Commonwealth Trade Hot Topics

The Trade Hot Topics series provides concise and informative analyses of various trade and trade-related issues which are prepared both by Commonwealth Secretariat and international experts.


Supporting the Development of Trade in Services in Small States and Low-income Countries

Small states and low-income countries (LICs) face significant challenges in their efforts to export services. They are primarily interested in supplying services from one country to another (also referred to in WTO jargon as ‘Mode 1’ or ‘cross-border supply’) and individuals travelling from their own country to supply services in another (referred to as ‘Mode 4’ or ‘temporary movement of natural persons’). However, Mode 1 and Mode 4 commitments are often linked to situations where a foreign company sets up subsidiaries or branches to provide services in another country (referred to as ‘Mode 3’ or ‘commercial presence’), which puts access out of reach of their small suppliers who lack the resources to invest abroad. Even where not linked to Mode 3, Mode 4 access is usually limited to highly-skilled individuals, not the lower-skilled where the small states and LICs have a competitive advantage. This issue of Commonwealth Trade Hot Topics outlines certain preferential measures in the context of both regional and multilateral trade arrangements that may help small and low-income countries develop and expand their services trade.


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