Unlocking the Potential of Services Trade in Latin America and the Caribbean
Expert Insights and Strategies for Development
The webinar “Trade in Services for Development: Empowering Latin America and the Caribbean Countries to Reap Development Dividends” brought together experts from the WTO, World Bank, Economic Commission for Latin America and the Caribbean, and Inter-American Development Bank to discuss ways to help the region take advantage of the opportunities offered by services trade.
According to the webinar, while services trade has become the most dynamic component of global trade over recent years, Latin American and Caribbean economies are still to fully harness its economic benefits. Developing economies have recorded strong growth in services trade over recent years, and services trade features increasingly in economic growth strategies.
However, in Latin America and the Caribbean, commercial services exports have grown by an average of 4.8% per year since 2010, below the world average of 5.5% per year. Growth in exports of digitally supplied services in the region has also been below the global growth rate.
“Services trade has tremendous growth potential globally,” said Deputy Director-General Johanna Hill. Referring to the WTO’s latest Global Trade Outlook and Statistics Report, she noted that “while the value of world merchandise trade in dollars decreased by 5 per cent in 2023, commercial services grew by 9 per cent in value.”
The Executive Secretary of the Economic Commission for Latin America and the Caribbean, José Manuel Salazar, called for the development of “realistic and flexible strategies to allow Latin American and Caribbean countries to take advantage of the opportunities offered by the new rules and realities of globalization”. He added: “In this way, we would advance towards the goal of working towards a more productive, inclusive and sustainable future.”
The Vice-President of the Inter-American Development Bank (IADB), Anabel González, said that services trade represents a significant opportunity for growth in the region and underscored the potential of knowledge-based services. She added: “The IADB is ready to deploy a roadmap to fully leverage the benefits of knowledge services in the region, including through promoting digital infrastructure and transformation, streamlining regulations, enhancing innovation ecosystems, bridging skills gaps, and fostering deeper regional integration.”
The Secretary General of the Secretariat for Central American Economic Integration, Francisco Lima Mena, emphasized the need to address data gaps in trade in services, facilitate the participation of developing economies in international negotiations and build their capacities and skillset, including digital know-how.
Building on the “Trade in Services for Development” report, the World Bank suggested elements of an Aid for Trade work programme on trade in services. This could include expanding the country coverage of trade in services statistics, improving services trade policy transparency, developing user-friendly competitiveness diagnostic tools, and identifying best practices in trade and investment promotion in services.
Other speakers in the webinar included Vilma I. Arbaje de Contreras, Vice Minister of International Trade of the Dominican Republic, Alejandro Buvinic, Director of the Division on Services, Investment, and Digital Economy in the Undersecretariat of International Economic Relations in Chile, and Dr. Richard Brown, Ambassador of the Permanent Mission of Jamaica. Drawing on their national experiences, they discussed opportunities, challenges and needs regarding trade in services and underlined the value in moving forward with an Aid for Trade strategy for services.
Conclusion
The webinar marks a first step towards new joint efforts by international and regional organizations to support the countries of the region in the context of Trade in Services for Development. The report highlights the contribution of services trade in helping developing economies diversify their economy, generate economic growth from increased exports and inflows of foreign direct investment and enhance regulatory governance.
FAQs
* What is the goal of the “Trade in Services for Development” report?
The report aims to help developing economies diversify their economy, generate economic growth from increased exports and inflows of foreign direct investment and enhance regulatory governance.
* What is the potential of services trade in Latin America and the Caribbean?
Services trade has tremendous growth potential globally, with commercial services growing by 9% in value in 2023, compared to a 5% decrease in world merchandise trade.
* What are the challenges facing the region in terms of services trade?
Challenges include addressing data gaps in trade in services, facilitating the participation of developing economies in international negotiations and building their capacities and skillset, including digital know-how.