In a Policy Brief published in July, the think tank ECIPE looks at trade in services as a strategic economic sector for the EU. The authors of the report make a number of recommendations on how to capitalise more effectively on this comparative advantage.
They show that productivity in information services, business services and distribution has outstripped that of goods production for several years now. This is particularly the case in the EU, where the share of trade in services in GDP is growing steadily, while that of trade in goods is stagnating.
The information and communication technology (ICT) sector has performed particularly well over the last ten years: between 2010 and 2020, exports of ICT services grew by 8.5% a year, compared with 2% for chemicals and 1.4% for machinery.
Although ICT exports are concentrated in four Member States (Germany, Ireland, France and the Netherlands), the others also have a positive trade balance in this sector, point out the authors of the document.
They put forward a number of policy recommendations to capitalise on this competitive advantage. According to the ECIPE, member countries could, first of all, each take maximum account of the interconnection between trade in goods and services in their trade and industrial policies.
Another avenue explored was regulatory cooperation with major trading partners to prevent potential barriers to trade. “If regulators around the world think in isolation, this new regulations will create a new set of trade challenges for new non-tariff barriers affecting services trade”, warn the authors.
Memoranda of understanding or mutual recognition agreements can be used for this purpose, according toECIPE.
Finally, multilateral cooperation should be favoured to ensure a minimum of harmonisation. The authors of the document explain that there are several possible avenues of work within the World Trade Organization (WTO). However, it is difficult to initiate reforms at the WTO, as these are adopted by consensus between all members.
On Friday 26 July, around half of them submitted a text for an agreement on e-commerce, which now needs the support of all members in order to be implemented (see EUROPE 13462/8).
To see the ECIPE Policy Brief: https://aeur.eu/f/d5r (Original version in French by Léa Marchal)