This paper surveys the literature on trade in services, focusing on th
e policies that are used to restrict such trade, the gains from libera
lization, and the institutional mechanisms that have been adopted in t
he pursuit of liberalization. The paper argues that technological prog
ress and international trade negotiations are likely to keep liberaliz
ation of trade in services a high profile policy issue. It also sugges
ts that the research agenda should focus on developing better estimate
s of the welfare costs of protectionism in the service sector.