Trade in services just got a boost with the entry into force of new World Trade Organization (WTO) rules facilitating and simplifying trade in services. The new rules apply to a large and diverse group of WTO Members, including developed, developing, and least developed countries – representing 92% of world trade in services.
The set of rules agreed upon in the Joint Initiative on Services Domestic Regulation will streamline authorization requirements and ease procedural hurdles faced by businesses around the globe, in particular micro, small, and medium-sized enterprises. This agreement will help reduce the costs of global services trade by more than €110 billion every year, by ensuring transparency, efficiency, and predictability of authorization and qualification requirements and procedures.
Less red tape, more trade
Services represent the largest and fastest-growing sector of the economy. In the EU, services account for about 75% of GDP and employment while trade in services accounts for 25% of the EU’s GDP, supporting more than 20 million jobs. Global services exports were valued at more than €6 trillion, representing 23% of total world trade. Moreover, the services trade offers a significant and multifaceted development impact, as services offer a direct route for developing economies to diversify their exports.
The clear rules on authorization agreed upon as part of this Joint Initiative will facilitate trade in services significantly. Especially for MSMEs and women entrepreneurs who typically do not have the same resources to cope with complex requirements, they need to comply to operate in foreign markets
The rules also help the digital agenda, since sectors such as telecommunications, computer services, engineering, and banking stand to benefit from it. It is also the first time a WTO text includes a binding provision on non-discrimination between men and women.