Trade Policy Note Final-rev08 - Development
Trade Policy Note Final-rev08 - Development
Trade Policy Note Final-rev08 - Development
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VI.<br />
TRADE IN SERVICES<br />
AND DEVELOPMENT STRATEGIES<br />
<strong>Trade</strong> in services, as defined in the GATS covers a wide range of policy areas,<br />
including investment, communications, transportation, finance, energy, environment,<br />
health, immigration and many others. Government policies to develop the services<br />
sector are essential to the attainment of the MDGs. Governments are now faced with<br />
the challenge of formulating domestic policies in the services sector which provide<br />
universal access for key social services, while faced with pressures to accept bound<br />
liberalization commitments in trade agreements. The services sector should<br />
simultaneously support efficiency and growth, and increase developing country<br />
participation in the world market for services.<br />
Services and the MDGs<br />
The provision of universal access to key services such as health, water and sanitation,<br />
energy and education is central to the achievement of the MDGs. Ill health, poor<br />
education and lack of access to electricity lock millions of people in a poverty trap.<br />
Access to these services enables poor people to become productive member of the<br />
economy and society and reduces rural/urban and gender disparities. The<br />
strengthening of national services sectors and the creation of an efficient services<br />
infrastructure, contribut es to the productivity of other sectors and to international<br />
competitiveness. <strong>Trade</strong> in services can assist in the attainment of the MDGs by<br />
providing new and better employment opportunities, particularly for new job seekers,<br />
including women, by contributing to the productivity of poorer people, in both the<br />
agricultural and manufacturing sectors, and by facilitating access of domestic service<br />
providers to more lucrative world markets. The main objectives of a national services<br />
policy are thus, (a) to provide universal coverage for basic services such as health,<br />
water, sanitation, education and energy, (b) to strengthen the services infrastructure of<br />
the country to improve the competitiveness of the national economy, and (c) to<br />
penetrate international markets for trade in services.<br />
Universal Access to Services<br />
Many social and infrastructural services in developing countries have traditionally<br />
been under public ownership. A priority development objective has been to ensure<br />
universal access to key services, notably health, water and sanitation, education and,<br />
energy. For various reasons, including lack of ability to pay, geographical isolation or<br />
ethnic and gender factors, poor people have been excluded from access to the most<br />
basic services necessary to maintain their health, and to enable them to be productive<br />
members of the national economy. Governments have attempted to make basic<br />
services affordable to poor people by subsidizing free medical and education services,<br />
cross-subsidized prices for electricity, and investment incentives for sanitation and<br />
energy production in isolated areas. In some cases, the pressing need for capital and<br />
technology to increase supply has led governments to open up public services to<br />
private ownership, including the participation of foreign suppliers. This has brought<br />
these service sectors within the scope of trade negotiations 62 . The entry of foreign<br />
62<br />
The implications of GATS negotiations in traditional public service sectors are discussed in Adlung,<br />
Rolf, Public Services and the GATS, WTO Working Paper, ERSD -2005-03, Geneva, July 2005,<br />
http://www.wto.org/English/res_e/reser_e/ersd200503_e.htm.<br />
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