Developing country businesses can shape their trade future.
What it takes: knowing the market, spotting the barriers and voicing interests in the right channels.
Services negotiations in the World Trade Organization (WTO) are moving slowly. As of May 2005, less than half of WTO members had tabled offers. Has the private sector in developing countries overlooked its interests in the negotiations? Businesses from the developing world can certainly identify priorities for services talks. They can recognize the nature of the services economy, pinpoint trade obstacles and articulate priorities to ensure that government representatives understand the main elements of a functioning services economy.
Understanding services essentials
Nature of the market, Businesses interested in shaping the international rules that govern services markets should have a sense of the national market: its size, scope, projected growth and employment profile. Service firms should be able to explain how their commercial activities interact and add value to agricultural producers and manufactures. This information is useful for public representatives responsible for negotiations and helps business support its case for specific negotiating priorities.
Telecommunications backbone. Service firms can explain the value of telecommunications infrastructure to business. They use it to find, market to and service foreign customers. The quality, cost and availability of telecommunications influence the competitive position of service firms at home and abroad.
Transparent rules and practices. Business can explain the importance of transparency in domestic regulation. The method of creation, publication, administration and adjudication of regulations has a direct impact on service firms' export activities. Regulatory transparency influences the time, quality and cost of providing services. It affects the ability of service companies to compete with domestic and foreign firms.
Uncovering export barriers
Business must recognize the nature, shape and form of typical services trade impediments to define its trade interests clearly. Obstacles to international trade in services may take the shape of government measures or regulatory barriers at the national and sub-national level, at home or abroad. An example: Anna Idana works as the sales and marketing executive of a Malawian auditing firm. The company is keen to establish a training centre in a neighbouring market to the south, but for Ms Idana, regulations to set up such an office there, which discriminate against foreigners, are a potential obstacle to trade.
Components of laws, regulations or administrative rules may create obstacles for service firms' export activities. For example, Kainja and Roberts, a legal practice also in Malawi, specialize in legislative advisory services in the area of privatization and energy policy. Their clients include individuals in foreign markets seeking advice on legislative issues. Potential trade obstacles for the firm are restrictions on financial transfers.
Blocks to trade in services aren't always obvious. Firms and associations use certain practices to identify them. W.K. Chan of the Hong Kong Coalition of Service Industries (CSI) says, "We keep in regular contact with our members, conduct periodic consultations and occasionally cooperate with academic institutions on studies to identify their interests."
Consultation, studies and collaboration are the best ways to uncover export barriers. Government hearings also help to identify services trade constraints, as they constitute a positive incentive for the private sector to organize itself and research trade obstacles.
Parliamentary or inter-ministerial hearings may also facilitate consultation between trade-enabling ministries and legislators who are instrumental in the negotiating process and the implementation of trade commitments. …