Экономические
науки/ 9.Экономика промышленности.
Студентка Гаврилюк К.
Научный
руководитель: ассистент кафедры иностранных языков
Анисимова
Светлана Анатольевна
Донецкий
национальный университет экономики и торговли имени
Михаила
Туган - Барановского, Украина
Trade in Services
Trade
in services differs from trade in physical goods. This article highlights some
effects of liberalization of trade in services, especially the effects of
off-shoring. Many Western European companies settle new branches in Eastern
European countries, and this process is known as «off-shoring». This is a new
phenomenon discussed in the Western European press, particularly its effects on
the labour market. But off-shoring does not only create unemployment in the
country where branches were closed. Off-shoring can lead to adjusted wages in
the off-shored-sector: after a decline of wages, they can rise again.
Trade
in services is a new phenomenon. Economist scientists were looking for an
explanation of the international trade in complete goods. Due to recent
improvements in the transportation and communication technology, the trade in
services is currently increasing. Services are an important input factor for
physical goods. Most of the trade theories examined trade in goods and not trade
in input factors. There is a need for new models, which can explain trade in
services and implying consequences. There is a rise of export of trade in
services worldwide, in Europe, Germany, and Ukraine.
Deardoff (2001) explains welfare effects caused by the
liberalization of trade in services. He argues that many services are inputs
for physical goods. The liberalization of trade in there input factors can
reduce the real costs for any other producer of physical goods. The
liberalization of the respective tariffs creates welfare effect for the
consumer of these special goods. However, services are inputs for many goods,
e.g. transportation services. The liberalization in this sector reduces the
real costs for all users of transportation services, so such a reduction in
trade barriers has effects on other sector and creates welfare effects for many
consumers.
Barriers to Trade in Services
1.
Product movement provides, for example, no guarantees for property rights. E.g.
software cannot be exported abroad, because exporters fear illegal adoptions by
the people of foreign countries.
2.
Restrictions on capital movements can constrain investments in the services
sector, e.g. a company does not set up a new call centre n the foreign country.
3.
Restrictions on human movement. They reduce factor mobility and can increase
trade in goods.
4.
A services supplier cannot establish a new branch in the foreign market.
I consider that a
cut there barriers for trade in
services creates welfare effects for the whole economy because services are an
input for many physical goods .The liberalization of trade in services has
welfare effects, as shown in Deardoff
(2001)., the reduction of barriers has different effects. One of these
effects is discussed in Grossman and Rossi – Hansberg (2006). They assume that
the production of a good needs special task. There tasks , maybe a service like
software engineering, can be handled offshore in another country, for example
for considerations of coast- savings. Grossman and Rossi- Hansberg regard two
industries with perfect competition. Both industries need high – skill und low
– skill task. The firms produce two goods with constant returns to scale. But
the industries differ in their factor intensities; this means one industry uses
more low- skilled labour input than the other industry does. The productivity
of task, which can be done easier offshore, is rising. The reduction in the
costs for off- shoring has productivity effects. The demand for low- skilled
labour rises and thus wages for low-skill task rise as well. This leverages the
domestic labour market. Lower wages raise the demand for low – skilled labour
in both industries, and the wages rise again. However, the adoption of this
process is not time - invariant: unemployed low- skilled workers must reabsorb
in the economy. Unemployed workers in the countries with low social protection
must accept lower wages; they solve their labour supply with a cost – benefit –
analysis. This is a problem in the countries with minimum wage laws, «strong»
labour unions or other government regulations. Such structural « rigidities »
can explain high unemployment rates in the Western European countries.
Trade in services
and especially off - shoring are not the evil thing that creates unemployment. It
is a part of globalization; the politicians cannot it, but they can create an
institutional framework to support the liberalization of trade in services and
disburden the processes of adjustment, especially on the labour market. For
example, politicians actually claim: « Don`t offshore
this branch! » But why don’t they alternatives (competition, labour mobility),
so that the people in the home country and abroad benefit from off- shoring.
I think, the liberalization of trade in services
generates welfare effects because different industries can benefit from this
liberalization in the form of reduced costs.
However, people are afraid of their home companies going «off-shore»,
with foreign workers taking over their tasks and subsequently making the
workers in the home country unneeded. Grossman and Rossi- Hansberg show: if the
affected workers accept lower wages, the demand for low-skilled workers will
rise, thus wages in this sector can rise again. Therefore, the home country and
foreign country can benefit from « off - shoring» and trade in tasks.
Literature:
1. Bernanke, B.R. Frank: Principles of Macroeconomics.
2. Banga, R.: Trade in Services: A
Review, Global Economy Journal.
3. Bryson, J., P, Daniels, B. Warf:
Service Worlds.