Globalization is creating many new trade and growth opportunities, with services trade increasingly becoming an issue for export-oriented economies.
... See More + Services are important to country trade strategies, because they represent activities in which countries may have a comparative advantage, and they are drivers of competitiveness for the whole economy. This paper uses data from the World Development Indicators, two new databases (the Export in Value-Added database from the Global Trade Analysis Project, and Trade in Services data), and firm-level data. The paper employs a wide range of indicators to analyze the trade competitiveness of the services sector in the Russian Federation. Since service exports are less than would be expected considering Russia's level of development, the study finds that the contribution of services to export diversification could be heightened significantly. The scale of Russian business services exports is relatively low, although exports of traditional services, like transport and travel, are performing well. Despite the relatively minor importance of exports of modern services, the category of other business services has in recent years been growing fast, and business services have strengthened their revealed comparative advantages. Yet Russia still has much potential for expanding trade in modern services. There is also potential to diversify services exports to other markets, such as France, Germany, Japan, and elsewhere in Asia, which today seems underexploited. Finally, although exports of direct services are low, services such as transport, distribution, finance, and other business services are making major contributions to other exports, in particular energy.
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Policy Research Working Paper WPS7827 SEP 19, 2016
Saez,Juan Sebastian; Van Der Marel,Erik LeendertDisclosed
This report explores the sectors that will be instrumental for positive CU impact and competitiveness in the medium term. The initial chapter analyzes the gaps and opportunities the Kyrgyz NQI presents for capturing benefits of access to the enlarged common market across sectors.
... See More + The next three chapters take an in-depth look at three high-growth sectors and identify adaptation priorities and opportunities. Agriculture, services, and garments are a large and growing share of exports and are the sectors most likely to be transformed by accession to the CU and the increased tariffs to countries outside the EEU. Services added 56 percent to GDP in 2013, while agriculture contributed 18 percent, and manufacturing 16 percent. Exports in the garment sector were close to US$200 million in 2013, employing over 150,000 workers. The main findings of each chapter are summarized below followed by a summary of recommendations. This report is relevant to the Kyrgyz experience as it highlights important differences both in terms of regulations and technical requirements. The report highlights differences between the EU and CU regulatory systems in approaches to food safety and legislation, but it also analyzes the differences in infrastructure aspects of the NQI, such as testing laboratories and certification mechanisms between the EU and CU. The Customs Union approach is based on end-product compliance to a specific technical regulation or standard, whereas the European Union relies on preventive measures and minimizing risks associated with each process throughout the complete food chain. In the CU food control system, food control bodies verify that the end-product meets the required technical specifications established by the government; in the EU system, end-product attributes such as size, color, shape, smell, and taste are generally left to the marketplace to judge if they are acceptable. Importantly, the report pinpoints specific technical requirements for EU food safety that differ from the CU requirements (microbiological criteria for foodstuff, contaminants in food; maximum residue limits for residues of pesticides, and pharmacologically active substances).
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Working Paper 104735 MAR 01, 2016
Choi,Jieun; Saez,Juan Sebastian; Portugal Perez,Luis Alberto; Myburgh,Andrew Christopher; Van Der Marel,Erik Leendert; Molinuevo,Martin; Costantino,Lorenzo; Tynaev,Nurlanbek; Osavolyuk,Serhiy; Pasheva,VanyaEnglishDisclosed
The Kenya CEM has five main messages. First, Kenya has performed well in the past decade in terms of economic growth, and modern services are behind the acceleration of growth.
