Intra-EU trade and investment in service sectors, and regulation patterns

The paper sketches the basic patterns and facts about service trade, foreign direct investment and regulation in the EU. We conclude that the last decade trade in services has increased substantially, in particular in business services. This is also the case for foreign direct investment (in services). The level of regulation within the EU has decreased. Product-market regulation and FDI restrictions have been lowered. The process of deregulation proceeds with different speed, and this is the cause of an increased variance in the level of regulation over Europe. The level of regulation in the EU is relatively high in comparison with other OECD countries. The pace of deregulation in Europe during the 1990s was higher than in the United States, causing a process of convergence. Nonetheless, the level of product market regulation for non-manufacturing sectors is in the EU still considerably higher than in the USA.