Strengthening the services economy and trade can make a powerful contribution to structural transformation that can lead to a services-led growth, said by Mina Mashayekhi, head of Trade Negotiations and Commercial Diplomacy Branch at UNCTAD, May 28, 2017, China.org.cn reported.
Mina Mashayekhi delivered a speech during the ongoing 2017 Beijing International Fair for Trade in Services, which lasts from May 28 to June 1.
In her eyes, globally speaking, the services sector forms the dominant segment of the economy in its own rights; they provide intermediate inputs to other economic activities including agriculture and industry; the sector plays an increasingly important role in trade.
Meanwhile, the sector is a key enabler of trade, as they enable global value chains (GVCs) by contributing inputs such as infrastructure services, professional services and business services necessary for production of goods. Furthermore, services trade has been more resilient than trade in goods and services sector are job creator. This is pertinent in the face of the uncertainty in future trade prospects associated with a recent backlash to globalization, as well as with the lack of mechanisms to effectively deal with adjustment costs, she added.
She also shared some lessons learned through longstanding work on services.
First, the establishment of policy, regulatory and institutional frameworks and capabilities need to precede privatization and liberalization; public policy goals need to be factored in trade agreements, and all regulations need to be periodically reviewed to test their continuing relevance. Second, it is important to secure effective consultative processes between government entities in charge of sectoral services policies, and other entities including competition authorities, independent regulators and trade ministry. Third, policymakers and regulators need to conduct multi-stakeholder consultations with affected businesses including MSMEs, particularly through coalitions of services industries, labour unions, civil society organizations and individuals, including those at the subnational and local levels, and take concrete actions for adjustment measures as appropriate including through social safety nets and creation of new jobs. Fourth, while continuing services liberalization can bring down barriers to trade in services, deepened international regulatory and development cooperation can be useful in addressing certain obstacles and facilitate trade in services. This is because trade barriers can also be associated with legitimate national policy objectives as well as diversity in national regulatory systems. In such a case, the emphasis is not on eliminating regulations per se, but on the management of these measures through cooperation among trade partners to minimize the potentially trade restrictive effects of regulatory diversity. Fifth, international cooperation including South-South cooperation is also useful, particularly in helping developing countries strengthen national policy regulatory and institutional frameworks, so that institutional limitations - e.g. in regulatory and human capacity, and fiscal capabilities - do not inhibit their ability to institute sound regulatory and institutional frameworks, thereby running the risk of their regulatory regime having inadvertent trade-distorting effects.
In conclusion, she believed that strengthening the services economy and trade can lead to a service-lead progress. However, this requires an enabling environment at national and international levels.