... See More + Expansion in these services, such as financial intermediation and mobile communications have stimulated demand for other services such as trade. The CEM discusses how to maximize the potential of services, especially given that most formal, high quality jobs are created in this sector. Second, agriculture, which still contributes to over a quarter of the economy, and manufacturing have stagnated. The CEM discusses the reasons behind this stagnation, noting that agriculture and manufacturing have not been able to create enough jobs for Kenya’s growing working age population. Most of the jobs are created by the informal economy and are concentrated in low productivity segments of trade, hospitality, and jua kali. Improving the ease of doing business is one way towards job creation and higher productivity. However there is still a need for creating job opportunities for the rural poor, for poverty reduction and achieving shared prosperity. Reviving agriculture, in particular, remains the pathway for poverty reduction. Third, accelerating growth to meet Kenya’s development goals requires technological advances and innovation that raise firms’ productivity. Fourth, achieving rapid growth will require macroeconomic stability to boost investment and savings. And as the government strives to build Kenya’s energy and transport infrastructure, this needs to be complemented with improvements in the public investment management process and better execution. Fifth, the discovery of oil opens a possibility for raising Kenya’s growth. Kenya’s recent oil discoveries, if used prudently, can contribute to achieving the Vision 2030 goals. The World Bank Group is proud of its long-standing relationship with Kenya, and looks forward to continuous collaboration with both National and County Governments and other partners. Working together, Kenya can realize its potential to lift millions of families out of poverty and achieve shared prosperity.
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This report explores the sectors that will be instrumental for positive CU impact and competitiveness in the medium term. The initial chapter analyzes the gaps and opportunities the Kyrgyz NQI presents for capturing benefits of access to the enlarged common market across sectors.
... See More + The next three chapters take an in-depth look at three high-growth sectors and identify adaptation priorities and opportunities. Agriculture, services, and garments are a large and growing share of exports and are the sectors most likely to be transformed by accession to the CU and the increased tariffs to countries outside the EEU. Services added 56 percent to GDP in 2013, while agriculture contributed 18 percent, and manufacturing 16 percent. Exports in the garment sector were close to US$200 million in 2013, employing over 150,000 workers. The main findings of each chapter are summarized below followed by a summary of recommendations. This report is relevant to the Kyrgyz experience as it highlights important differences both in terms of regulations and technical requirements. The report highlights differences between the EU and CU regulatory systems in approaches to food safety and legislation, but it also analyzes the differences in infrastructure aspects of the NQI, such as testing laboratories and certification mechanisms between the EU and CU. The Customs Union approach is based on end-product compliance to a specific technical regulation or standard, whereas the European Union relies on preventive measures and minimizing risks associated with each process throughout the complete food chain. In the CU food control system, food control bodies verify that the end-product meets the required technical specifications established by the government; in the EU system, end-product attributes such as size, color, shape, smell, and taste are generally left to the marketplace to judge if they are acceptable. Importantly, the report pinpoints specific technical requirements for EU food safety that differ from the CU requirements (microbiological criteria for foodstuff, contaminants in food; maximum residue limits for residues of pesticides, and pharmacologically active substances).
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Working Paper 104735 MAR 01, 2016
Choi,Jieun; Saez,Juan Sebastian; Portugal Perez,Luis Alberto; Myburgh,Andrew Christopher; Van Der Marel,Erik Leendert; Molinuevo,Martin; Costantino,Lorenzo; Tynaev,Nurlanbek; Osavolyuk,Serhiy; Pasheva,VanyaDisclosed
The Africa Competitiveness Report 2015 comes out at a promising time for the continent: for 15 years growth rates have averaged over 5 percent, and rapid population growth holds the promise of a large emerging consumer market as well as an unprecedented labor force that - if leveraged - can provide significant growth opportunities.
... See More + Moreover, the expansion of innovative business models, such as mobile technology services, is indicative of the continent's growth potential. However, Africa continues to be largely agrarian, with an economy that is underpinned by resource-driven growth and a large and expanding informal sector. Indeed, more than a decade of consistently high growth rates have not yet trickled down to significant parts of the population: nearly one out of two Africans continue to live in extreme poverty, and income inequality in the region remains among the highest in the world. What is more, across sectors - from agriculture to manufacturing and services - productivity levels remain low. It will be necessary to raise productivity across all sectors of the economy to achieve higher growth and create quality employment, and turn this progress into sustainable inclusive growth.
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Publication 96997 JUN 01, 2015
Bah, El-hadj M.; Conde, Carlos; Di Battista, Attilio; Hanouz, Margareta Drzeniek; Galvan, Caroline; Heinrigs, Philipp; Hoffman,Barak Daniel; Mckenna,Jonathan Miles; Moyo, Jennifer Mbabazi; O'Sullivan, Anthony; Saez,Juan Sebastian; Speakman,John F.; Verdier-Chouchane, AudreyDisclosed
The Service Trade Competitiveness Diagnostic (STDC) Toolkit is part of a larger agenda of trade competitiveness work developed by the World Bank's International Trade Unit in recent years.
