WTO Members Agree to Cut Red Tape in Global Services Trade

Inu Manak and Alfredo Carrillo ObregonWhile politicians often spend an inordinate amount of time praising manufacturing and trade in goods, a  big portion of what is actually traded in the world is made up of services. Despite the importance of services trade to the global economy, the costs for engaging in services trade remain high. In fact, a 2019report by the World Trade Organization (WTO) found that the cost of trading in services is twice as high as the cost of trading in goods. This is because some of the barriers to trade in services are often “behind the border” measures, such as government rules and regulations, that can become significant obstacles to trade. This month, a group of 67 WTO members making up 90 percent of global services trade took action to cut red tape that can impede trade in services. This action not only shows t hat WTO members remain committed to negotiating agreements that liberalize trade, but also that they recognize the vital part services plays in the global economy.Why Does Trade in Services Matter?Services trade covers a  broad range of economic activity, such as transportation, tourism, logistics, finance, healthcare, entertainment, telecommunications, professional services, and many of these and other services are increasingly traded in digital form. Taken together, services trade accounts for more than60 percent of world GDP andover half of global employment. As Figure 1  shows, global commercial services exports were estimate...
Source: Cato-at-liberty - Category: American Health Authors: Source Type: blogs