Global trade - now services
When new jobs are created in the United States, do they tend to be in (a) manufacturing? (b) agriculture? (c) service trades? If you picked ''c'' you are right. You also can quickly understand why the United States is so eagerly promoting a new round of multinational negotiations to bring world trade in services under the same type of liberalized trading rules now pertaining to most manufactured goods.Skip to next paragraph
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During the last decade, 90 percent of all the new jobs created in the US were service related. Indeed, for the US economy as a whole, 7 out of 10 Americans now work in service jobs of one kind or other. The US is also the major global exporter of services - in such fields as insurance, banking, communications, engineering, shipping, and tourism. In 1982 service-related exports came to some nations are major exporters of services.
This week the US is carrying its case for a special international agreement on services to Geneva, where it is presenting a new study on the extent of service trade in the world economy. The US action is the result of a decision made under the auspices of the General Agreement on Tariffs and Trade at a GATT ministerial conference in November 1982. At that time GATT member nations were invited to submit such national studies as a first step in deciding whether to go ahead with a formal round of negotiations on service trade.
What is perhaps most interesting about the new US study is that it finds that services amount to a much larger proportion of economic activity in developing countries than had been anticipated - perhaps as much as half of all economic output. Yet, many third-world nations have been at the forefront of opposition to bringing service trade under GATT rules, in large part because of fears that domestic service firms would be adversely affected by market penetration from abroad.
Obviously, smaller service-related firms in developing nations may need some degree of protection from their larger global counterparts. Yet, it is also true that service exports represent the next major stage in world trade, not unlike the change in the last century from trade mainly in farm products to trade in merchandise as well as commodities.
Bringing service trade under GATT rules makes good sense. GATT should schedule a new round of talks on service trade as expeditiously as possible.