... See More + Services are a key input in countries' trade competitiveness, as well as a new source of trade diversification, making it critical to understand what factors and main constraints matter most for services competitiveness. The Toolkit provides a framework, guidelines, and set of practical tools to conduct a thorough analysis and diagnostic of trade competitiveness in the services sector with a methodology that sheds light on a country's ability both to export services and improve its export performance through policy change. This Toolkit is designed to be used in a modular way. Either a full country diagnostic can be undertaken or various parts of the toolkit can be used to address specific questions of interest, whether they pertain to existing services performance, the potential for expansion and growth in services trade, or policy options to increase competitiveness in services trade. The output of an STCD can be used to assess either the overall performance of a country's services sector or the performance of individual sub-sectors. This Toolkit complements the analytical framework for trade in goods provided by the Trade Competitiveness Diagnostic Toolkit (World Bank, 2012), and allows policymakers and experts in developing countries to better integrate services into their overall trade strategies. In addition, it will also be of interest to international organizations and development practitioners in both policymaking institutions and academia.
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Publication 93714 JAN 14, 2015
Hollweg,Claire Honore; Van Der Marel,Erik Leendert; Saez,Juan Sebastian; Taglioni,Daria; Zavacka,VeronikaDisclosed
The Association of Southeast Asian Nations (ASEAN) brings together ten countries with over 620 million people and a combined gross domestic product of more than USD 2.5 trillion.
... See More + These countries are well integrated into the global economy and have benefited from this integration. And, as evidenced by their adoption of the ambitious goal of forming an ASEAN Economic Community (AEC) by 2015, they are committed to even deeper regional integration. This report takes stock of ASEAN’s achievements in services integration, delineates the potential gains from further integration and highlights the challenges that remain. Recognizing the role of services in spurring economic growth and job creation, including in manufacturing and agriculture, regional policymakers have committed to an ambitious plan for integrating their services sectors as a core element of the AEC. As the report highlights, there are successes in some sectors, such as in health in Thailand, education in Malaysia and finance in Singapore, on which future actions can build. Nevertheless, intra-ASEAN trade in services remains low relative to the economic size, complementarity and geographical proximity of ASEAN member states. As the report notes, there are still a range of policies in ASEAN economies that impede services integration. Overall, the data and analysis show that while there has been good progress in making commitments to integrate services trade, more needs to be done to fully realize the goals laid out in the AEC Blueprint. The report reviews approaches to negotiations and institutional processes underlying services integration. It provides a range of specific recommendations on implementing commitments, enhancing transparency, and strengthening the institutional framework and negotiating modalities. Finally, it highlights priorities for regional regulatory reform and cooperation as a means of deepening services integration.
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In recent years, services tradability has increased. Services that previously required the physical proximity between the consumer and the producer can now be delivered across borders.
... See More + As technology opens new channels for international trade in services, laws and regulations become more and more relevant in supporting this economic activity and setting the conditions for its success. Domestic regulations, such as limitations on foreign participation, monopoly rights, and laws that limit the temporary movement of people, directly affect the provision of services. Economic reforms that have privatized and deregulated industries over the last two decades have allowed for the greater participation of private providers, both national and foreign, in services such as telecommunications, finance, and transport. Other services, such as professional ones, which have traditionally been supplied by the private sector, are increasingly being exposed to international competition, expanding the variety and quality of services offered. But countries' legal and regulatory frameworks have not kept pace with these vast market (and policy) transformations. Now is an opportune time for countries to modernize their regulatory regimes and reap the economic and social benefits of increasing trade in services. Most administrations, especially in developing and least developed countries, face a number of constraints in adopting this agenda of modernization. First, reviewing a regulatory framework is a time- and resource-consuming task that requires highly technical knowledge. Second, most developing countries have limited skills and human resources to put in place new, independent, regulatory agencies, and at the same time maintain capacity to define broad policies in ministries that are often sector based. Finally, assessing the impact of existing regulations and designing suitable alternatives requires a careful balance between technical feasibility, trade impact, and policy goals. One objective of this toolkit is to help countries mitigate these costs. The toolkit is designed to assist policy makers, regulators, and experts in assessing their countries' regulatory environments. It proposes a three-step approach to the reform of services regulations. The first step is to map all regulations that affect a wide range of activities; this might include, for example, cataloguing the laws and regulations that affect investment, labor, and migration. The focus is not only on formal regulations but also on the administrative practices that determine how the regulations are applied. Many countries have state-of-the-art regulations on the books, but allow wide discretion in their application. This creates uncertainty, instability, and regulatory risks. In other cases, the institutional setting is weak, which undermines enforcement. In that situation, the regulations and their administration might be adequate, but the capacity to enforce those regulations may not exist.
