Washington - The International Monetary Fund, the World Bank and the World Trade Organisation has collectively sought liberalisation of the global service sector, asserting that the barriers to these services trade currently is roughly as high as those to trade in goods about a half century ago.
The report “Reinvigorating Trade and Inclusive Growth” brought out collectively by the IMF, the World Bank and the WTO, comes at a time when the Trump administration has taken a tough stand on the H-1B visa issue, a move which has badly hit not only the technology professionals and highly skilled individuals from India, but also pioneering Indian IT companies.
Services comprise some two-thirds of global GDP and employment. Yet the limited opening of service sectors to foreign competition impedes trade and productivity growth throughout the sector and the broader economy, it said.
“As innovation further shapes which services can be traded across borders it is becoming even more important to address obstacles to that trade,” it said.
“It is also important that countries open up to international competition in services provided in other ways, including through foreign direct investment and the operation of foreign affiliates, and the temporary movement of workers across borders for the purpose of supplying services,” the IMF, the World Bank and the WTO said in its latest report.
Asserting that improved access to services from trade reform promotes economy-wide productivity and income growth, the report said given the sector’s size, the role of services productivity in overall economic performance is evident.
“Less appreciated, though, is the interplay between services reform and manufacturing performance,” it said.
Services comprise significant shares of the value added of all sectors in the economy, and this is reflected also in trade figures: while only a quarter of global trade is traded as services, on a value-added basis half of the value of global trade originates in service sectors, said the report.