Services Trade within Canada and the European Union: What to They Have in Common?

(Arjan Marcel) Lejour, Jan-Willem de Paiva Verheijden

Research output: Working paperDiscussion paperOther research output


This paper explains bilateral services trade using a gravity equation and compares the results with trade in goods. We analyse bilateral trade between the provinces of Canada and between the member states of the European Union. We conclude that the gravity equation explains the variability in services trade very well: market size of the exporting and importing regions and
distance are the most important explanatory variables. On average, distance is a less hindrance for services trade than for goods trade. Differences in languages and the regulation of product markets hamper services and goods trade in Europe significantly. Trade in services is also hampered by regulation in the importing country, but this is not true for goods. Services trade
within Canada is twice as high as within Europe measured as share of GDP. Tentative estimates suggest that intra-EU services trade could be much higher if the internal market would function like the Canadian services market.
Original languageEnglish
Place of PublicationThe Hague
PublisherCPB Netherlands Bureau for Economic Policy Analysis
Number of pages38
ISBN (Print)9789058332042, 9058332047
Publication statusPublished - Dec 2004
Externally publishedYes

Publication series

NameCPB discussion paper
Volumeno. 42


  • Handel
  • Canada
  • Regulering
  • Diensten
  • Service industries
  • EU-landen
  • Europe
  • Interne markt


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