@article{Balistreri:332152,
      recid = {332152},
      author = {Balistreri, Edward J. and Tarr, David G.},
      title = {Services Liberalization in Preferential Trade  Arrangements: The Case of Kenya},
      address = {2011},
      pages = {36},
      year = {2011},
      note = {Presented at the 14th Annual Conference on Global Economic  Analysis, Venice, Italy},
      abstract = {In this paper we develop an innovative computable general  equilibrium model with foreign direct investment that  allows us to assess preferential trade agreements that  include commitments to multinational investors in services.  The model, which we apply to Kenya, contains Dixit-Stiglitz  productivity effects from additional varieties of  imperfectly competitive goods or services. To assess the  sensitivity of the results to parameter values, the model  is executed 30,000 times, and results are reported as  confidence intervals of the sample distributions. Our  central estimate for Kenya regarding a preferential  arrangement with the Africa region that includes services  commitments is that it will obtain very small gains; but  there is a two percent chance Kenya would lose from the  agreement. These possible losses show that there is an  imperfect competition analogy to trade diversion in goods,  whereby preferential commitments in services could be  immizerising. Further sensitivity analysis shows that  losses are more likely the more technologically advanced  are the excluded regions relative to the partner region,  and the greater the rent capture on initial barriers in  services. Estimated gains for a similar agreement with the  European Union are two to three times larger, and these  occur with probability one. Multilateral liberalization  would yield gains five times greater than a preferential  agreement with the European Union, but the largest  estimated gains derive from removal of regulatory barriers  that impose costs on Kenyan as well as multinational  service providers.},
      url = {http://ageconsearch.umn.edu/record/332152},
}