Opening the services sector offers big gains, say APEC officials
The projected gains of opening services sectors are almost twice as big as the gains from the liberalization of merchandise trade. The potential benefits for the Asia-Pacific region were examined by APEC Senior Officials, business representatives and academics during an APEC a services dialogue this week in Surabaya.
Liberalizing services could stimulate growth, create jobs, make small and medium enterprises more competitive and lower prices for consumers, speakers explained. By lowering business costs, it was noted that freer services sectors could also enhance companies’ ability to export and compete in international markets. Discussion of these issues helped to set the tone for the opening of the APEC Senior Officials’ meeting here on Thursday and Friday.
“More open services sectors are critical to enhancing economic growth,” said Ambassador Yuri Thamrin, Chair of the APEC Senior Officials’ Meeting which is tasked with pushing forward member economies’ agenda for ensuring a resilient Asia-Pacific.
“A better understanding of the challenges and opportunities in further expanding trade in services through public-private dialogue can help to identify practical ways forward.”
Trade in commercial services increases around seven percent annually among APEC economies, noted Ambassador Thamrin. But unlike manufacturing in the region, restrictions remain in some sectors such as energy, transportation and telecommunications.
Structural reforms in these sectors alone could generate about US$175 billion in savings a year, according to research by the APEC Policy Support Unit.
“Services are critical to achieving the Bogor Goals to achieve accelerated, balanced and equitable economic growth not only in the Asia-Pacific region, but throughout the world,” said Dr Djisman Simandjuntak, of the Pacific Economic Cooperation Council which is an official APEC observer.
“There is now substantial evidence that regulatory clarity and a competitive environment will lead to big benefits for consumers. For example, the reduction of freight rates by 20 percent and the reduction of electricity prices by 23 percent,” he noted.
APEC economies’ engagement with the private sector is playing a role in their work to promote structural reform.
“Regulatory reform and the opening up of services brings huge benefits to economies and more importantly, to consumers,” said Anthony Nightingale of the APEC Business Advisory Council.
“We are very pleased that APEC is devoting increased attention to this vital sector of economic activity,” he added. “By putting our heads together with leaders in government, we can come up with ideas and initiatives that can help to address such issues constructively.”
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