Burgeoning trade in intermediate goods provides an opportunity for developing countries to apply services that can upgrade their economic capacities, the Global Services Forum was told.
The debate came during a morning panel session on "Services and value added" at the Forum, known as the GSF. The 28-29 May GSF, taking place in Beijing, is an UNCTAD conference held in cooperation with the Ministry of Commerce of the People's Republic of China, and with the Beijing Municipality.
The morning session featured two panels, the first addressing the topic of "Services as a catalyst of international trade through global value chains," and the second debating "From services to value added: trade policy implications."
Experts told the meeting that services are an increasingly important component in Global Value Chains (GVCs). Services were described by Ravi Ratnayake, Director of the Trade and Investment Division of the United Nations Economic and Social Council for Asia and the Pacific (ESCAP), as the component "glueing different value chains."
Lena Johanssen, Director-General of the National Board of Trade of Sweden, illustrated this importance by indicating that over 51 per cent of the value added of Swedish exports comes from services.
Speakers explained that business models are leading to news ways to carry out operations, new ways to reach the consumer, and new ways to reach global markets. They said services are critical to global value chains (GVCs) from different perspectives. For example, services add considerable value from the angle of trade facilitation, enterprise development, and skills upgrading. Thy noted that this is the case not only for goods production but for services value chains themselves.
It is important for governments to set strategies to enable such transformations to take place, panelists told the meeting. To achieve this, speakers agreed on the importance of macroeconomic policies, education policies (to upgrade skills and meet global standards), regulatory frameworks (particularly with regard to competition law and labour legislation), institution building, and coherence between policies. Speakers underscored that these aspects take time to build.
"Services are needed on a day-to-day basis in manufacturing, but their importance is not sufficiently understood as there is a mismatch between policy frameworks and concrete actions in negotiations," said Pascal Kerneis, Managing Director of the European Services Forum.
Hu Jinyan, Deputy Head of the Economic Affairs Department of the Liaison Office of the Central People's Government of Macao Special Administrative Region, added that linkages between different modes of supply are of critical importance in GVCs. This fact often is not recognized in trade negotiations, he noted.
