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    Identifying Business Interests in WTO Services Talks

     

     
     
    © International Trade Centre, International Trade Forum - Issue 2/2005 
     

    Photo: photos.com 

    Developing country businesses can shape their trade future.

    What it takes: knowing the market, spotting the barriers and voicing interests in the right channels.

    Services negotiations in the World Trade Organization (WTO) are moving slowly. As of May 2005, less than half of WTO members had tabled offers. Has the private sector in developing countries overlooked its interests in the negotiations? Businesses from the developing world can certainly identify priorities for services talks. They can recognize the nature of the services economy, pinpoint trade obstacles and articulate priorities to ensure that government representatives understand the main elements of a functioning services economy.

    Understanding services essentials

    Nature of the market. Businesses interested in shaping the international rules that govern services markets should have a sense of the national market: its size, scope, projected growth and employment profile. Service firms should be able to explain how their commercial activities interact and add value to agricultural producers and manufactures. This information is useful for public representatives responsible for negotiations and helps business support its case for specific negotiating priorities.

    Telecommunications backbone. Service firms can explain the value of telecommunications infrastructure to business. They use it to find, market to and service foreign customers. The quality, cost and availability of telecommunications influence the competitive position of service firms at home and abroad.

    Transparent rules and practices. 

    Business can explain the importance of transparency in domestic regulation. The method of creation, publication, administration and  adjudication of regulations has a direct impact on service firms' export activities. Regulatory transparency influences the time, quality and cost of providing services. It affects the ability of service companies to compete with domestic and foreign firms.

    Uncovering export barriers

    Business must recognize the nature, shape and form of typical services trade impediments to define its trade interests clearly. Obstacles to international trade in services may take the shape of government measures or regulatory barriers at the national and sub-national level, at home or abroad. An example: Anna Idana works as the sales and marketing executive of a Malawian auditing firm. The company is keen to establish a training centre in a neighbouring market to the south, but for Ms Idana, regulations to set up such an office there, which discriminate against foreigners, are a potential obstacle to trade.

    Components of laws, regulations or administrative rules may create obstacles for service firms' export activities. For example, Kainja and Roberts, a legal practice also in Malawi, specialize in legislative advisory services in the area of privatization and energy policy. Their clients include individuals in foreign markets seeking advice on legislative issues. Potential trade obstacles for the firm are restrictions on financial transfers.

    Blocks to trade in services aren't always obvious. Firms and associations use certain practices to identify them. W.K. Chan of the Hong Kong Coalition of Service Industries (CSI) says, "We keep in regular contact with our members, conduct periodic consultations and occasionally cooperate with academic institutions on studies to identify their interests."

    Consultation, studies and collaboration are the best ways to uncover export barriers. Government hearings also help to identify services trade constraints, as they constitute a positive incentive for the private sector to organize itself and research trade obstacles.
    Parliamentary or inter-ministerial hearings may also facilitate consultation between trade-enabling ministries an legislators who are instrumental in the negotiating process and the implementation of trade commitments. The value of these gatherings is in the awareness they create through media coverage, private sector research and discussion among those testifying.

    Services firms may identify constraints via intra-industry consultation at the national or international level. "As a coalition of service industries, we maintain close contact with our constituent members [industry and professional associations]. We also work with similar organizations elsewhere through the Global Services Network," Mr Chan adds.

    This is a delicate process for competing firms and their respective associations. They may discuss problems they have come across when operating in domestic and foreign markets and examine how trade obstacles affect business operations.

    Voicing concerns to others

    Service firms and trade associations may use common advocacy tools to communicate their interests. Some rely on the written word through letters to local newspaper editors, parliamentarians, trade ministers, regulators or chief executives.

    "We publish a journal on a quarterly basis and use it to highlight the activities and interests of our members," says Vee Maharaj of the Namibia Chamber of Commerce and Industry.

    Firms or associations can use declarations at important trade events to convey their interests. They can also prepare "white papers" identifying and explaining trade obstacles and their impact on business.

    Service enterprises and coalitions often rely on the spoken word to convey their trade priorities. They meet with public representatives to introduce and explain issues.

    Associations can also organize symposiums to discuss services trade issues and attract press attention. A useful skill that trade groups can learn is how to get their message out through the media.

    Michelle Hustler-Small of the Barbados Coalition of Service Industries observes: "Representatives of the [coalition] have appeared on television news and on well-known local talk shows to speak [about] members' trade interests."

    Service enterprises or trade associations can use structured meetings with policy decision-makers to convey their priorities. Firms may plan their strategy for such gatherings and assign spokespeople to explain their interests to representatives from the public sector. Beforehand, they will have established a consensus on key messages. They will most probably provide briefing documents on relevant trade issues, which explain in detail how barriers affect business operations. At the conclusion, participants will request specific action from the representatives to address their concerns.

    Focus on consultation and awareness

    A business sector that masters the significant aspects of the services market and defines the scope of trade obstacles will be adept in formulating trade interests. With ongoing and considered consultation among service firms and across industries, it can recommend specific impediments for removal at the negotiating table.

    Firms and associations can employ traditional advocacy tools to raise awareness nationally among those making implementation decisions, so that their voice is heard in the important trade dialogue that has such a significant impact on economic growth and development.





    High stakes for business in trade talks
     

    "Hong Kong is a trade-dependent territory, hence a rules-based system for trade is important for our business."
    W.K. Chan Hong Kong Coalition  of Service Industries
     


     

    "Most of our members are involved in exporting and importing goods and services, which makes it vital to have services negotiations."
    Vee Maharaj Namibia Chamber  of Commerce and Industry 


     

    "Trade negotiations are crucial to determining how the rules governing trade will impact service providers, and how service providers will operate in foreign markets and compete with foreign service suppliers in their domestic markets."
    Michelle Hustler-Small Barbados Coalition  of Service Industries
     


     

    Linda Schmid  is ITC Trade in Services Officer. She was involved in trade policy development for services in the United States and the Caribbean before joining ITC.
     



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