Trade in Services- development of Statistical Framework for

SAARC Region

Dr. S. K. Nath

DG, CSO, India

What is Trade in Services

International Trade can be split into two categories: trade in goods and trade in services

International trade in goods involves the movement of objects between countries and across borders. A good is tangible object.

International Trade in Services- which cannot be seen or touched. Like Banking Services, tourism services or telecommunication services.

How Trade in Services take place

There are variety of different ways - An insurance company in one country

might supply its services like selling insurance policies, in the market of another country by establishing a commercial presence or direct by electronic means across boarder.

- A family might take a holiday overseas.

What’s the size of TIS

Trade in Services accounts for over 20% of world tradeIn SAARC region the size could be even higher in terms of total trade among SAARC countries.In some of the SAARC countries like India and Pakistan, it accounts for more than

50 % share of their GDP.

General Agreement on Trade in Services (GATS)

GATS was agreed under URUGUAY round of multilateral trade negotiations and came into being in 1995It sets out a framework of legally binding rules governing the conduct of world trade in services.It is supported by a number of specific commitments undertaken by individual countries These commitments STOP WTO member countries from changing domestic law to introduce new barriers to entry into these specific markets or modes.

GATS- basic essence.

For the purpose of of trade negotiations in services countries have to remove unnecessary regulations

Thus, making the domestic and foreign companies to do business and will encourage economic growth in all countries- developed and developing.

Modes of Supply

Trade in services is a more difficult concept than trade in goods.The GATS has identified four modes of supply for services- which represents different forms of international trade

a) Cross-boarder ( e-commerce, telecoms)b) Consumptions abroad (tourism)c) Commercial presence ( setting up firm in another

country)d) Movement of natural persons ( nationals working

overseas for temporary period)

GATS principles

Most favoured nations (MFN):treating all traing partners equallyNational treatment (treat national and foreign service suppliers equally according to ‘modes’ and ‘sector’)Market access (controls the right to enter into market or do business in its preferred manner)

SAARC-Trade Agreements

SAARC Preferential Trading Agreement (SAPTA) in 1995

South Asia Free Trade Agreement (SAFTA) signed in 2004

SAFTA- A parallel initiative to multilateral trade liberalisation commitments of SAARC member states

SAFTA came into effect on 1st January 2008

SAARC initiatives

SAARC Committee on Economic Cooperation held in Dhaka focused on Capacity Building for Collection of Statistics on Trade in Services in the region for generating SAFTA Statistics to be used for policy formulation and implementation

SAFTA

Trade in services amongst SAARC is very important on account of various historical, social and cultural factors

SAFTA being a new development in SAARC Region, a great deal of efforts are necessitated to develop a system of collection of statistics on trade in services as apparently relevant details are not available in the Region on partner-wise basis.

Statistical Systems and classifications related to trade in services

There are 11 main BPM5 standard components a 1. Transportation2. Travel3. Communication Services4. Construction services5. Insurance services6. Financial Services7. Computer and information Services8. Royalties and license fees9. Other business services10. Personal, Cultural, and Recreational, services11. Government services, not included elsewhere (n.i.e)

Data on Trade in Service

Sector and country-specific data are not available

The present Statistical Framework does not support collection and compilation of data on Trade in Services except for limited sectors / sub-sectors

Expert Group

Trade in Services being a difficult concept, development of institutional mechanism for regular collection of compilation needs to be given high priority with the assistance of an expert group, understanding best practices and making the collection of Statistics Act more effective for this purpose.

Dhanyabad

Thanks