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Author(s)
David Riker
This article analyzes the weekly earnings in U.S. manufacturing and services industries, based on data for approximately 164,000 workers in 2014. It estimates the earnings premium in export-intensive industries, based on an econometric analysis that combines worker-level data on earnings, education, occupation, and other demographic characteristics from the Current Population Survey with industry-level data on exports and total shipments of manufactures and services. The estimates indicate that export-intensive industries pay more on average and that the export earnings premium is larger for blue collar workers in production and support occupations (they earn a 19.0% premium in export-intensive manufacturing industries and a 17.6% premium in export-intensive services industries) than for white collar workers in management and professional occupations (they earn a 9.9% premium in export-intensive manufacturing industries and a 12.0% premium in export-intensive services industries). Overall, the export earnings premium in 2014 is 16.3% on average in the manufacturing industries and 15.5% on average in the services industries.
Author(s)
Tamar Khachaturian, David Riker
We analyze trade in services using the economic model in Helpman, Melitz, and Yeaple (2004), which features multiple modes of supply and firm heterogeneity. We calibrate the model to the U.S. markets for architectural and engineering services and legal services, and then we estimate the economic impact of reducing fixed costs of supplying U.S. markets for these two types of professional services through cross-border trade and, alternatively, through affiliate transactions. Among other results, we estimate that reducing the fixed costs of trade in these professional services by half would have large effects on the value of cross-border imports into the U.S. market and on foreign affiliate sales in the U.S. market, but would have only small effects on the sales of domestic producers and on overall prices of the services in the U.S. market.
Author(s)
Tani Fukui, Christine McDaniel
The services sector is the next frontier in trade liberalization, and progress in this area is likely to bring enormous economic gain to developed and developing economies. A major impediment to services trade liberalization, however, is the lack of rigorous analytical work on its potential impact. Our aim in this paper is to propel the policy relevant research forward. Restrictions on services trade are far more complex than those on goods. While goods trade liberalization is relatively straightforward to model and its implications are fairly well understood, the same is not true for services. Services trade policy is often opaque and does not fit easily into computational models. Our survey of the current literature reveals a set of stylized facts that we hope will be useful in this area of computable general equilibrium modeling research: (1) barriers to trade in services are complex and heterogeneous across sectors; (2) services have significant effects on downstream industries; (3) market structure assumptions are crucial; (4) foreign presence is often necessary for services trade; and (5) many barriers are entry or fixed cost barriers that restrict foreign and domestic new entrants.
Author(s)
Isaac Wohl
During the last decade, online gambling grew in popularity while complex and overlapping gambling laws in the United States left its legal status ambiguous. The United States’ efforts to prosecute foreign-based suppliers of online gambling services prompted Antigua to file a complaint in the WTO, in which it claimed that the United States had violated its GATS commitment to free trade in recreational services. The WTO ultimately ruled in favor of Antigua and awarded Antigua the right to suspend $21 million annually in intellectual property rights held by U.S. firms. This dispute exemplifies the potential for market access commitments to have unexpected and undesirable consequences. The potential for suspending intellectual property rights as a retaliatory measure may increase the leverage of small countries in trade disputes with large countries, but the implementation and management of such a suspension may be difficult and costly.
Author(s)
Joann Peterson, Alan Treat
This paper reviews changes in global cargo security policies following September 11, 2001. The events of 9/11 led to the establishment of new protocols for tracking and screening cargo both in the United States and in foreign countries. These protocols have been incorporated into international frameworks such as those under the World Customs Organization (WCO), and in country-specific programs such as the Container Security Intiative (CSI) and the Customs-Trade Partnership Against Terrorism (CTPAT) administered by the United States. In addition, a host of foreign countries, including Australia, Canada, Sweden and New Zealand have introduced new cargo security programs following 9/11 or have strengthened previously existing programs. Many of these countries aim to harmonize their cargo security standards with those of the United States. Although substantial progress has been made in the development of post-9/11 cargo security programs, some have expressed concern regarding the programs’ efficacy, their costs to business, and their effects on cross-border trade. At present, post-9/11 cargo security programs continue to be refined, which may ultimately lead to changes in the direction and implementation of these programs.