dispute settlement mechanisms can significantly deter cross-border expansion by service providers. Increasingly, goods trade is supported by several services, which can result in higher exports of enabling and supporting services. Therefore, paper examines the impact of services provisions within trade agreements by accounting for the volume of goods trade. The findings confirm that service provisions in trade agreements significantly enhance bilateral services exports, even after accounting for goods trade, advocating the need for deeper trade agreements with substantial commitments, strengthening institutional credibility between partner countries.

Please choose your submission type: Full Paper

Primary Track: International Business and International Management

Keywords: Internationalization: negotiation issues;International: business;International: politics and economic development

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Dr. Banantika Datta