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Unlike the movement of capital, the movement of labor across countries remains highly restricted-despite the huge global returns to international labor mobility.
... See More + According to one estimate, allowing the temporary migration of skilled and unskilled workers equivalent to 3 percent of the workforces of the world's developed countries would increase global welfare by more than US$156 billion a year. The objective of this book is to identify and discuss possible options for increasing services trade through the temporary movement of people, as a complement, not a substitute, to what can be achieved at the World Trade Organization (WTO), regional, and bilateral levels through trade agreement. Bilateral labor agreements (BLAs) could play a complementary role provided they are designed with the aim of promoting services trade through the temporary movement of people and fulfill specific requirements, including requirements that ensure temporariness. In general, such agreements have not been designed to promote trade in services; they have traditionally been tailored to facilitate or manage labor migration flows. The book is divided into two parts. Chapters one to three assess what has been achieved so far in trade agreements in terms of the temporary movement of services providers. They also discuss the pros and cons of using BLAs as possible channels for the expansion of trade in services. Chapter's four to eight use case studies to examine the viability and performance of BLAs as a complement to other efforts to liberalize the temporary movement of people. They are based on the experiences of sending and receiving countries in Europe, North America, the Caribbean, and the Pacific. BLAs can be an attractive option for middle-income countries whose migratory flows are relatively small and do not generate fears in receiving countries. Source country governments should make credible commitments to ensure the temporary nature of these flows. In conjunction with the private sector, they should establish mechanisms for selecting the sectors to promote in target markets.
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Services have a direct impact on the competitiveness of the goods sector. This paper illustrates the importance of logistics services, their trade dimension, and how regulatory issues act as perhaps one of the most significant barriers to competitiveness.
... See More + The paper discusses recent developments and the role and benefits of logistics services and argues that from a trade agreement standpoint, logistics is a network industry that ultimately provides one service to a final client. It analyzes logistics services from a services trade perspective and proposes that trade agreements should ensure access to and use of the infrastructure required to provide these services recognizing their interconnectedness. The paper offers suggestions on additional policies World Trade Organization members, and countries negotiating services agreements regionally or bilaterally, could follow in order to fully exploit the opportunities provided by logistics services. Local regulations and complementary policies in areas such as trade facilitation will always remain important.
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Policy Research Working Paper WPS6332 JAN 01, 2013
This volume is organized as follows. Chapter one discusses the newly revamped non-tariff measure (NTM) classification system, the data collection effort so far, and the key characteristics of the data.
... See More + It also highlights the private-sector view that NTMs should support domestic firms' competitiveness across countries. Chapter two describes the analytics of an NTM review, step by step through the key questions, for example, is there a market failure, which market is affected, what are the costs of regulatory action vs. the risks of deregulation, and explains how to answer these questions and how to go about quantification when it is possible. Chapter three focuses on the institutional setup and key principles required to successfully pursue the streamlining of regulations. Since the mid-1990s, developed countries have introduced new regulatory approaches aimed at improving the quality of the decision-making process by enhancing both the analytical framework used by policy makers and the participation of interested parties in the regulatory process. Finally, chapters four and five provide practical examples of streamlining NTMs. Chapter four overviews selected experiences with tackling the trade regulatory agenda at both country and regional levels. Chapter five presents case studies on streamlining NTMs, including technical regulation and prohibition, particularly illustrating the analytics that may support the review process. Finally, NTM reviews should be seen as part of national competitiveness agendas rather than as concessions to trading partners. When NTMs are perceived by the domestic private sector as hampering access to key inputs, business regulatory reviews should naturally lead to NTM reviews. Joint use of the triangle of products will facilitate the adoption by governments of coherent national competitiveness strategies centered on the reduction of trade costs.
