Book launch: ‘Research Handbook on Trade in Services’
Remarks by DG Azevêdo
Excellencies,
Ladies and gentlemen,
Good afternoon, and welcome to the WTO. I am very pleased to join you and to help launch this new handbook on trade in services. This is an important addition to a growing body of trade literature.
Services are central to the global economy, connecting countries, enterprises, and citizens around the world.
The services sector is, for the great majority of countries, the sector that accounts for the greatest share of domestic production and employment.
In fact, research shows that trade in services, when measured in value added terms, accounts for almost 50 per cent of world trade today. This is a greater share than manufacturing or agriculture, which are more traditionally associated with trade.
And in fact this measure does not fully take into account trade in services through commercial presence in a foreign country (the so-called mode 3). That mode of supply is critically important, as suggested by the fact that over two thirds of world FDI is now in the services sector.
Despite all of this, trade in services is sometimes regarded as an emerging issue, or something that is only of interest to some countries.
This view simply doesn’t reflect the reality today. It seems that we need to update our trade policy software!
The book we are launching today is an important step in that direction.
It looks at a number of key issues in relation to trade in services, through the legal, economic, and political lens.
It brings together experts with a range of perspectives. I am glad that a number of them could be here today to share their insights with us. I’d like to acknowledge Ambassador Tauqir Shah of Pakistan as well — thank you for taking part in this discussion.
This volume helps to highlight why trade in services matters so much.
For example, it shows how services provide the necessary infrastructure for trade in goods to flourish, whether in road transport, maritime transport, logistics, or distribution services.
It also showcases how services act as enablers of global value chains.
Without services crossing borders, it would be impossible to coordinate production stages in different countries. In fact, research shows that efficient services are a key determinant of export performance in manufactured products.
In addition, this book highlights the role of trade in services in a digital era.
In 2015, e-commerce in goods and services was worth around 22 trillion dollars, and has grown the fastest in emerging economies.
Again, services are a key enabler of these exchanges, in two specific ways:
First, on connectivity.
Telecommunication services, including the Internet, mobile telephony, and database services, provide the basic infrastructure and transmission capacity that allows for services and goods to be provided online.
The WTO binds and encourages openness in telecommunications services through GATS commitments. In this way the Organization has played a significant role in laying down some of these foundations for e-commerce to flourish.
Second, services can support diversification.
A large range of services, from professional services to education or even some health services, can be supplied electronically over digital networks. Indeed, trade in services under mode 1 is essentially electronic commerce. The growth in this area is providing opportunities for developing countries to enter these flows and diversify their exports.
So I think the importance of services for growth, development and connectivity is clear.
It is also clear to me that services will be central to the future work of the WTO. On negotiations, transparency and monitoring, disputes, or capacity building, our success depends to a significant degree on our ability to reflect the reality of the trading system, with services playing a major role.
This means seeing services as a topic that concerns not just a few. It is a key part of trade policies and an essential tool of economic development and connectivity.
The book we are launching today is a welcome reminder of precisely this point. It shows beyond doubt the value and importance of trade in services.
Also, for those familiar with what is happening at the WTO, you know that a lot that is on the table today refers to services. In addition to the DDA issues, which include services, there is interest from members on issues like e-commerce, services facilitation and investment facilitation. So clearly this book is also very timely.
I would like to congratulate everyone involved in this publication: WTO staff and all of the contributors. In particular I would like to thank the editors, Martin Roy from the WTO and Pierre Sauvé from the World Trade Institute.
We have a huge expertise here in the services area. And so it’s great that that expertise is being showcased, shared and put to good use.
I wish you all an interactive and engaging session.
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