Mobilizing businesses to expand trade in services
For developing countries to tap the vast potential of the growing services sector, business communities must fully commit to expanding trade in services and tackling related regulatory issues, according to a new publication by the International Trade Centre (ITC).
The book, called ‘Mobilizing Business for Trade in Services’, provides an overview of how policymakers and people working in business can work together to develop specific services sectors, such as tourism; transport and logistics; communications; audiovisual; computer and business process outsourcing; financial services; professional and other business services; construction; distribution; and cultural and recreational services.
The guide offers information on trade negotiations and export strategies, as well as analysis and explanations of regulatory reforms and trade negotiations, which are needed to support a vibrant services sector in developing countries.
‘This book gives business coalitions and trade negotiators a foundation to make informed choices, as they shape trade in services accords and regulatory reform,’ said ITC Executive Director Arancha González. ‘Good policy and regulatory reform can minimize compliance costs, improve competitiveness and allow trade to grow.’
The growth opportunities in trade in services come from domestic markets as well as through increased trade with other countries, which can reinforce economic development and poverty reduction.
The contribution of services to gross domestic product (GDP) is growing in the developing world, accounting for more than 50% of GDP in many developing countries and more than 45% of GDP in many of the least developed countries. Exports of services have even weathered the financial crisis, steadily growing over the past decade in countries such as India, China and Brazil.
In services trade, most barriers relate to the way governments regulate services domestically. Trade agreements negotiated between governments or at the regional level have a direct impact on regulations in services, so the business community needs to understand the policies that drive government regulation, including the need to guarantee essential services, protect consumers, correct market failure, ensure adequate competition and meet social objectives.
Governments in turn need to recognize the business perspective on domestic reform and factor them into domestic policymaking and national negotiating positions for trade agreements.
Trade negotiations can be truly effective only if they take into account both government policy objectives and business priorities. Business coalitions, both national and across borders, can help promote business interests and ensure that trade negotiations factor in priorities such as improving regulatory transparency and investment protection.
For more information, read the book in print or online in English, French and Spanish.