Barriers to Trade in Services in the CEFTA Region

Abstract

This paper describes the economic importance of the service sector in Central European Free Trade Agreement (CEFTA) countries and current barriers to trade in services between CEFTA countries. It looks at four sectors: construction, land transport, legal services, and Information and Communication Technology (ICT) services. The intent is to stimulate dialogue on trade in services between decision-makers in CEFTA countries. In CEFTA economies, export of services accounts for about 10 percent of GDP in non coastal countries and much more in coastal countries, where foreign currency earnings from tourism are the dominant form of service = exports. Though CEFTA countries have opened their markets considerably, mostly because they are pursuing accession to the European Union (EU) and the World Trade Organization (WTO), there are still obstacles to trade in services. Some, such as the movement of professional workers, are general; others are sector-specific. In what follows, the next section illustrates the importance of the services sectors in CEFTA economies and analyzes trends in services trade and in intraregional trade for countries that have such data available. The third section describes general barriers to trade in services, and specific barriers for the four sectors specified. The analysis reviews the legal and institutional framework for trade in services and features assessments by regional companies that export such services. The final section summarizes the findings.