VII - Conclusions

Summary

The empirical evidence presented for ASEAN's trade in services with West Germany, France, and the Netherlands, badly needs a yardstick, either a theoretical one or an empirical companion piece. Both are not yet available. Theory does not go beyond broad Heckscher-Ohlin type of explanations, and empirical analyses have been widely discouraged by conceptual confusion and lack of data. The paper has revealed earnings from exporting services to be important income sources for some ASEAN countries compared to merchandise trade. Payments to European residents for their services were shown to concentrate increasingly on skill-intensive business services. Singapore and Thailand are leading ASEAN suppliers of merchandise-related services as well as travel services but Indonesia and very recently, also Malaysia, made strong efforts to divert some flows of service payments directly to their accounts instead of participating in service packages offered mainly by Singapore.

Policy interventions implemented by ASEAN countries were not the subject of this study but they are very relevant aspects to be analysed later, for example, compulsory health standards to be met by foreign tourists, or cargo sharing principles in liner conferences. So are structural changes in the EC countries, mainly in the context of income elasticities in consumer services rising with growing personal income, particularly as far as deregulation in EC service industries is concerned. Thus, empirical evidence presented above is not only skimpy but is bound to become outdated with rapid technological innovations spurring new internationally tradable services, a more liberal trading environment and rising income levels of consumers.