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The Multilateral Trading System Basic Elements - TAS

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The Multilateral Trading System Basic Elements -  TAS Powered By Docstoc
					SERVICES AND
DEVELOPMENT

       February 2004
  Trade in Services Division
            WTO

                               1
             02.04
INTERNATIONAL
SERVICES TRADE:
General Picture


                  2
Services: Economic importance

 Share in Production and Employment
  Between less than 30 and over 70 per cent,
  depending on resource structure and level of
  development of an economy

 Share in Total World Trade
  Some 20 percent (BOP-basis), but more rapid
  expansion than merchandise trade
                                                 3
    Chart I: Structure of output (value
             added), 1990 and 2001
    100%                                                      Services

     90%                                                      Industry

     80%                                                      Agriculture

     70%                  60
                                                         66

     60%
     50%
     40%
     30%
                          34
     20%                                                 30

     10%
                          5                              4
       0%
                        1990                         2001
                                                                            4
Source: World Bank, World Development Indicators 2003.
        Chart II: Structure of Output of
                Selected Countries, 2001)
  100%
   90%                                                                                        25
   80%                                                                      42          38
                                                                     48           43
                                                               54                                      50
   70%                               59             57   62
                 73   72        72         69
   60%
                                                                                        20
   50%                                                                            21
   40%                                                                                        67
                                                                     26
                                                                            49                         33
   30%                                              30         31
                                     37                  30                             43
   20%                                     27                                     36
                 25   26        27                                   25
   10%                                              13         15                                      17
                                     4     5             9                  9                 8
      0%         2    3         1




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                          Agriculture Value-added    Industry Value-added   Services Value Added


Source: World Bank, World Development Report 2003, Washington D.C.                                 5
              Chart III: World exports of goods and
                         services (1980 - 2002)
                   Exports of Goods   Exports of Commercial Services   GPD growth
                   Growth             Growth



             450                                                                13500
             400                                                                12000
             350                                                                10500
(1980=100)




             300                                                                9000




                                                                                        Billion $
             250                                                                7500
             200                                                                6000
             150                                                                4500
             100                                                                3000
              50                                                                1500
               0                                                                0



Source: WTO Statistics Division.                                                    6
INTERNATIONAL
SERVICES TRADE:
Implications for
Development


                   7
A Priori Expectations
“The gains from liberalizing services may be
substantially greater than those from liberalizing trade
in goods, because current levels of protection are
higher and because [there would be] spillover benefits
from the required movement of capital and labour.”
(World Bank, 2001).
Infrastructural services such as telecommunications,
finance and transport are crucial determinants of
overall economic efficiency and growth.


                                                      8
Services trade and development:
Some estimates
 Lack of competition in maritime transport (cargo
  reservation, restrictions on port services, collective
  rate setting, etc.) can increase freight rates up to
  25 % on certain routes.
 Economies that fully liberalized investment in
  telecom and financial services grew about 1.5 %
  faster over the past decade than others.
 Services liberalization in developing economies
  could provide as much as US$6 trillion in additional
  income between 2005 and 2015.
   Source: World Bank, 2001.                               9
Services trade and development:
Necessary conditions
 Appropriate sequencing of reforms
  [(re-)regulation/liberalization/privatization]
 Contestable markets (effective competition) to
  prevent private rent-seeking
 Effective regulation, including prudential rules,
  to protect consumers and the public interest
Note: The Preamble of GATS expressly recognizes “the right of
      Members to regulate and to introduce new regulations…
      to meet national policy objectives”.
                                                          10
INTERNATIONAL
SERVICES TRADE:
Participation of
Developing Economies


                       11
Chart IV: Services exports by economic
          groups, 1990-2000 (per cent)
                          1980                                          1990
                                                    Developing
        Developing
                                                       21%
           23%



                                                                 Developed
                     Developed                                      79%
                        77%




                                                                    2002
                                 1995
           Developing                            Developing
              26%                                   26%



                          Developed                           Developed
                             74%                                 74%




Note: Developing countries include LDCs and transition economies.

                                                                               12
Chart V: Services exports of different
         economic groups, 1990-2000
                      (Average annual percentage change)
12                                               9.9
10                                                           8.4
 8           6.1                5.4     5.5
 6
 4
 2
 0
         World            Developed   LDCs    E-Europe   Developing
                          countries                      countries
                                                         (incl. LDCs,
                                                         E-Europe)

 Source: WTO Statistics Division.


                                                                    13
Chart VI: Structure of commercial services
          exports of economic groups, 2001
                    (percentage share)
   100%
    90%
    80%                                             38         Other
                    47                 50                      commercial
    70%
    60%                                                        services
    50%                                                        Travel
    40%                                             37
                    31                 28                      Transport
    30%
    20%
    10%             22                 21           25
     0%
                World               Developed   Developing
                                    countries   countries
                                                (incl. LDCs,
                                                E-Europe)
 Source: WTO Statistics Division.                                    14
           Chart VII: Selected exporters of
            commercial services (US$ million)
 35000

 30000

 25000

 20000

 15000

 10000

  5000

     0



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                                                                                                    1990
                                                      R




                                                                                                    2001
Source: World Bank, World Development Indicators 2003.
                                                                                                   15
INTERNATIONAL
SERVICES TRADE:
Sector- and Mode-Related
Interests of Developing
Economies

                           16
Importance of individual
sectors (in addition to travel & transport)
•   Business Process Outsourcing(?)
•   Software Development(?)
•   Construction(?)
•   Health(?)
•   ... (?)
    Imponderables: role of technical progress,
    changes in relative prices, policy intervention


                                                      17
Importance of individual
modes
• Estimates:
  - Mode 1 = > 25 %         - Mode 2 = < 15%
  - Mode 3 = < 60%          - Mode 4 = < 5% (?)
• Situation may differ across sectors,
  depending on modes 2 or 4 being:
  – the main relevant modes
  – an alternative to other modes
  – a complement and facilitator of trade
                                             18
THE END


          19

				
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