Regionalism in Services

Can regionalism do what multilateralism
has so far failed to do—promote greater openness of services
markets? Although previous research has pointed to the wider
and deeper legal commitments under regional agreements as
proof that it can, no previous study has assessed the impact
of such agreements on applied policies. This paper focuses
on the Association of Southeast Asian Nations (ASEAN), where
regional integration of services markets has been linked to
thriving regional supply chains. Drawing on surveys
conducted in 2008 and 2012 of applied policies in the key
services sectors of ASEAN countries, the paper assesses the
impact of the ASEAN Framework Agreement on Services (AFAS)
and the ambitious ASEAN Economic Community Blueprint, which
envisaged integrated services markets by 2015. The analysis
finds that over this period, ASEAN did not integrate faster
internally than vis-à-vis the rest of the world: policies
applied to trade with other ASEAN countries were virtually
the same as those applied to trade with rest of the world.
Moreover, the recent commitments scheduled under AFAS did
not produce significant liberalization and, in a few
instances, services trade policy actually became more
restrictive. The two exceptions are in areas that are not on
the multilateral negotiating agenda: steps have been taken
toward creating regional open skies in air transport, and a
few mutual recognition agreements have been negotiated in
professional services. These findings suggest that regional
negotiations add the most value when they are focused on
areas that are not being addressed multilaterally.