The liberalization of cross-border trade in services: A developing country perspective

One of the notable trends in recent years has been the increasing importance of the cross-border supply of services. This is occurring in a large number of services sectors, both through the partial substitution of services earlier supplied by the commercial presence of foreign companies or by moving natural persons, and through trade in newer services such as telemedicine and research and development. The other dynamic trend is the growth in offshoring, with developing countries as important participants. These trends provide huge scope for developing countries to exploit their comparative advantages in labor-intensive services without displacing substantial labor in developed economies, at the same time adding to efficiency gains and cost reductions in the latter. The further opening of markets for cross-border services, by providing the necessary boost to the global growth engine, could become a win-win situation for all.