Business News Mon, 14 Oct 2019

Digital technologies changing service trade; driving costs down – WTO Boss

Service trade is changing really fast, the Director-General of the World Trade Organisation (WTO), Roberto Azevêdo, has said.

He stated that digital technologies are driving costs down and making it possible to deliver an increasing number of services remotely.

He said these during the launch of the 2019 edition of the WTO’s World Trade Report, the flagship research publication of the WTO.

He said: “The report shows that trade in services creates meaningful welfare gains for society through a more efficient allocation of resources, greater economies of scale, and an increase in the variety of services on offer. Services trade plays an instrumental role in improving firms’ competitiveness, in both services and manufacturing sectors.

“Services trade also matters for workers, in particular women, since services play a prominent role in women’s employment. Services exports support many jobs worldwide. And given the lower fixed costs of production, services — and services trade — can offer a more level playing field for micro, small and medium-sized enterprises (MSMEs).

“But there is still tremendous untapped potential. Trade costs in services are about twice as high as those in goods. Policy barriers account for some of these costs, of course, despite years of far-reaching, often unilateral, reforms to open services markets.

“So, what can we expect in the years to come? And how can this untapped potential be realized?

“Service trade is changing really fast. Digital technologies are driving costs down and making it possible to deliver an increasing number of services remotely. Meanwhile, demographic shifts, rising per capita incomes and climate change are increasing demand for health, education, environmental and other services.

“But expanding services trade further requires high quality institutions and regulation in importing countries. Reforms anchored in international cooperation could help reduce policy barriers to services trade.

“To conclude, services are a vitally important part of global trade. Services trade can create meaningful welfare gains for society and drive inclusiveness. But seizing these opportunities will require policy action — it’s not going to happen by itself. And that policy action will have to happen at the domestic and international levels. Services will have to become a central element of trade policy. And this is what we should all be striving for.”

Source: laudbusiness.com