Asia-Pacific Economic Cooperation (APEC) member economies need to do more to ensure an open and predictable environment for services market access, according to a new report released Thursday (October 07.10.2021, XNUMX) by the APEC Policy Support Unit.
The review notes that the Pacific Rim region has underperformed over the past four years and is falling behind on its targets.
Under the APEC Roadmap for Services Competitiveness, endorsed by leaders in 2016, member economies of the trans-Pacific mechanism agreed to reduce restrictions on trade and investment in services, as well as increase the share of services exports and overall trade in services by 2025. However, progress has been uneven y The pandemic is likely to exacerbate this impact..
According to the APEC Policy Support Unit report, while some sectors of the services have become more open In the last four years (logistics cargo handling, customs clearance, maritime transport and cargo forwarding), others have more restrictive tornado (road and freight transport, accounting and air transport).
«Data show mixed progress in efforts to make the region more open in supporting trade and service investment"s," explained Denis Hew, Director of APEC's Policy Support Unit.
“There are many factors that contribute to these limitations, including restrictions on the entry of foreigners, barriers to competition, regulatory transparency and regulations affecting the movement of people,” he added.
The report highlights that APEC's share of total global services exports has decreased by 38,8 percent in 2016 to 38,1 percent in 2019, meaning that APEC has slowed down and needs to rapidly increase services exports if it wants to increase its global share of services exports by 2025.
On services trade, data show that APEC recorded an increase from US$3,93 trillion in 2016 to US$4,58 trillion in 2019, reflecting a compound annual growth rate of 5,3 percent, which is lower than its target of 6,8 percent or more.
Services are fundamental to most economies, providing much of the economic activity and employment. In most APEC member economies, services account for more than 50 percent of Gross Domestic Product (GDP).
Together, services comprise about two-thirds of APEC GDP, and more than half of total employment in 15 APEC economies, which over the past 10 years has been driven by this sector.
“COVID-19 has particular implications for the services sector given the importance of personal contact for some types of services trade and the difficulty of maintaining those physical contacts in light of social distancing measures and travel restrictions,” said Andre Wirjo, an analyst with APEC’s Policy Support Unit and author of the report. “Containment measures implemented by economies in response to the COVID-19 pandemic led to a significant decline in the value of trade, including in commercial services.”
Companies that are able to conduct cross-border trade in services during the pandemic are more successful and resilient. This shows the importance of digital trade and data flows in boosting competitiveness.
«The capacity for digital change has been one of the key factors for success in responding to the crisis. We need to realize the fundamental role of the digital economy within global value chains and seek to promote policies that foster access, overcome the digital divide and avoid barriers to the digital economy. ", the analyst stressed.
Structural reform efforts, such as those aimed at reducing administrative burdens and improving the competitiveness of small businesses, also play a key role in opening up the services sector to cross-border competition and creating a seamless Asia-Pacific market.
“This action would also help support economic recovery, improve business resilience and boost productivity,” Wirjo concluded.
There are 21 Pacific Rim member economies in APEC: Australia, Brunei Darussalam, Canada, Chile, China, Hong Kong, Indonesia, Japan, Korea, Malaysia, Mexico, New Zealand, Papua New Guinea, Peru, Philippines, Russia, Singapore, Taiwan, Thailand, United States and Vietnam. (APEC Services Competitiveness: Mid-term Review of the Roadmap Report)
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