Brainstorming Meeting of the WTO LDC Group Operationalising the LDC Services Waiver Session II: LDC Services Exports & Export Potentials David Primack Executive Director 3-4 October 2013 WMO, Geneva, Switzerland
2 Overview Understanding LDC services exports and export potentials Insights from the data Insights from the questionnaire (preliminary) Next steps
3 Understanding LDC services exports and export potentials Nature of services expansive coverage low awareness lack of selfidentification informal sector flying under the radar Data Not much available for LDCs What is available comes from Balance of Payment (BOP) Inadequate sectoral and partner disaggregation Doesn t cover mode 3 (commercial presence/fdi) Questionable reliability Requires a combined qualitative and quantitative approach reliance on case studies Data, especially if disaggregated national data exists, is important complement (including e.g. firm-level surveys)
4 Insights from the data As we saw: Services are important Services composition in GDP often above world average (less so without tourism) LDCs are already exporting services Wide variation between countries and sectors High levels of concentration (travel ~ 45% of commercial services exports 2012) Insights for potential exports are difficult to gleam from aggregate figures High potential for disaggregated national figures (if available) can sharpen the guidance from data (e.g. other business services )
5 Preliminary insights from the LDC questionnaires context What does questionnaire try to achieve? Compile some basic information Flag areas especially those under the radar for further investigation Identify anecdotal evidence on areas of current/potential export, destinations, modes, constraints/barriers, etc. What does it include Part 1 More general, mostly multiple choice Part 2 Granular approach by sub-sector, more specific queries, e.g. prioritization of exports (current/potential) and export markets, listing constraints, highlighting potential preferences
6 Preliminary insights from the LDC questionnaires status 20 LDCs have completed Part 1 Afghanistan, Bangladesh, Benin, Burkina Faso, Burundi, Central African Republic, Democratic Republic of Congo, Ethiopia, Guinea, Haiti, Nepal, Lesotho, Laos, Samoa, Senegal, Sudan, Togo, Tuvalu, Tanzania, and Zambia 13 of these LDC have also completed P2 (underlined) Congrats! Overview here draws information from Parts 1 & 2 Caveat: small sample size and differentiated approaches impacts ability to draw conclusions preliminary insights. Building on this information at Brainstorming meeting and back home in consult with industry is key to strengthen insights
7 Current export sectors reported Average: 8 sectors per LDC (57%) 11 LDCs per sector (55%) Sector Professional services (e.g. legal, accounting, architecture, engineering, etc.) Key Modes 18 4 & 1 # of LDCs Communication svcs (e.g. postal, courier & telecom) 18 1 Transport services 18 all Tourism and travel-related services 14 2 Health-related and social services 14 4 Computer-related services (e.g. consulting, software development, data processing, etc.) 12 1 & 4 Construction and related engineering services 12 4 & 3 Educational services 12 4 & 2 Financial services (e.g. insurance &banking) 12 all Recreational, cultural and sporting services 12 2 & 4 Distribution services 7 2/3/4 Other business services 6 1/4/2 Other services not included elsewhere 5 1 Environmental services 3 1/4
8 Modes of supply being exported Top 5 sectors by mode (in order of perceived importance) Mode 1 Mode 2 Mode 3 Mode 4 Comm Tourism/travel Transport Professional Professional Transport Financial Health-related & social Computer/ICT Educational Professional Computer/ICT Financial Transport Rec, cultural & sporting Professional Tourism/travel Construction & rel engineering Educational Transport
9 Export destinations by sector Very broad reach of LDC services exports 93 unique countries or regions identified across the 14 sectors listed Divergent responses Significant variation in concentration Smallest coverage 3 countries + their REC Largest coverage 31 countries + their REC
10 Number of export markets by sector Sector # of export markets Transport services 36 Educational services 33 Professional services (e.g. legal services, accounting, 32 architecture, engineering services, etc.) Health-related and social services 25 Financial services (e.g. insurance and banking) 22 Tourism and travel-related services 22 Communication services (e.g. postal, courier and 21 telecommunication services) Construction and related engineering services 20 Computer-related services (e.g. consulting services, software 19 development, data processing, etc.) Distribution services 17 Recreational, cultural and sporting services 17 Other business services 13 Other services not included elsewhere 12 Environmental services 0
11 Common export destinations by sector Professional Transport Tourism Comms Computer/ICT EU + FR, UK Worldwide EU + UK Worldwide EU USA Senegal USA USA USA Russia SADC China Senegal Africa + Cote d I South Africa Rwanda Côte d'ivoire France Japan Canada EU + France Canada South Canada Africa Botswana Côte d'ivoire Japan Malaysia India Africa India EU + France ASEAN Africa
12 Perceptions of export potential % of Sector responses Professional services (e.g. legal services, accounting, architecture, 50% engineering services, etc.) Tourism and travel-related services 45% Transport services 45% Communication services (e.g. postal, courier and 35% telecommunication services) Computer-related services (e.g. consulting services, software 30% development, data processing, etc.) Construction and related engineering services 25% Educational services 20% Financial services (e.g. insurance and banking) 20% Recreational, cultural and sporting services 10% Other business services 5% Distribution services 5% Health-related and social services 5% Other services not included elsewhere 5% Environmental services 0%
13 Main constraints Constraints of various kinds 1. business challenges, such as difficult access to finance, small size of business operations, lack of market information and the like 2. governmental barriers or challenges, such as quotas on foreign professionals, difficulties with obtaining a license, non-recognition of diplomas Focus for purposes of brainstorming meeting is #2 Looking for any difficulty or challenge which LDC services exports or service exporters may face in an export market and which has to do with actions (or omissions) of the government of that country
14 General typology Market Access Issues e.g. limits on number of service suppliers or value of transactions; restrictions on types of legal entity or participation of foreign equity, etc. Regulatory or Administrative Barriers/Challenges e.g. licensing requirements or procedures, qualification requirements or procedures, technical standards, etc. Taxes e.g. other measures that might serve as barriers; e.g. subsidies for national providers Other Issues e.g. governmental measures in export markets that might in other ways operate as a barrier to LDC service providers, such as subsidies to domestic competitors? Discrimination - National Treatment, MFN e.g. regulations, taxes, administrative practices or other governmental measures which discriminate against foreign service providers and which affect LDC service providers; or instances where foreign services/providers from some countries are treated better - in terms of regulation, taxes, subsidies, or any other measures - than services/providers from other countries, including LDCs
15 Main constraints reported In aggregate: Measure % Regulatory or Administrative Barriers 29% Market Access 26% Discrimination - National Treatment MFN 18% Other Issues 26% Taxes and other charges 11%
16 Constraints/sample preferences Top 3 sectors reported for export potential: Professional services Regulatory or Administrative Barrier 53% Sample preference: greater recognition of LDC work experience re: qualifications Tourism services Regulatory or Administrative Barrier 40% Sample preference: remove foreign equity limits for LDC preferred permits for LDC tour guides Transport services Regulatory or Administrative Barrier 41% Sample preference: preferential licensing fees for LDC operators, expanded quotas, simplified visa requirements
17 Next steps: building on what we have Preliminary results are a very good start lots of flags This brainstorming meeting will augment existing information Breakout groups will be key After the brainstorm can enhance sample size and broaden inputs from private sector
18 Next steps: building on what we have Country-level research will provide more evidence (e.g. micro-level firm surveys) Need to dig deeper on the flags Complementary research on potential preferencegranting markets (next session) Again, digging deeper on flags Result: catalogue generalised potential preferences basis for LDC requests could apply to any country
19 Thank You d.primack@ileap-jeicp.org www.ileap-jeicp.org