Non-tariff Measures in Services Sector: a PPML Analysis

The paper presents an analysis of the tariff equivalent (AVEs) of regulations in the services sector, employing sectoral-level estimates derived from the gravity equation. Our findings indicate that advancements in information and communication technology have diminished the significance of traditional factors such as geographical distance and historical ties. Furthermore, we observe a positive correlation between trade barriers in the services sector and a nation’s level of economic development, suggesting that adherence to regulations tends to increase with per capita income. Moreover, our analysis reveals heterogeneity in protectionism across different sectors, with an apparent indirect relationship with the developmental stage of a country. On average, the gas sector emerges as the most heavily protected sector, whereas the air transport sector is relatively more open. AVE values across all sectors, Luxembourg, Singapore, Belgium, and Ireland emerge as the most open economies, while Bangladesh, Zimbabwe, Pakistan, and Tajikistan are the most restrictive.