Tradeflow Study - UNDP Black Sea Trade and Investment Promotion ...

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. In this regard, travel services have the highest potential for intra-regional growth in the region. Export of travel services in the region have generally outperformed the world market and commitments made by the WTO members of BSEC suggest that in the area of Market Access, there are relatively few limitations in cross border supply (mode 1), consumption abroad (mode 2) and commercial presence (mode 3) – see table below for an example of different modes of supply. Countries have also made commitments to predominantly not discriminate against service suppliers from abroad (national treatment principle) in modes 1-3. Overall travel services present large opportunities for intra-regional trade promotion. Definition and examples of modes of supply for exporting services Mode Scope of coverage of mode Cross-border supply which does not require a physical movement from supplier to consumer 1 (e.g. consultancy services, distance learning, etc.) Movement of the consumer to the country of the supplier 2 (e.g. tourism, education abroad or attending health care abroad) Services provided to the consumers of a foreign country through commercial presence 3 (e.g. hotel or bank establishing abroad) Services provided through the temporary movement of natural persons 4 (e.g. consultant or health worker) Source: WTO (2006) The General Agreement on Trade in Services: An introduction”, Geneva, March The second largest intra-regional trade potential was identified as being in transportation services. Exports of transportation services have outperformed the world market for many countries. Market Access in modes 2 and 3 is virtually entirely liberalised. However, in mode 1, all countries apply a number of restrictions for around half the subsectors. Typically, all countries apply restrictions on the temporary movement of natural persons (mode 4). Overall transportation services present some important opportunities for intra-regional trade promotion, but significant restrictions and impediments to trade apply which need to be addressed in order to fully benefit from the regional market. Other commercial services (which exclude construction, personal/cultural, financial, insurance, royalties and computer services) have a large potential for the region. All WTO members of BSEC have liberalised other business services in mode 2 and most of the subsectors in mode 3. Moreover, with the exception of Greece and Turkey most of the subsectors have been liberalised in mode 1. Most countries have unbound restrictions for mode 4 supply. For National Treatment, few restrictions exist in modes 1-3. Albania, Romania and Turkey have few restrictions in mode 4, while Armenia, Georgia and Greece have unbound limitations for mode 4. Overall, it appears that other business services presents a 10/135
high intra-regional trade potential since the sector is extremely dynamic in the region and restrictions are relatively limited for market access and national treatment. Other significant trade potential exists for computer and information services. Computer and information services have been performing far better than world trends for all countries in the region for both imports and exports (except for Russia for imports). Moreover most countries have no limitations on market access or national treatment for communication services, except in mode 4. Distribution services have few restrictions on market access and national treatment in modes 1-3 and thus indicate an important channel for cross-border trade in these modes of supply (mode 4 remains unbound for Armenia, Georgia and Greece, and partly unbound for Romania and Turkey). The chart below illustrates the breakdown of potential according to the different service sectors covered by this study. Indicative potential for trade in services in BSEC (sectoral share of total trade potential) Source: Authors’ calculations based on 2005 statistics from ITC, WTO, IMF Finally the study identifies a number of sectors which present opportunities for foreign direct investment in the BSEC region. The methodology employed is to identify bottlenecks to investment in the policy environment and analyse the level of FDI inflows, the FDI inward 11/135
Page 1: Black Sea Economic Cooperation: Stu
Page 4 and 5: . Table of Contents Abbreviations .
Page 6 and 7: . Table 15d. Greece’s Commitments
Page 8 and 9: . Abbreviations BSEC EBRD EU EUROST
Page 10 and 11: . econometric model, referred to as
Page 14 and 15: . stock and foreign affiliates acti
Page 16 and 17: Current account balance (% of GDP)
Page 18 and 19: % of GDP . The dynamism of the priv
Page 20 and 21: . I.2. Background to Trade and Inve
Page 22 and 23: . II. Trade Potential and Opportuni
Page 24 and 25: . As mentioned earlier, the major e
Page 26 and 27: Imports Perspective . There are cer
Page 28 and 29: . II.1.3 Intra-industry trade betwe
Page 30 and 31: j j . x is the value of total expo
Page 32 and 33: . Table 10 provides a summary of th
Page 34 and 35: . Table 11. Twenty five products wi
Page 36 and 37: . Wood and wood products, in parti
Page 38 and 39: . Metal products, in particular HS
Page 40 and 41: Maximum MFN in Region (%) . make cr
Page 42 and 43: . II.4. Services With the exception
Page 44 and 45: . Table 13. Performance of trade in
Page 46 and 47: . Table 14a. Indicative Service Exp
Page 48 and 49: . Table 14e. Indicative Service Exp
Page 50 and 51: . Table 14i. Indicative Service Exp
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Page 54 and 55: . Table 15b. Armenia’s Commitment
Page 56 and 57: . Table 15d. Greece’s Commitments
Page 58 and 59: . Table 15f. Turkey’s Commitments
Page 60 and 61: . Other commercial services (which
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. Table 16 Foreign direct investmen
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. In terms of existence of a legal
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. III.3. Sectoral opportunities BSE
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. service sector (retail, business
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. Table 23b. FDI in Bulgaria (2005)
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. Table 23d. FDI in Romania (2005)
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. Table 23f. FDI in Turkey (2005) I
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. of trade in services performance,
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. Egger, P. (2002), An Econometric
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. World Bank (2005), Trade, Transp
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. Annex 1. Trade Indicators 82/135
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. Table A2. Major Import Partners f
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. Table A4. Major Import by Product
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Albania Armenia Azerbaijan Bulgaria
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. HS Description ALB ARM AZE BGR GE
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. Table A7 Trade intensity in BSEC
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. HS Description ALB ARM AZE BGR GE
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. country I and country j’s capit
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. Annex 2.3. Results of Gravity Equ
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. Georgia Sector / Exports to ALB A
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. Russia Sector / Exports to ALB AR
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. Annex 2.4. Results of Trade Flow
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Annex 2.5. Results of Trade Flow An
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. Note: Excludes energy and tobacco
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