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The book builds on previous research, including that by the World Bank, on trade in services. Such research includes analyses of the effect of liberalizing services in developing countries and sectoral studies on financial, transportation, telecommunication, and professional services, as well as on international negotiations.
... See More + The conceptual framework for this book is based on the existing literature on the service sector (Francois and Hoekman 2010; Hoekman and Mattoo 2008). Recognizing the heterogeneity in both, economic structure of developing countries and their service exports, this book takes an eclectic approach to identifying successful strategies. Chapter two surveys the literature on determinants of service exports and presents an illustrative empirical model that synthesizes the available models on trade in services. Because trade data on services are scarce and have a number of weaknesses, rigorous econometric analysis has serious limits. The subsequent chapters of the book examine the determinants of trade in services through case studies of the experiences of countries with varying degrees of success. The book analyzes service export performance for the following countries: Brazil, Chile, the Arab Republic of Egypt, India, Kenya, Malaysia, and the Philippines. The countries were selected on the basis of their performance in global trade (especially trade in services), their regional role, and the availability of data and because they have consciously pursued policies to promote service exports.
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Services play a broad and strategic role in the economy. Trade in services has been expanding rapidly because technological improvements have reduced the cost of cross-border exchange from infinity to virtually zero, thereby allowing for new export activities.
... See More + Trade in services, particularly business services, has become an element of export diversification for many developing countries. Besides traditional activities such as tourism, activities such as health and information and communication services are among the most successful services exports. This note focuses on the determinants of trade in services for developing countries.
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The aim of this book is to help policy makers, especially in the least developed countries, address the complexities of the organization, formulation, and implementation of trade-related reforms in the service sector.
... See More + The book provides a conceptual framework for trade policy making and negotiation and practical tools that may be used to guide negotiations on policies that affect the trade and investment in services. The aim is not to be prescriptive, but to provide practical recommendations and tools that may be applied in the pursuit of negotiations on services, including consultations and regulatory audits. Negotiators often have little basic information regarding existing regulations and the purpose of these regulations. This problem is compounded by the difficulty of translating existing regulations into the terminology and concepts used in trade agreements. Different methodological approaches are needed to manage different sets of laws and regulations. This book offers a simple tool to help countries organize information to address these challenges. The book also provides practical examples and negotiation exercises that aim to enhance understanding of ways to use the conceptual framework and related tools.
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Services play a broad and strategic role in the economy. The new focus in services arises because they have become increasingly tradable, allowing for the emergence of new and improved export activities.
... See More + Trade in services, particularly business services, has become a dynamic component of trade and an alternative for export diversification for many developing countries. Besides traditional activities (such as tourism), health, information technology, and communication services are among the most successful service exports. Developing countries seem to follow different policy approaches to trade in services, and diverse trade patterns appear to emerge. What determines the participation of a developing country in trade in services? And what is the role of international negotiations?
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The global economic crisis has triggered rapid responses by governments worldwide to counteract its domestic effects, through fiscal stimulus packages, expansionary monetary policies, and financial bailouts.
... See More + Ad hoc trade policy measures are increasingly being put in place. All countries share the responsibility of preserving a stable and predictable trade policy environment. To this end, trade policies must contribute to maintaining an open trading system consistent with World Trade Organization (WTO) principles. With the sharp decline in global merchandise trade volumes, expected to fall by 9 percent in 2009, countries have resorted to an array of measures to counter the detrimental effects of the crisis on their respective economies. Because this decline is a consequence of a deterioration of global demand, trade measures are not an effective response to this problem. On the contrary, policies that contribute to an open and stable trading system are the best policy option for the world community, especially in the current context.
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