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Www. thecommonwealth.org Trade in Professional Services – Effective Participation by the Commonwealth Caribbean Commonwealth Secretariat May 2006 Barbados.

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Presentation on theme: "Www. thecommonwealth.org Trade in Professional Services – Effective Participation by the Commonwealth Caribbean Commonwealth Secretariat May 2006 Barbados."— Presentation transcript:

1 www. thecommonwealth.org Trade in Professional Services – Effective Participation by the Commonwealth Caribbean Commonwealth Secretariat May 2006 Barbados. By. Andrew O. Satney

2 www. thecommonwealth.org The WTO and the General Agreement on Trade in Services (GATS) What are Professional Services? How are Professional Services Traded The Main Challenges How to address them. Professional Services Promotion Projects - the Trade Section Experience Global trend. Programme Focus: the issues

3 www. thecommonwealth.org Trade in Services governed by the WTO (1994) Defining what are Services? Professional Services: What are they? Modes of Supply. The global trade. Improving Export Competitiveness WTO and GATS (Rules)

4 www. thecommonwealth.org Defining International Trade in Services Services are traded internationally when the supplier and customer are from different countries, regardless of Location of the transaction

5 www. thecommonwealth.org Professional Services Trade Modes of Trade in Services: All “modes” of supply Mode 1 - Cross-border supply Mode 2 - Consumption abroad Mode 3 - Commercial presence Mode 4 - Movement of natural persons

6 www. thecommonwealth.org Professional Services Trade The Four Modes: Mode 1 – Cross-border Supply – information flows from one country to another via communication networks. E.g.. Accounting Services, architectural drawings transmitted via email,

7 www. thecommonwealth.org Professional Services Trade Mode 2: A consumer travels to another country to purchase a service. E.g. Health Tourism, Education Services.

8 www. thecommonwealth.org Professional Services Trade. Mode 3: Commercial Presence – a service supplier from one country establishes an office or branch in another country to provide a service. E.g.. Subsidiary of an insurance company.

9 www. thecommonwealth.org Professional Services Trade. Mode 4: Movement of Natural Persons - Where the individual(s) supplying the service physically go to another country to provide services. E.g. consultants; doctors.

10 www. thecommonwealth.org Global Services Trade Growth averaged 7% per annum 1993-2004 Growth recently reaccelerated after slow 2000- 2001 Moving away from traditional industries (transport, travel) and towards ICT, BPO, etc.

11 www. thecommonwealth.org Percentage Service Trade by Industry

12 www. thecommonwealth.org CARICOM Services Trade Main Trends 1997-2002 Total Services Exports increased by 14% from US$6.2 billion in 1997 to $7.1 billion in 2002 Total Services Imports increased by 24% from $3.7 billion in 1997 to $4.6 billion in 2002 Services trade balance stagnated or declined from 1999 Deficit on goods trade averaged more than US$ 5 billion over period Net deficit on external account in Caricom of US$2.7 billion in 2002

13 www. thecommonwealth.org Composition Percent total exports of goods and services

14 www. thecommonwealth.org SERVICES AS % GDP: 2000 Source: ECLAC (2002) Antigua92.9%Jamaica71.1% St. Lucia87.1%Trinidad67.9% St. Kitts84.2%Belize62.4% Barbados84.1%Haiti61.8% Grenada83.9%Suriname61.5% St. Vincent83.3%Guyana46.5% Dominica76.4%

15 www. thecommonwealth.org SERVICES AS % EXPORTS Source: IMF and ECCB Antigua91.4%Jamaica56.6% Montserr.91.0%Dominica55.0% St. Lucia81.9%Belize44.8% Barbados79.6%Haiti37.6% The Bahamas78.6%Guyana21.1% Grenada72.1%Suriname18.6% St. Kitts68.2%Trinidad12.5% St. Vincent66.9%

16 www. thecommonwealth.org Trends in OECS Services Trade: 1993-2002

17 www. thecommonwealth.org Composition of Caricom Services Imports 1997-2002

18 www. thecommonwealth.org OECS Services & Merchandise Trade Balances

19 www. thecommonwealth.org Overall Caricom Trade Balance 1997-2002

20 www. thecommonwealth.org Relative Share of Individual Caricom States in Total Services Exports 1997-2002

21 www. thecommonwealth.org What are Professional Services? Referred to as “knowledge-based” Services. There are over 69 identified sub sectors in the GATS; Difficult to define because it is not physical line a “good”. Involves mainly people and technology.

22 www. thecommonwealth.org Professional Services Contd. Construction-related Legal Health-related Market research Education-related Management consulting ICT and Software Development. Engineering Printing and Publishing.

