commitments and focuses exclusively on MFN barriers. For European Union countries, however, they took a weighted average of MFN and intra-EU policies.<sup>13</sup> Based on these data and the methodology they developed, Borchert, Gootiiz and Mattoo produced “Services Trade Restrictiveness Indices,” for all 11 sectors in all of the 103 countries.<sup>14</sup> Information on two questions came from additional sources. Regarding barriers to maritime transport services, information on participation in a “United Nations Liner Code,” came from the <mark>Convention on a Code of Conduct for Liner Conferences.</mark><sup>15</sup> <mark>Information related to</mark> intellectual property rights in retail services was based on whether the country is on the priority 301 watch list of the United States Trade Representative (USTR).<sup>16</sup>

# **2.3 Calculation of Services Trade Restrictiveness Indices from the World Bank Database According to the Methodology of the Australian Productivity Commission**

Although Borchert, Gootiiz and Mattoo calculated Services Trade Restrictiveness Indices (STRIs) based on the World Bank database and a methodology they developed, to date, the World Bank database of discriminatory services barriers has not been transformed into ad valorem equivalents. We use the data of the World Bank and transform it by building on a series of studies supported by the Australian Productivity Commission. First, these authors developed a methodology for calculating STRIs in several business services sectors. This included studies by McGuire, Schuele and Smith (2000), McGuire and Schuele (2000), Kalirajan (2000) and Nguyen-Hong (2000). STRIs were calculated and, crucially, ad valorem equivalents were also estimated (usually in separate studies). Since we need to use the regressions of the Australian authors for the ad valorem equivalents estimates, we first need to score the data on discriminatory regulatory barriers of the World Bank database consistent with the STRI methodology employed by the Australian authors.<sup>17</sup> In the case of the European Union countries, transformation of the World Bank database includes weighting the intra-EU and extra-EU services regulatory regimes. We ignored preferential arrangements other than for the EU.

> 13 The decision to account for preferential services policies within EU countries is in contrast with the OECD Services Trade Restrictiveness Indices which ignore preferential liberalization throughout. See: http://www.oecd.org/tad/services-trade/methodology-services-trade-restrictiveness-index.htm

> 14 Landlocked countries were not included in the maritime sector survey, so the database is for less than 103 countries in this sector. The underlying data and the Services Trade Restrictiveness Indices of these authors are available at http://iresearch.worldbank.org/servicetrade/.

> 15 See: http://treaties.un.org/pages/ViewDetails.aspx?src=TREATY&mtdsg_no=XII-6&chapter=12&lang=en)

> 16 See http://www.ustr.gov/about-us/press-office/reports-and-publications/2011/2011-special-301-report.

> 17 The scoring methodology of Borchert, Gootiiz and Mattoo differs in significant ways from that of the Australian authors.

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