Academic journal article Global Economic Observer

Services Export Promotion, a Priority within the Global World Economy

Academic journal article Global Economic Observer

Services Export Promotion, a Priority within the Global World Economy

Article excerpt

Introduction

The importance of international trade is widely recognized not only by the business sector, but also by governments. Governments all over the world have reviewed and streamlined their trade policies during the last decade. Economic reform programmes have improved the overall policy framework and created a more favorable environment in many countries.

In spite of this considerable resource endowment of trade promotion programmes, these programmes need to be selective in terms of products, functions and/or markets. An equal distribution of trade promotion resources over all products, functions and markets would obviously not make sense, as resources would be spread to thinly to reach anywhere a critical mass.

In spite of this considerable resource endowment of trade promotion programmes, these programmes need to be selective in terms of products, functions and/or markets. An equal distribution of trade promotion resources over all products, functions and markets would obviously not make sense, as resources would be spread to thinly to reach anywhere a critical mass.

In the context of globalization and increased competitiveness in the world market in general, and in Central and Eastern European countries, in particular, structural adjustment programmes and trade policy refonns are preconditions for economic growth and healthy trade performance. However, macroeconomic initiatives need to be complemented and supported at the microeconomic and operational level, in order to ensure a dynamic, outwardoriented and competitive business sector. Firstly, there is a need to improve the export supply response through institutional strengthening and enterprise-oriented assistance in areas such as product development and adaptation, trade finance, export quality management, export packaging, and better management of imported inputs. Secondly, efforts towards market expansion and diversification must be intensified, for example through the strengthening of business information networks.

Trade Promotion Organizations (TPOs) have a broad mandate to provide or coordinate trade support services in these areas.

A Trade Promotion Organization (TPO) is defined by the International Trade Centre UNCTAD/WTO from Geneva like a private or public institution with the main task to facilitate entry into foreign markets for a collective group of exporters and manufacturers of the home country. Governmental TPOs are those bodies set up by government as part of its infra-structure in order to facilitate foreign trade in general, but exports more in particular.

1. Recent Trends of the International Trade with Commercial Serv ices

The total dollar value of world merchandise exports (nominal terms) jumped 19 per cent to US$ 18.2 trillion in 2011. This increase was nearly as large as the 22 per cent rise in 2010 and was driven in large part by higher primary commodity prices.

Commercial services exports also grew 11 per cent in 2011 to US$ 4.1 trillion. The share of commercial services in total goods plus commercial services trade (on a balance of payments basis) was 18.6 per cent, the smallest such share since 1990.

Transport services recorded the slowest growth of any sub-category of services (8 per cent), followed by other commercial services (11 per cent) and travel (12 per cent). The slow growth of transport services is perhaps not surprising considering the close relationship between this category of services and trade in goods, which stagnated in the second half of 2011. An oversupply of new container ships may have also depressed revenues in the shipping sector.

The top five exporters of commercial services in 2011 were the United States (US$ 578 billion, or 14 per cent of the world total), the United Kingdom (US$ 274 billion, 7 per cent), Gennany (US$ 253 billion, 6 per cent), China (US$ 182 billion, 4 per cent) and France (US$ 161 billion, 4 per cent). The United Kingdom replaced Germany as the world's secondlargest exporter of services compared with last year's tables, but this was mainly due to a large upward revision in official statistics on UK exports of other business services and financial services, which together make up roughly half of all UK commercial services exports. …

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