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The Largest and Fastest Growing Sector In The World Economy
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Services are Key to the Future |
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The American Business Coalition for Doha (ABCDoha) firmly believes the Doha Round cannot be considered a success unless it delivers meaningful and comprehensive liberalization in services. At the Hong Kong Ministerial, leaders must set the services negotiations on a faster, more effective track if they are to produce the results countries seek and on which the private sector may build.
Services comprise approximately two-thirds of global economic activity. In the United States, the services sector generates 75% of the GDP and employs 80% of the U.S. workforce.
Services also represent a growing source of new export opportunities for U.S. companies who are forerunners in their industries from financial services to telecommunications, information technology, energy, advertising, retailing, and express delivery services. In 1980, U.S. services exports were valued at $38 billion. By 2004, U.S. exports of services had swelled to $340 billion.
Similarly, world services trade has grown over the same period from $363 billion to $1.8 trillion. Yet services trade only accounts for 20% of total world trade, a reflection of not only the barriers that remain, but more importantly, the significant gains to be achieved from meaningful liberalization in the Doha Round.
Economic studies have concluded that reducing services barriers by one-third could improve global economic welfare by $472.2 billion. The United States would stand to gain $138.8 billion in increased economic welfare, creating new jobs for U.S. workers.
U.S. participation in foreign markets has been stunted, however, by a variety of obstacles including discriminatory licensing procedures and taxes, limitations on ownership and foreign direct investment, and restrictions on repatriation of capital and profits. These barriers fly in the face of development objectives. The World Bank estimates that nearly $900 billion in annual income gains would accrue to developing countries from elimination of their barriers to trade in services.
Services form the backbone of infrastructure critical to development and engagement in today's modern global economy. For example, innovative financial services allow people to transform savings into investments that grow the economy. Advanced telecommunications services connect people and businesses and facilitate commercial transactions. Without efficient transportation services, people cannot move their goods across borders. Strong education and health services build human capital-people who participate in the mainstream economic life, who start businesses, and who innovate products and services that benefit all societies.
Additional Resources
- An introduction to the General Agreement on Trade in Services (GATS)
- Free
Trade in Services: Opening Dynamic New Markets, Supporting Good Jobs
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PDF)
Office of United States Trade Representative - Download a
Services Fact Sheet ( PDF)
- WTO Paper: GATS
Fact and Fiction ( PDF)
