A Comparative Analysis On The Mechanism Of Regional Service Trade Liberalization Between China And The U.S

The United States is the world’s largest exporter in service trade. Service sectors play a very important role in promoting American exports, employment and economic growth. Therefore, the U.S. seeks to promote service trade liberalization both through multilateral and regional levels according to its competitive advantage. However, the stagnation of WTO’S Doha Round Negotiation hindered the United States’ desire of promoting service trade liberalization under the multilateral platform. As a result, the regional free trade arrangements gradually become the main platform for its promoting of service trade liberalization. Till now, the regional service trade liberalization mechanism of the U.S. has been far beyond the rules and regulations of General Agreement on Trade and Service (GATS) both in depth and scope. And also, it has been characterized by its high-standard, irreversible service trade liberalizing mode. Furthermore, this predominant mode, now, is being reinforced through the Trans-Pacific Partnership Agreement (TPP), the Transatlantic Trade and Investment Partnership (TTIP) agreement and Trade in service Agreement (TISA), which are three newly negotiated free trade arrangements by the U.S. and its partners. The fast spreading and strengthening of the United States’mode may re-construct the global service trade liberalization standards and regulations.China, on the other hand, has become the world’s largest exporter in goods trade, while most of its service sectors lack comparative advantage. In terms of service trade liberalization, China adopted the GATS mode by commitments in its accession to the World Trade Organization (WTO) at the beginning. Since then, as the development of its domestic service industry and the improvement of the comparative advantage of its service trade, China formed its own regional service trade liberalization mechanism gradually. The regional trade liberalization mechanism of China has somewhat surpassed the GATS standard. However, there is much difference comparing with the U.S. mode. In future’s negotiation and establishment of international service trade rules and regulations, the confliction between the U.S." comprehensive and high-standard service liberalization mechanism and Chinese carefully and gradually service trade liberalization mechanism is unavoidable. Therefore, it is necessary to analyze the difference between the two liberalization mechanisms, and flowingly, some applicable policy advices would be concluded. In this light, the choosing of this subject is of very practical significance.In this thesis, a method of comparative analysis is employed. After sorting out the ’GATS-plus’characteristics of Chinese and the United States’ service liberalization within the regional framework, the thesis compares their differences of the service trade liberalization mechanism mainly from4aspects, which including methods of service trade liberalization commitments, the degree of investment liberalization, the deepening and the expanding commitments on service sectors. On this basis, the thesis concludes the different standpoints and modes in regional service trade liberalization between China and the United States. Meanwhile, the thesis also makes a comparison between Chinese and American domestic service regulation system with a purpose of getting a general idea of the institutional foundation of each mode. Finally, the thesis tries to find the practical causes of the two modes according to the latest data.Based on the comparative analysis, this thesis finally draws conclusions from6aspects. Firstly, both the two kinds of regional service trade liberalization mechanism show "GATS-plus" features in the designing of service rules and framework. The "GATS-plus" features mainly include4aspects:commitment methods, the separation of investment rules from service trade rules, the deepening and the expanding of sector commitments. Secondly, after comparing the "GATS-plus" features between China and the U.S., the thesis finds that China and the U.S. adhere to different standpoints and modes in regional service trade liberalization mechanism. Chinese mechanism follows a gradually and steadily liberalization mode while the U.S. mechanism follows a radical and dominant liberalization mode. Their standpoints and modes are expressed through the methods of service trade liberalization commitments, the degree of investment liberalization, the deepening and the expanding of sector commitments. Thirdly, after comparing the setting of service trade regulating institutions, their responsibilities, and the cross-functional coordination of the two systems, the thesis finds that differences also consist in the coordination mechanism of the two economies" service trade regulation. And this contributes a lot to the different liberalization mode and opening ability. Fourthly, the analyzing of the recent service trade data indicates that the United States is an absolutely powerful service exporter. In facing of a slowdown of the growth rate in the global service trade and the difficulty in promoting service trade liberalization through the multilateral platform, it is reasonable for the U.S. choosing a radical and dominant regional service trade liberalization mode. On the other hand, as a newly emerging developing country, China lags behind in its domestic service industry. Consequently, it is reasonable for China to choose a gradually and steadily service liberalization mode. Fifthly, the competitive advantage index indicates the static and dynamic advantages/disadvantages in different service sectors, which provides practical explanations for the different opening priorities in service sectors, and the impetus of promoting service liberalization as well. Finally, the U.S. is promoting and pushing an American high-standard service liberalization mechanism through TPP, TTIP, TISA, especially TPP channel. This trend has exerted an inward pressure to China to follow a "one-step" liberalization mode. Meanwhile, the fast growing of Chinese service trade also demands a faster liberalization of service trade. Base on this new circumstance, it is necessary for China to seek a positive and steady service liberalization mechanism. And the successful experience of the U.S. in its regional service liberalization will provide much useful inspirations for China. However, American experience is just a reference; China should never use it without any modification and adjustment. A consideration of Chinese practical condition is always essential.There are mainly two innovative points. Firstly, by a comparative analysis of regional service trade liberalization mechanism between China and the United States, this thesis attempts to find some useful references for improving Chinese service trade liberalization. Secondly, the thesis attempts to seek the institutional backgrounds which impress the choosing of service trade liberalization standpoints and modes. However, due to the length of the thesis, the quantifying of the regional service trade liberalization is lacked in this thesis. And further studies on this subject still needs to be done in the future.