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637230Pub00pub00id0187990 Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized CEFTA Region CEFTA inthe Services in Barriers toTrade A WORLDBANKSTUDY BorkoHandjiski Lazar Šestovic´ WORLD BANK STUDY Barriers to Trade in Services in the CEFTA Region Borko Handjiski Lazar Šestovi © 2011 The International Bank for Reconstruction and Development / The World Bank 1818 H Street NW Washington DC 20433 Telephone: 202-473-1000 Internet: www.worldbank.org All rights reserved 1 2 3 4 14 13 12 11 World Bank Studies are published to communicate the results of the Bank’s work to the development community with the least possible delay. The manuscript of this paper therefore has not been prepared in accordance with the procedures appropriate to formally-edited texts. This volume is a product of the staff of the International Bank for Reconstruction and Development / The World Bank. The fi ndings, inter- pretations, and conclusions expressed in this volume do not necessarily refl ect the views of the Executive Directors of The World Bank or the governments they represent. The World Bank does not guarantee the accuracy of the data included in this work. The boundaries, colors, denominations, and other information shown on any map in this work do not imply any judge- ment on the part of The World Bank concerning the legal status of any territory or the endorsement or acceptance of such boundaries. Rights and Permissions The material in this publication is copyrighted. Copying and/or transmi ing portions or all of this work without permission may be a violation of applicable law. The International Bank for Reconstruction and Development / The World Bank encourages dissemination of its work and will normally grant permission to reproduce portions of the work promptly. For permission to photocopy or reprint any part of this work, please send a request with complete information to the Copyright Clearance Center Inc., 222 Rosewood Drive, Danvers, MA 01923, USA; telephone: 978-750-8400; fax: 978-750-4470; Internet: www.copyright.com. All other queries on rights and licenses, including subsidiary rights, should be addressed to the Offi ce of the Publisher, The World Bank, 1818 H Street NW, Washington, DC 20433, USA; fax: 202-522-2422; e-mail: [email protected]. ISBN: 978-0-8213-8799-3 eISBN: 978-0-8213-8836-5 DOI: 10.1596/978-0-8213-8799-3 Library of Congress Cataloging-in-Publication Data Handjiski, Borko, 1979- Barriers to trade in services in the CEFTA region / Borko Handjiski, Lazar Šestovic. p. cm. — (World Bank study) Includes bibliographical references. ISBN 978-0-8213-8799-3 — ISBN 978-0-8213-8836-5 (electronic) 1. Service industries—Central Europe. 2. Central European Free Trade Agreement (Organization) I. Šeštovic, Lazar. II. Title. HD9986.C362H36 2011 382'.50943—dc23 2011020571 Table of Contents Acknowledgments .....................................................................................................................v Acronyms and Abbreviations ............................................................................................... vii 1. Introduction ............................................................................................................................1 2. Services and Trade in CEFTA Countries ...........................................................................3 The Share of Services in the Economy ..............................................................................3 Trends in Services Trade ....................................................................................................3 Signifi cance of CEFTA Trade in Services .........................................................................4 The Structure of CEFTA’s Services Exports .....................................................................6 Intra-CEFTA Trade in Services ..........................................................................................9 3. Barriers to Trade in Services by Sector ............................................................................ 15 General Market Access and Barriers ............................................................................... 15 Moving toward the EU ................................................................................................. 18 Sectoral Barriers to Trade in Services ............................................................................. 19 Construction ....................................................................................................................... 19 Domestic Regulation and Cross-border Provision ....................................................... 21 The View of Private Construction Firms ...................................................................... 23 Transport ............................................................................................................................ 25 Road Transport ............................................................................................................. 26 Rail Transport .............................................................................................................. 27 Legal Services ..................................................................................................................... 28 ICT Services ........................................................................................................................ 30 4. Conclusions ........................................................................................................................... 35 Tables Table 2.1 Shares in the National Economy of the Top Four Sectors by Country ..............5 Table 2.2 Modes of Cross-Border Supply of Services ...........................................................6 Table 2.3 Change in Exports of Goods and Services (Percent) ............................................8 Table 2.4 Structure of Service Exports, 2007–09 Average (EUR, Million) ..........................9 Table 2.5 Share of Exports within CEFTA in Total Exports, 2008 (Percent).....................11 Table 3.1 Arbitrating Commercial Disputes .........................................................................17 Table 3.2 Work Authorizations in CEFTA Countries ..........................................................18 Table 3.3 Ease of Obtaining Construction Permits ..............................................................22 Table 3.4 Summary Table of Regulatory Approaches To Construction in CEFTA Countries ...............................................................................................................24 iii iv World Bank Study Table 3.5 Total Land Freight Transport (Ton-Km, Billions) ...............................................25 Table 3.6 Share of Road Transportation in Total Land Freight Transport (Percent) ......25 Table 3.7 Logistics Performance Indicator ............................................................................26 Figures Figure 2.1 Average Share of Service Sectors in CEFTA Economies ....................................4 Figure 2.2 Services Trade in CEFTA and the EU, 2007–09 average (Percent of GDP) .....7 Figure 2.3 Exports of Goods and Services, 2007–09 Average (EUR) Million .....................8 Figure 2.4 Net Trade in Services by Country, 2007–09 Average (EUR Million) .............10 Figure 2.5 Trade in Services Within the CEFTA Region, 2007–09 Average, (EUR, Millions) ..................................................................................................................12 Figure 2.6 Mirror Gap Trade Statistics for Croatia and Serbia, 2009 (EUR Million) ......13 Figure 3.1 Time and Cost of Enforcing a Contract ..............................................................16 Figure 3.2 Ease of Leasing Land ............................................................................................23 Figure 3.3 Monthly Retail Price for 2 Mbps Broadband Internet Access 2010 (EUR) ....32 Boxes Box 2.1 Modes of Supply and Examples of Services .............................................................6 Box 2.2 Quality of CEFTA Service Trade Statistics..............................................................13 Box 3.1 The Experience of the EU ..........................................................................................28 Box 3.2 Expansion of Cross-Border Legal Services .............................................................30 Box 3.3 Obligations to Protect IP Rights Arising from the CEFTA Agreement ..............32 Acknowledgments his report was prepared by Borko Handjiski and Lazar Šestovi (World Bank). The Twork is based on country background notes prepared by: Milena Manojlovic (Serbia), Milica Djedovic (Montenegro), Andrej Bolfek (Croatia), Dimitar Ristovski (Macedonia), Ervin Mete (Albania), Adelina Sokoli (Kosovo) and Femil Curt (Bosnia and Herzegov- ina). The report was reviewed by peer reviewers Renata Vitez (CEFTA Secretariat) and Juan Sebastian Saez (World Bank) and additional comments were received from Marina Wes. The authors would also like to thank Satu Kahkonen and Juan Sebastian Saez for their advice, as well as Country Economists from the region: Agim Demukaj, Damir Cosic, Danijela Vukajlovic, Dusko Vasiljevic, Erjon Luci, Evgenij Najdov, Matija Laco for their support. Colleagues from diff erent sectors: Martin Humphreys, Carolina Mon- salve, Amitabha Mukherjee and Cem Dener provided us with valuable comments and input. Finally, we are grateful to Mismake Galatis for organizing the publishing.
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