EU-Moldova DCFTA: assessing the impact of the liberalization of trade in services on the Moldovan economy
EU-Moldova DCFTA: assessing the impact of the liberalization of trade in services on the Moldovan economy

Author(s): Valeriu Prohniţchi
Subject(s): National Economy, International relations/trade
Published by: EXPERT-GRUP Centrul Analitic Independent
Summary/Abstract: In this paper, we use a General Computable Equilibrium model to estimate the systemic impact of the liberalization of the trade in services. We find non-negligible positive impact of the liberalization on the Moldovan side, including higher GDP, labor income, activity level and trade level, as well as increased efficiency, primarily in the services sectors themselves. We do not find significant impact of the liberalization of imports of Moldovan services into the EU, because of the limited magnitude of the additional concessions compared to those already provided by EU members under the MFN regime. We find that, the reduction of trade margins in the distribution sector, following, for instance, higher number of players (including domestic) and dismantlement of the monopolistic structures, has a much higher economic impact than the freer market entry as such and the increased international personnel mobility in other services sectors.

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