Summary: With the slowdown of the multilateral negotiations in the World Trade Organization ( WTO) and the rise of the new regionalism,regional service trade agreements have become a realistic choice for all countries. The previous decade has witnessed a rapid growth in the number of regional service trade agreements. Meanwhile,the relevant contracting parties are no longer confined to the developed economies; they involve many emerging economies,which have the ambition to expand their service development space and obtain an increased market share to enhance their international competitiveness and status in the global labor division. However,only nine regional service trade agreements were concluded by China until 2011 with a relatively small number of contracting parties,which were mostly developing countries and accounted for only a relatively small part of China’s service exports. Therefore,the effects of such agreements on Chinese services export and its involvement in the division of labor in the global value chain are rather limited. Expanding the openness of service industries and developing a trade of services through regional service trade agreements can help China take the initiative in formulating new international trade rules and participate deeper in the global value chain,which is of critical importance in the present stage of the Chinese economy. In this study,we used the World Input-Output Database and the Wang et al. method ( commonly referred to as the WWZ method,2013) to estimate the service trade in value added in 40 economies from 1995 to 2011. Moreover,we used the regional service trade agreements data from the WTO regional trade agreement information system to construct the index of the service industry coverage. Then,we applied the gravity model developed by Anderson & van Wincoop ( 2003) and the Poisson pseudo maximum likelihood estimation technique to investigate the effects of the regional service trade agreements on service exports. After controlling for the bilateral trade cost,supply shocks at the exporter level,and demand shocks at the importer level with fixed effects,we found that the regional service trade agreements had significant positive effects on both the total and added value of service exports. The effects increased with an increase in the openness of the agreements. However,the effects on foreign value-added exports were greater than those on domestic exports. The promotion effects were significant in several robustness tests. Furthermore,from the perspective of the use of service products in importing countries,the effects of promotion on the total value and added-value of service exports were mainly achieved by increasing the intermediate service exports. From the perspective of the decomposition of a value-added service,the effects of promotion on the domestic value-added exports were mainly achieved through the domestic value-added exports created by an increase in the domestic service input. The results reported in this paper have several important implications for the trade policy of China. To promote the development of China’s trade in services and enhance the international competitiveness of service products and the status of the division of labor in the global value chain,the government must continue to deepen the reform of the market economy, ease the control on the service industry gradually,reduce the service industry access barriers,and encourage competition in the market. Moreover,the government must expand the openness of the service industry,rely on the construction of a freetrade zone,and actively contract regional service trade agreements to increase the market space for domestic services trade.



