Is EU services markets integration progressing? Analyzing EU trade in services through commercial presence
The bulk of research effort in the last decade on the EU internal market for services is devoted to the potential economic effects of the services directive. In this article we have focused on examining the past and current state of play in the internal market for services. Given that the biggest share of world services trade takes place through 'commercial presence', this paper looks at activities of foreign affiliates within the European internal market for services. Because statistics on activities of foreign affiliates (FATS) are still under construction, they are hardly ever used. This essay asks one major question: has the contribution of EU-controlled affiliates within the EU internal market resulted in a greater integration of EU services markets? Based on data for the 'Trade and repairs' section, one can observe an increase in intra-EU transactions on the outward FATS side simultaneously with a decline of intra-EU transactions in inward FATS. This shows that liberalisation within the EU internal market is not a dominant factor in determining 'commercial presence' patterns. (original abstract)
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