The Study On Service Trade Liberalization Under The Background Of Regional Integration

With service trade becoming the new economic growth engine,trade service development is prioritized by almost all economies be it developed or developing countries.Ever since the late 1990 s,global economic integration was suffocated,regional integration has shown its momentum,and it influences the field of service trade.In this way,service trade carries on the characteristic of regional integrationThis studychooses three countries—China,Japan and Korea,who play a decisive role in Asian-Pacific economic cooperation,as study subject to evaluate their liberalization level before they take part in the regional service trade integration.The purpose is to explore ways to estimate the service trade barriers correctlyIt is of significance in the following two aspects.First,it will clarify China's liberalization level of respective service trade departments under the WTO framework,which will be the basis for China's participation in regional cooperation negotiation.Second,it will compare the trade cost among China and its trading partners,including Japan and Korea.So the springboard and the purpose of this research are to understand the condition of China's service trade liberalization,and then to adopt specific measures to reduce service trade cost so as to finally promote China's service trade liberalization.After a brief introduction of the regional integration developmentprocess among China,Japan and Korea,the basis of regional integrationis analyzed in three aspects: service trade competitiveness level,trade relevancy and trade structure development.A theoretical framework is constructed evaluate the level of service trade liberalization both in macro and micro perspective.In micro perspective,it will use the improved Hoekman trade restrictiveness index to measure the four forms of the service trade,especially commercial presence,and the liberalization level of eleven departments and sub-departments.That is to say,make a basic estimation about every party's service trade liberalization level according to the market access commitment,which is stipulated in the General Agreement on Trade in Service among these three countries.In macro perspective,it will estimate the liberalization level among counties from the trade cost aspect.That is to say,it will use the improved gravity model,which has the micro theoretical basis,to estimate the trade cost of China's major trade partner,including Japan and Korea.Then it will divide the trade cost into two parts—fixed cost and variable cost.Under this circumstance,it will use panel data model to make empirical analysis to the influence factors to total cost,fixed cost and variable cost respectively,and then predict the trade potential.Finally,it will come to a conclusion that developing China's service trade under regional integration should focus on the following aspects: accelerate the development of modern service trade departments;promote the reformation of laggard service trade departments with the help of open-up;motivate the negotiation and contract signing of free trade agreement among partners,especially in actively pushing forward the establishment of free trade zone among China,Japan and Korea;strengthen cultural interaction and communication;and consolidate political trust to promote the establishment of dispute settlement mechanism.During the process of research,this essay makes some improvement on research methods based on the original one.First,there is an improvement on service trade restrictiveness index measurement.This essay directly adopts assignment criteria from World Bank(2012)and OECD(2014)database and uses Liu Qinglin and Baijie's improvement on Heokman's conventional assignment method in secondary industry for reference.Second,it uses trade cost measurement in Novy(2011).Recently,most of the trade cost measurement in China is based on gravity model in Novy(2006)or Novy(2008).Though this kind of model can solve the problem in Anderson and Van Wincoop model,where the price index,not be observed directly,is regarded as a multilateral resistance,its hypothesis is still based on the theory that bilateral trade cost has symmetry.Novy(2011)not only overcomes the symmetry,but also has micro theoretical basis.Its result depends on identical relationship rather than measurement estimation,which can be applied in various trade theoretical models and is prudent to discrepancy.Third,the theoretical framework established by this essay improves the current estimation system of service trade liberalization level.Though there are different kinds of classification standard,scholars prefer to use direct method or indirect method to estimate the service trade barrier.There are few researches who consider to combine those two methods together: estimate liberalization level of the certain service trade departments in micro perspective and the whole country in macro perspective.Though from the view of the whole world,China,Japan and Korea do not possess obvious competitive advantages in service trade,Japan and Korea gradually make progress in this field while China are suffering a decline.The dominant departments in these three countries are traditional departments like transportation,tourism and business service department.However,Japan has an apparent advantage in modern service trade department like patent information service and financial service department.From the perspective of bilateral trade correlation,there is a high integrate degree between China and Korea and between Korea and Japan,while the relevancy between China and Japan is low.However,from the perspective of trade complementarity,the trade complementarity between Japan and Korea is higher than that between China and Korea,and the trade complementarity between China and Korea is higher than that between China and Japan.From the perspective of trade structure,inter-trade level of service trade between China and Korea is relatively high and keeps growing year by year.On the contrary,Japan has a relatively low inter-trade level with other two countries and the inter-trade between Japan and China appears to be vertical.The service trade liberalization level of the three countries can be ranked as follow: Japan,Korea and China,which is estimated by the improved Hoekman index method.From the perspective of the certain service departments,traditional service trade departments—transportation,tourism and business service department enjoy the highest liberalization level in all three countries.However,from the perspective of modern service trade departments,like financial,educational,health and distribution department,the liberalization level in Japan is higher than that in Korea and China.Furthermore,communication service also shares a high level of liberalization apart from traditional departments,which is indicial to the conclusion published by World Bank(2012)and OECD(2014).The trade cost,which is estimated by Novy(2011)gravity model,of China and other eight major trade partners,including Japan and Korea,suggests that the falling range of trade cost between China and Korea is larger than that between China and Japan.After analyzing the trade growth,this essay finds that the economic growth in three countries is the major cause of bilateral trade growth.However,the effect of trade cost and multilateral resistance suggests that the reduction of service trade cost between China and Korea has a significant influence on bilateral trade growth.Also the empirical test of the influence factors to trade cost suggests that bilateral physical distance has a large positive correlation effect on service trade cost and the things that have a large negative correlation effect on service trade cost are the market potential of service trade partner,bilateral cultural and custom distance and whether sign the free trade agreement.The study of influence factors to fixed cost and variable cost finds that the same explanatory variable has a stronger influence on bilateral variable service trade cost than bilateral service trade total service.Some explanatory variables which have a significant influence on bilateral service trade total cost may do not have the similar influence on bilateral fixed service trade cost.Finally,the research about export potential of China and other trade countries(regions)suggests that bilateral service trade cost has a significant and deep influence on China's service trade export volume.Meanwhile,the service trade export among China,Korea and Japan is on the phase of potential exploration or trade deficiency.Of course,there are some shortages during the process of writing this essay,which can be the subjects to be explored in the future.First,the sample database should be enlarged to increase the persuasion of service trade estimation model.The lack of service trade data is an accepted problem in academic field.This essay only estimates the service trade cost of China and other eight trade partners including Japan and Korea without covering all the countries in Asian-Pacific region.It is a pity but also a working direction for studying service trade liberalization under the background of regional integration.Second,this essay cannot estimate China's domestic service trade cost.Some scholars have used the 2002 input-output table in China to estimate its domestic service trade cost,but the result cannot be made when use the 2007 and 2010 input-output table.Recently,some scholars have make use of the data from the world input-output table and trade added value accounting measures to estimate trade cost,which may further deepen the research on trade cost,and it is also a direction for author to explore.