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Making Trade in Services Supportive of Development in Commonwealth Small and Lowincome Countries

image of Making Trade in Services Supportive of Development in Commonwealth Small and Lowincome Countries

This Economic Paper assesses new innovative measures in trade in service negotiations that reflect the vulnerabilities and challenges faced by developing countries. It outlines the approaches that can help small and lowincome countries employ the Special and Differential Treatment Arrangements provided under the WTO GATS in a manner that is practical and supportive of their economic development.

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Challenges Faced by Business in Maximising Export and Investment Opportunities Derived from Special and Differential Treatment

Given the small size of their domestic markets, service industries in developing countries, especially small and low-income ones, often need to be able to export in order to be able to reap economies of scale. However, they face a number of obstacles in doing so. Target countries may simply not permit access to the relevant service markets in their GATS schedules, at least in the supply modes that are of most interest to small service suppliers. Even where access is allowed, service suppliers may be impeded in their efforts to export by factors such as lack of information about export opportunities, difficulties in building an international reputation, lack of government support and high costs. Negotiation of an RTA can help in this regard. It may provide market access in sectors of interest to the exporting country. And the private sector can learn a great deal about potential export markets in the other country or countries that are party to the agreement if, as is often the case, it is closely involved in the negotiation process.

English

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