How the Reduction of Regulatory Barriers to Trade in Services may affect the Architecture of Global Value Chains: The Case of TISA

Brazil - 9 August 2017

Significant reductions in tariff and non-tariff barriers as well as advances in information technology over the last decades have allowed countries to expand their production process beyond national borders, reflecting the increasing relevance of trade in intermediates. This research investigates how the reduction in regulatory barriers for trade in services may change the architecture of global/regional value chains through its indirect effect on the exports of industrial goods. In terms of value-added, services exports currently represent more than 50% of global exports. Therefore, a more dynamic and competitive service sector is considered a key factor for international competitiveness, as more and more services go embedded in country’s exports. As a case study, the authors choose TISA (Trade in Services Agreement), a Plurilateral agreement on trade in services currently under negotiation by 50 economies (including EU-28, USA and Japan) and comprising over 70% of global trade in services.