DG Okonjo-Iweala highlighted the impact COVID-19 was having on LDCs’ services trade.
Calls for Enhancing LDCs’ Integration in Global Services Trade.
DG Okonjo-Iweala highlighted the impact COVID-19 was having
on LDCs’ services trade. The pandemic has severely affected services that
require in-person contact between suppliers and consumers, most notably the
tourism and transport sectors, where LDCs have a relatively high footprint in
global trade. In 2020, LDC exports of travel/tourism and transport services
fell by 69% and 16%, respectively, with total services export revenue loss of
nearly US$17 billion.
“Decreased export revenues mean job losses and economic
distress for people, along with increased financial and debt pressures for
governments,” she said. “Against this background, restoring and increasing the
export performance of LDCs in services takes on even greater urgency.”
“Services can help LDCs increase and diversify exports from
more traditional agricultural products and commodities, reducing exposure to
price volatility,” she added.
In 2019, prior to the pandemic, LDCs accounted for 0.3% of
total global services exports across all four modes of supply. In comparison,
their share in global tourism exports was 1.3%, and 0.6% for transport services
— mostly air passenger transport.
With the goal of enhancing LDCs’ participation in global
services trade, WTO members in 2011 adopted the LDC Services Waiver to allow
members to offer preferential market access for services and service suppliers
from LDCs, analogous to existing trade preferences for LDC merchandise exports.
To date, 51 WTO members accounting for over four-fifths of global economic
output and trade have notified preferences for the benefit of LDC services and
services suppliers.
However, “we should not rest on our laurels,” DG
Okonjo-Iweala declared. “Our ultimate objective is to enhance LDCs’ integration
in global services trade. We need to ensure that we are doing enough, that our
actions continue to facilitate progress. And we need to ask ourselves if there
are other things that we can do that would help us reach our objective.”
Speaking at the webinar, Chad’s Minister of Trade and
Industry, Ali Djadda Kampard, also noted that LDCs have been disproportionately
affected by the COVID-19 crisis due to their heavy reliance on travel and
transport services. A decline in LDCs’ overall services exports ranging between
11% and 55% was reported in the first three quarters of 2020. For non-LDC
countries, the downturn ranged between 7% and 28%.
The minister called for a holistic approach to identify the
challenges and barriers that LDC service providers face, adding that the
context for the LDC Services Waiver had changed.
Emmanuel Mutahanga, Commissioner of External Trade in the
Ministry of Trade, Industry and Cooperatives in Uganda, also highlighted the
economic impact of COVID-19, which had made LDCs particularly vulnerable. “This
workshop comes at a critical time for us to focus attention in the waning days
of the pandemic that wreaked havoc on our peoples in the world,” he declared.
Organized by the Council for Trade in Services, the 2-3 June
webinar sought to review and promote the operationalization of the LDC Services
Waiver. It was organized to provide a platform for dialogue and experience
sharing among LDC stakeholders and members, and assist them in further
promoting preference implementation, notification, and the exchange of
information about members’ measures to increase LDC participation in global
services trade.
Sessions during the webinar examined new data on LDC
services exports, efforts to improve data collection and dissemination,
first-hand information from exporters and importers of LDC services, and
technical assistance and capacity-building efforts