The Trade Effect Of Service Trade Liberalization In North American Free Trade Area

In recent years, as the multilateral negotiation on trade in services meet great difficulties, many countries are seeking regional cooperation in trade in services. Chinese government, in response to this situation, actively promotes the process of regional liberalization of trade in services, and beginning in 2008 the "north-south type" of regional liberalization arrangements on trade in services. However, because of its late start, China's regional liberalization of trade in services is lack of experience. Under such circumstances, this paper conducts in-depth study on the rules of NAFTA's liberalization of trade in services, and examines its trade effects after running for over a decade to provide inspiration for China to carry out regional liberalization of trade in services.Firstly, this paper introduces the arrangements on liberalization of trade in services under NAFTA, including rules on cross-border trade in services, commercial presence and temporary entry for business persons, and summarizes them into four characteristics: "negative list" of commitment, the separation of rules for commercial presence and trade in services, developing members to enjoy special offers and effective dispute settlement mechanism.Then, the paper analyzes the trade effect of regional liberalization of trade in services in theory, including the service trade creation and service trade diversion effect and the effect of enhancing the competitiveness of trade in services through technology transfer, economies of scale and market competition.On this basis, this article examines the trade effect of service trade liberalization on the United States, Canada and Mexico through the Balassa model, the proportion of intra-regional trade and trade intensity index. Moreover, the paper uses the TC index and RCA index to analyze the change on competitiveness of trade in services. The empirical results show that the regional liberalization has promoted the service trade flows among member countries, and has generated trade creation and trade diversion effects and has strengthened the trade links between Mexico and other two member countries. Besides, Canada's overall service trade competitiveness has significantly improved. With comparative advantage, the competitiveness of Mexico's travel service sector has greatly increased after liberalization. However, owning to its insufficient development of domestic service industry, the competitiveness of almost all Mexico's service sectors is not improved.Finally, this article provides inspiration for China on five aspects: continue to promote regional liberalization of trade in services, improve the development of the domestic service industry, sign "south-north type" service trade agreements carefully, avoid excessive reliance on member countries and set up an effective dispute settlement mechanism under the arrangements for regional liberalization of trade in services.