International Provision of Trade Services, Trade, and Fragmentation

Deardorff examines the special role that trade liberalization in services industries can play in stimulating trade in both services and goods. International trade in goods requires inputs from such trade services as transportation, insurance, and finance, for example. Restrictions on services across borders and within foreign countries add costs and barriers to international trade. Liberalizing trade in services could also facilitate trade in goods, providing more benefits than one might expect from analysis merely of the services trade.