At the 2024 China International Fair for Trade in Services (CIFTIS) held in Beijing, Johanna Hill, Deputy Director-General of the World Trade Organization (WTO), highlighted the transformative power of services trade in driving global economic growth, job creation, and sustainable development.
“Services trade is not just about economic growth; it’s about creating opportunities and fostering inclusive development,” Hill stated, emphasizing that services have been the most dynamic component of world trade since the WTO’s establishment nearly 30 years ago.
Hill noted that the growth in commercial services has outpaced that of goods, with an average annual growth rate of 6.8% compared to 5.5% for merchandise trade. “Last year alone, the value of commercial services exports grew by 9%, while merchandise exports decreased by 5%,” she said, underscoring the sector’s resilience and potential.
China’s significant role in this sector was acknowledged, as it stands among the top five services exporters globally. “China has harnessed the potential of services trade, and its transition to smart manufacturing has been accompanied by rapid growth in information technology services,” Hill remarked.
Highlighting the critical link between services and employment, Hill pointed out that the services sector generates around half of global employment and is the source of new jobs, especially for women and youth. “As manufacturing becomes more automated and advanced, it increasingly relies on services such as technical testing, industrial design, and supply chain management,” she explained.
Hill stressed the importance of services trade in promoting socio-economic inclusion. “Services employ the majority of women and youth, and expanding trade in services translates into more opportunities for these groups,” she said. In 2021, 59% of employed women globally worked in the services sector, and youth employment in services continues to rise.
Discussing key trends in services trade, Hill highlighted the exponential growth of digitally delivered services. Between 2005 and 2023, exports of digitally delivered services quadrupled, with Asian economies leading the surge. “Asia’s value of digitally delivered services exports grew faster than any other region, with China experiencing an almost three-fold increase,” she noted.
Hill addressed the rise of artificial intelligence (AI) as a significant trend impacting services trade. “AI has the potential to significantly impact services trade by boosting productivity and increasing demand,” she stated. Hill emphasized the WTO’s role in supporting development in AI through facilitating trade and investment in core services that enable artificial intelligence, such as computer and telecommunication services.
On the topic of sustainability, Hill underscored the role of services trade in supporting the transition to a low-carbon economy. “A shift to renewable energy requires a wide range of services, from consulting to construction and installation of facilities,” she explained. Services trade liberalization enhances access to environmental goods, technologies, and know-how, contributing to efforts against climate change.
Hill also highlighted the close link between services trade policies and foreign direct investment (FDI). “Efforts to reduce barriers and facilitate trade in services translate into facilitation of FDI,” she said, mentioning the support by over three-fourths of the WTO membership for the Investment Facilitation for Development Agreement.
Emphasizing the need for enhanced international cooperation, Hill stated, “Harnessing opportunities and avoiding pitfalls created by recent trends in services trade calls for enhanced international cooperation.” She acknowledged progress made at the WTO, including the entry into force of new disciplines on services domestic regulation for 49 WTO economies.
Hill commended China’s efforts in further opening its services markets in recent years, particularly in sectors like banking, securities, telecommunications, education, and transport. “China’s participation in initiatives aimed at fostering services trade, such as the Joint Statement Initiatives on Services Domestic Regulation and E-commerce, is commendable,” she remarked.
“To tackle the challenges of the future, from digital trade to climate-related services, we need more commitments,” Hill concluded. “We need commitments that clearly and unambiguously cover areas where future trade cooperation is needed, to build a more uniform approach to services trade and realize the promise of shared prosperity.”
Reference(s):
WTO calls for services trade growth and cooperation on standards
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