Trade in services: Examples for SADC

Abstract

Over the last few decades, the services sector has become an important component of world trade and the main income earner for many countries. Accelerated by the process of liberalisation, the effects of trade in services now traverse all countries. The main participants and beneficiaries, however, remain developed countries, while developing countries continue to play a marginal role. This comes as a result of a variety of factors ranging from developing countries’ inexperience in producing services for export purposes, to trade rules that are more favourable to developed countries, to the complexity and cost of the measures necessary for developing countries to make a successful transition to the new arrangements under liberalisation. Notwithstanding the adverse conditions, opportunities exist in the legal framework developed under the WTO for developing countries to participate more meaningfully in trade in service. These include, inter alia, the possibility of collaborating with foreign firms and benefiting from their experience, as well as establishing regional joint ventures that can compete more effectively at the international level. In the end, the success of developing countries in penetrating the international services market will be determined by the extent to which their domestic service providers manage to adapt to the new trade environment, how all these countries exercise their options in choosing which services to liberalize and their timing in doing so, as well as their ability to resist pressure from developed countries to act against their better judgement.