A Study On The Tariff Equivalent Of Services Trade Barriers In OECD

With gradually deepening economic exchange, the service trade is increasing rapidly since21century. According to the statistics of WTO, the average annual growth rate of the services trade is higher than that of the commodity trade between2000and2012. In this background, the Chinese services trade enters fast developing period. In2000, the amount of trade in services of China was only66.464billion dollars. But this figure already climbed to473.037billion dollars, in2012. Unfortunately, the blooming of services trade in China does not come with the rational structure of services trade. From the beginning of2000, the Chinese services trade has been in the state of deficit. Especially in recent years, this deficit is expanding rapidly. In this phenomenon, the Chinese scholars try to explain why the Chinese services trade is deficit and why the structure of services trade is unbalance. The research results show that three different reasons give rise to this phenomenon. First, the structure of Chinese productive trade is unreasonable. Second, input of China’s productive trade is relative lack. Third, the trade barriers in trade partners of China hinder the export of Chinese services trade in some extent. After summarizing and analyzing the relative papers, this paper finds that the deficit of Chinese services trade can be better explain from the aspect of the partner’s trade barriers. Not only it can explain the concern in the first two aspects, but also measure the potential export flow in service trade. Although it have been proved that the existent of partners’trade barriers is one of the reasons which lead the deficit of Chinese services trade, the partner’s trade barriers is rarely measured. Meanwhile, as OECD is the most important importer of Chinese service trade, this paper tries to measure the services trade in OECD.The empirical research will be taken in measuring the trade barriers in services. In the condition of complete statistics, the traditional method can be used in the empirical research. In fact, the absence of statistics in services trade flow between two countries is pretty normal. If the traditional way is used in the empirical research of services trade, the regression results are biased and can made sample self-selection. To avoid such problem, Heckman’s Sample Selection model is chosen to modify gravity model in Anderson and Wincoop (2001) with. Base on that, this paper calculates the tariff equivalent of services trade barriers of OECD in the year of2008.On the base of empirical regression, some conclusions are found. First, the average prediction of trade flow is not equal to the actual average trade flow. Second, the higher degree of trade barrier is always negative to the more poor country, but exception exists. Third, comparing to other two sectors, the equivalent of trade barriers in finance services is biggest.Base on the conclusion, several suggestions are given, which are relevant to promoting the Chinese services exporting to the OECD nations. Firstly, the Chinese government should strengthen the communication between the trade partners. Secondly, according to the services strategy and the different degree of trade barriers, the government should plan different export measures. Thirdly, China should strengthen exporting to those which are the similar culture background and border with China. Fourthly, the Chinese government should rapidly develop the emerging services sectors. Fifthly, the strategy of diversified services trade export should be implemented.The main contribution of this paper contents two aspects. One aspect is in the research method. In this aspect, we extend the gravity of Anderson and Wincoop (2001) by the Heckman’s Sample selection. The other one is about the research content. In this paper, we measure the tariff equivalent of trade barriers in services trade total, communication services, finance services, and computer and information services. Meanwhile, this paper explain the phenomenon of "lack of import" and "excessive import" appearing in the conclusion.Due to the limitation of author’s skill in researching, some shortcomings exist in this paper. First, the price index of trading commodity in importer and exporter is needed in the empirical research, but such statistics is absence. So CPI is chose to replace such index. But in that way, the regressive result is unavailable bias. Second, this paper only considers three kinds of model in service trade except of the model of the commercial presence. Third, the service trade barriers of OECD in2008are computed. But the computed results can’t reflect the process of dynamic change. In future studies, we will make up those deficiencies.