175/ DG Azevêdo: Enhanced participation of LDCs in services trade should be key priority
29 October 2019
On 29 October 2019, Director-General Roberto Azevêdo addressed a Dedicated Session of the Council for Trade in Services to review how WTO members are making use of the Services Waiver that allows them to grant more favourable treatment to service suppliers from least-developed countries (LDCs). This workshop provides an opportunity to “focus our attention on the task of better integrating LDCs into international services trade” and of “making the trading system more inclusive”, DG Azevêdo said.
Thank you, Mr Chair,
Excellencies,
Ladies and gentlemen,
Good morning.
I am pleased to welcome you today to this workshop on “Facilitating the Increasing Participation of Least Developed Countries in Trade in Services”.
This event is a sign of the commitment of WTO members to implement Ministerial Decisions for LDCs. As you know, the Nairobi Ministerial Decision mandates the Council for Trade in Services “to initiate a process to review the operation of notified preferences, on the basis of information provided by Members”.
Today’s workshop is part of that process. It is an opportunity to focus our attention on the task of better integrating LDCs into international services trade.
Enabling LDCs to increase their participation in international trade is an important part of making the trading system more inclusive.
In many developing countries, services now account for more jobs than agriculture or manufacturing. Services have lower fixed costs of production than manufacturing.
This means trading in services can lower the bar for MSMEs to tap into the gains from international trade. In LDCs, MSMEs account for the overwhelming majority of firms, making this particularly important.
Key services sectors, such as infrastructural services, also play an important role in determining whether firms can compete in export markets. So services trade can help LDCs diversify their exports.
As the 2019 World Trade Report illustrates, services trade has been the most dynamic component of global trade, growing at 5.4 per cent per year since 2005, compared with 4.6 per cent for merchandise trade.
The good news is that LDCs have shared in this growth.
Between 2005 and 2017, LDCs’ share in world services exports increased by 50%. But the less good news is that this was from a very low base, and LDCs today still only account for 0.3% of world services exports.
Further increasing the participation of LDCs in services trade, to promote their economic growth and development, should be a key priority for all WTO members. Doing so is one of the objectives set out in the GATS.
For example, important work has been done under the LDC Services Waiver. To date, 51 members have notified preferences for the benefit of LDC services and services suppliers. They account for 86% of global GDP and 86% of global trade.
However, there are more steps that we can take to help LDCs’ integration into global services trade.
For instance, capacity building is something important to bear in mind. LDCs need the tools and skills to be able to take advantage of any of these opportunities.
The list goes on. Therefore, this workshop is a valuable opportunity for members to share experiences and learn from each other about how best to facilitate this goal. It offers a platform to discuss the successes enjoyed by LDC services exporters, along with the challenges they still face.
Today’s discussions will enable members to learn how preferences notified under the LDC Services Waiver are being used, and how their utilization might be improved.
I encourage you to keep engaging constructively in this discussion. Working together, we can ensure that LDCs benefit more from global trade.
There is much to discuss — and much to do. Unfortunately, I cannot stay with you today, but I look forward to receiving a full report of the proceedings. I will continue to follow your work with great interest and stand ready to assist in any way I can.
Thank you.
Source: wto.org
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