23 www. thecommonwealth.org Trade in Professional Services: How can St. Lucia Participate.. No. 1. THE ENABLING ENVIRONMENT: The Role of Government in Providing the “Enabling Environment” !!!!!!!!!! No. Being Competitive – globally i.e. quality of service, competitive pricing, etc.

24 www. thecommonwealth.org Exporting Professional Services: Main Challenges Qualifications and \procedures to qualify (MRA and accreditation); Nationality and residency requirements; Restrictive visa and work permit; Government procurement laws Slow and inadequate legal processes; Lack of transparency – e.g. publication of regulations; Excessively high fees for obtaining services.

25 www. thecommonwealth.org Exporting Challenges (Contd). Cultural (business or social) Language; Unnecessary bureaucracy; Attitude – you must be prepared to take risks. Rapidly changing global trade environment. Bi-lateral and multilateral trade negotiations. Myopic approach to the business. Competitiveness Financial resources (risks).“

26 www. thecommonwealth.org Exporting Challenges (contd.) Scale – too small to for pre-qualifications Cost of Communication and Travel. Your reputation is not known. Inadequate knowledge Inadequate support facilities. Lack of data and information on local supply situation (trade statistics).

27 www. thecommonwealth.org Challenges: Contd… Economic philosophies have changed, but bureaucracy hasn’t Governments take control-oriented approaches Private sector is considered “guilty until proven innocent” Bureaucracies designed to prevent abuse - not to be efficient Opportunities for corruption “Murphy’s Law”

28 www. thecommonwealth.org How to address them. -Creative approach to marketing. -Your own knowledge of the market, etc. -Ensuring that the “supply-side” is prepared: – knowledge of preparing and submitting proposals. -Using local and international support services.

29 www. thecommonwealth.org Addressing the Challenges. -Knowledgeable trade officials. -Adequate representation in the markets; -Collaboration between government officials and professional service providers. Providing support Services - Government. E.g. Austrade – http://www.austrade.gov.au/.

30 www. thecommonwealth.org Addressing Challenges (Ctd.) Formation of partnerships (Joint Venture). Provide reliable and updated information. Taking a global approach to business. Establish a strong local base. Developing the “softer skills” of doing business. Meeting International standards. An enabling environment (removing unnecessary impediments).

31 www. thecommonwealth.org Projects on Export Promotion by Trade Section Cyprus Sri Lanka Malta Malaysia.

32 www. thecommonwealth.org The Global Trend. Growth in Global trade in Services is estimated at over 7% in 2003 dominated by professional services. Valued at over US$2.5 trillion. Services account for at least 20% of global trade Why can’t The Commonwealth Caribbean benefit from this? The challenges are not insurmountable Take the Global Approach.

33 www. thecommonwealth.org In this day and age of global internet connectivity and inexpensive telecommunication costs, any country with the right mix of talent, infrastructure and conducive business environment can compete in the global marketplace for knowledge workers and IT- enabled services. OPPORTUNITY In this day and age of global internet connectivity and inexpensive telecommunication costs, any country with the right mix of talent, infrastructure and conducive business environment can compete in the global marketplace for knowledge workers and IT- enabled services.

34 www. thecommonwealth.org What is your Vision? Your Horizon? Is it Local – your town? Is it Your country? Is it within the OECS? Is CARICOM? Is it The Americas? Is it Global?

35 www. thecommonwealth.org A Tale of Many Cities - Dubai Internet City - Dubai Media City - Dubai Industrial City - Dubai Sports City - Dubai Motor City - Dubai Maritime City - Dubai Humanitarian City - Dubai Healthcare City - Festival City - The Lost City - International City - Academic City - Knowledge Village - Global Village - Dubailand

36 www. thecommonwealth.org Palm Islands - Three man-made islands in the shape of palm trees. 500apartments, 2 000 villas, 25 hotels and 200 shops. 125 km of additional coast line created.

37 www. thecommonwealth.org Dubai Sports City - 7.5 km² complex of outdoor & indoor stadiums

38 www. thecommonwealth.org Hydropolis - Unique submarine hotel of 220 under sea apartments with their panoramic view of marine life.

39 www. thecommonwealth.org Dubai Waterfront - Extending to 81 sq km, world’s largest sea front. Larger than Manhattan in New York.

40 www. thecommonwealth.org Sources of Information and Support 1.The Commonwealth Secretariat – Trade Section: www.thecommonwealth.org;www.thecommonwealth.org 2.UNCTAD; 3.ITC; 4.The World Bank; 5.European Union. 6.Global Services Network: www.globalservicesnetwork.com 7.Government Ministries/agencies, colleagues. 8.The Internet


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