The Determinants of GATS Commitment Coverage

This paper investigates hypotheses about the determinants of trade and investment liberalisation with a particular focus on the market access and national treatment commitments under the General Agreement on Trade in Services (GATS). We set up a database of these GATS commitments and use the ratio of all commitments listed by a country to the possible number of commitments as a measure of liberalisation of market access/national treatment. Our empirical analysis suggests that larger and richer countries commit to more liberal regimes of market access and national treatment. This is surprising since economic theory predicts the largest welfare gains for low-skilled abundant (skilled-labour/physical-capital-scarce) economies. Also, our findings suggest that liberalisation is stronger among geographically close countries with strong ties in goods trade