149/ Public Forum reflects on how to adapt to services-based trading future
11 October 2019
At the 2019 WTO Public Forum, many discussions focused on how to adapt to a new trading environment marked by the growing importance of services, the most dynamic component of international trade. The four-day event from 8 to 11 October highlighted the important role services play in increasing productivity, creating jobs, improving living standards, and helping to meet the United Nations Sustainable Development Goals.
Ranging from architecture to health, voice-mail telecommunications and legal consulting, services are the most dynamic component of both developed and developing economies and their importance will continue to grow in the coming decades. This was highlighted by the 2019 World Trade Report launched on 8 October.
Unlike goods, services are intangible and their quality is difficult to assess for consumers. Various sessions at the Forum stressed that regulations are needed, notably in the areas of digitalization and artificial intelligence, while at the same time the impact of regulations on jobs and working conditions needs to be monitored.
Improving the institutional environment can help countries maximize the benefits stemming from services, said participants. It was also underlined that countries need to look at which domestic measures affect the ability of firms to export the services they produce, particularly in developing countries. Also under discussion was the need to identify how to reduce discriminatory barriers in accordance with WTO rules.
A key message was that the WTO’s role will be crucial in the coming years to better capture services trade and to help it thrive.
Improving data collection at the international level will be essential to capture the realities of services trade globally. Measuring trade in value added (TiVA) terms was said to be an important way of extracting sophisticated data on services within value chains. The TiVA database, developed by the Organisation for Economic Cooperation and Development (OECD) and the WTO, is an important tool in this respect. Another important tool recently developed by the WTO is the Trade in Services database by mode of supply, which measures services trade by sector. Participants also discussed how new data would affect policy-making.
Participants stressed the contribution of services to global value chains as services are often inputs into final products and can help increase the efficiency of global value chains. There is also the potential for many countries that depend on offshoring services in manufacturing processes to provide the service themselves.
The need for further work on data collection was highlighted. Obtaining firm-related data was a hurdle in many countries, it was stressed, making it difficult to assess where productivity is generated within these countries.
Furthermore, it was underlined that the multilateral trading system needs to adapt to the changing trading environment by intensifying services negotiations at the WTO. In this context, international cooperation was called for, including through sharing best practices on regulations and transparency of domestic measures.
Services were also cited as offering new opportunities for developing countries. New technological opportunities such as online platforms were mentioned as potential areas where developing countries could tap into greater economic growth. The growing participation of women in the health and education sectors was also stressed as an opportunity for more inclusive international trade.
Source: wto.org
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