PECC-ADBI Conference on Trade in Services: will a services only agreement be effective?

Services Trade: New Approaches for the 21st Century‘ conference was held by the Pacific Economic Cooperation Council (PECC) on 1-3 June 2011 in Hong Kong, China in collaboration with the Asian Development Bank Institute (ADBI), the Economic Research Centre of the Hong Kong Institute of Asia-Pacific Studies (HKIAPS), and the Institute of Global Economics and Finance at the Chinese University of Hong Kong (CUHK).

The significance of the services sector to the global economy is evident. As presented by Ms Maria Kwan, Director General of Hong Kong Trade and Industry Department in her opening speech, according to the WTO trade statistics, the value of total world services trade amounted to about US$7,170 billion in 2010, which is around 2.5 times that ten years ago. Except for 2009, the annual growth rate since 2004 has been well over 10%. However, despite its importance, the services sector as well as manufacturing and agriculture sectors have not made significance progress in multilateral agreements. The PECC through its media release views that:

In the face of persistent obstacles in the Doha Round, services leaders representing the twenty-two PECC member economies and the European Union recognized that it was now no longer viable to expect that a multilateral single undertaking under the WTO that combined services with manufacturing and agricultural issues could deliver in a timely way business outcomes in services.

Whilst it was an important step to further discuss issues on trade in services, the three day workshop did not provide sufficient time to cover a full range of issues related to trade in services. The PECC’s services research project summarises three areas that need further investigation:

1. Behind the border – enhancing the competitiveness of services

2. At the border – realizing the benefits from services liberalization

3. Improving the governance of services

Perhaps, one of the biggest challenges is how to attract more participation from developing countries. The contribution of the services sector is less significant for developing countries than it is for developed countries. Furthermore, ‘behind the border’ issues, which raise concerns over the competitiveness of local producers, continue to be reason to extend protection regardless potential benefits that the whole economy may receive if the country opens its market.

Promoting trade in services liberalisation also includes discussion on a wide range of technical issues. One example is cross-border data flows as mentioned by Kaaren Koomen of Australian Services Roundtable (see the video below). Data flows facilitate architects, engineers and many other services providers to export their services. This implies that a clear and transparent regulation of transfers of data should be put in place.

The rapid change in the services sector thanks to the fast progress in information and technology suggests that delays in multilateral negotiations may impede investments in the sector. Whilst multilateral agreement in services, manufacturing and agriculture would be our best option, given issues with manufacturing and agriculture sectors, is services only agreement a better choice?

See a post by Rist Permani on trade in services in Indonesia.


1 Comment

Filed under Conference, Economic Integration, PECC, Services, Trade

One response to “PECC-ADBI Conference on Trade in Services: will a services only agreement be effective?

  1. Pingback: Liberalisation of Trade in Services: Observations on Indonesia | GoLive Indonesia

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