Jul 8, 1987

SERVICES DATA IMPROVEMENT NEEDS INTERNATIONAL COOPERATION.

GENEVA, JULY 4 (IFDA/CHAKRAVARTHI RAGHAVAN) – Despite ongoing efforts internationally comparable data on trade in services of use to negotiators is now lacking, and the data base could be improved only through enhanced international cooperation and providing sufficient resources for international organisations.

This view was reportedly put forward by statistical experts from UN agencies at a meeting of the Uruguay round Group of Negotiations on Services (GNS) here this week.

Setting up an international comparable data base would need understandings on definitions of services, and cognate matters, and would depend on the collection of data through national accounting systems.

In this regard third world countries would need technical assistance and help, some of the experts underlined.

Third world delegations reportedly stressed the need for associating their exports fully in the definitional and statistical aspects of current work to improve the data base. They also underscored the need for technical assistance to third world countries to improve their national accounting systems.

Some of them also suggested the setting up of a forum or working group of experts from governments and international organisations to improve collection of internationally comparable data on services.

The major part of the meeting was reportedly devoted to a discussion of the statistical issues with representatives of relevant international organisations – the UN statistical office, UNCTAD, IMF, and the UNCTC.

There was also reportedly a brief discussion on issues relating to "transparency", the broad concepts on which principles and rules in services could be based, and measures and practices that contribute or limit trade.

A Canadian paper on "transparency", and another giving an inventory of "perceived barriers" in the whole spectrum of service activities – ranging from retail trade and drugstores at one end to datamatics at the other – were also reportedly discussed.

Many third world delegations reportedly made clear that the Canadian papers and ideas went well beyond the mandate of the Uruguay round, and could not be addressed in the negotiations.

Under the "transparency" issue, the Canadian paper reportedly has canvassed the idea of regulations and administrative orders and actions of national authorities being made subject to a kind of the U.S. "due process" concept – whereby courts sit in judgement over the reasonableness or otherwise of a legislative or administrative act.

Third world delegates reportedly said that the GNS would only be wasting its time and complicating its task in focussing on "perceived barriers" and putting on the table a whole shopping list of barriers to be negotiated out.

Instead it should use examples to enable it to formulate broad concepts on definition, coverage, and measures and practices.

And unless in this process services of interest to third world countries too were addressed, and not merely those where the industrialised countries have some "comparative advantage", there would be little scope for negotiating and international agreement commanding wide support.

On the statistical problems, the four organisations had sent in paper describing the nature of their work in the area of services, the kind of data they have, and their efforts to improve the data base.

The discussions clearly brought out that existing data on services, mostly drawn up from the IMF’s balance of payments statistics, do not allow for any details analysis of trade in services. They lack sufficient disaggregation and any common definitions of the particular service subsectors for comparability, and lack any particulars about the directions of trade flows.

Even the most ardent protagonists of negotiations on services, like the U.S., concede that the existing data base is poor, but have been suggesting that improvement of statistics is a long-term issue not capable of being solved within the framework of the Uruguay round negotiations or the GATT secretariat which is servicing the meetings, and negotiations should not be held up on this score.

Curiously some of the same countries have taken a contrary stand in areas of tariffs and non-tariff barriers, and are asking for creation of an integrated data base for negotiations.

A number of third world countries have underscored their view that without adequate data about what service sectors or intended to be covered, how the trade will be defined, and the directions of "trade flows" in these services – to show the exchanges between countries and overall – it would be difficult to venture into constructing a framework for liberalisation.

The representative of the UN Statistical Offices (UNSO) reportedly advised the group of the work programme in place since 1985 to improve statistical data on services. This involved classification of services, measuring the quantity and price changes of services, and improvement of measurements for trade in services.

The UNCTAD representative outlining the work in UNCTAD, based mainly on IMF BOP statistics, to construct a data base for its own in-depth studies on role of services in development process, and to assist third world countries in conducting their own national studies on services.

UNCTAD had found the existing data inadequate, primarily due to lock of sufficiently disaggregated data, and any information on direction of trade.

Different countries use differing definitions even in respect of the same service sector, and this gave rise to difficulties of comparison – whether for trade purposes or even for a country to compare its performance in relation to another.

Any decision to promote a system of internationally comparable data on trade in services should hence give priority to standard classification, and definitions and concepts to be adhered to internationally including such things as coverage, classification of services, valuation, constant prices, and partner countries.

A satisfactory data base, helpful to negotiators, could only be constructed by drawing upon the expertise and experience of countries that had made most progress in overcoming the inadequacies of the current systems.

It would hence be desirable to establish a forum for interchange of such information with a view to constructing the elements of a common data base on trade in services of practical applicability.

The forum should consist of experts from countries and international organisations that are producers and users of international statistics, and could attempt to develop an idea of trade flows at a more disaggregated level by extrapolating from the most advanced and specific data.

Also, in the UNCTAD view, work on data on trade and production in services should be carried out simultaneously and in close coordination, to avoid the need at a future date to establish a concordance between separately evolved systems, as is now the case with trade and production in goods.

This would be particularly important to assess the role of services in development, calculate the share of imported services in the domestic economy, the extent to which it enters into the production process.

Employment data too should be incorporated into this exercise so that more countries could assess the effect of policy measures on trade, production, and on employment.

The UNSO explained its ongoing work in collaboration with other international organisations to improve the statistical data, and to a meeting of experts for this purpose held early this year in Netherlands, with the next to be held soon in Stockholm.

India reportedly complained in this connection that third world countries had not been invited to the meeting sponsored by the UNSO, and it was essential that third world countries should participate fully in any work concerning definitional and statistical aspects.

Third world sources later said that this issue had been raised in new York (where UNSO is headquartered) at a planning meeting, but got little attention, with some even seeing the presence of third world countries at this stage as undesirable.

Third world countries in the discussions generally underscored their concern on possible difficulties in starting negotiations on trade in services without sufficient statistical data – an imperative for purposes of negotiating and quantifying concessions.

The U.S. took the position that the entire statistical problem was a long-term affair, and improvements would have to come out of national data and countries concerned must hence address it themselves.

The European Community suggested that the services negotiations could be carried out in a different way from the negotiations in goods (where concessions are exchanged bilaterally and multilateralised).

In the EEC view, a long-term project was needed for improvement of data on trade in services. But there was also need for improving the statistics for negotiation purposes.

For this, relevant international organisations could take existing and available data and construct statistics useful for negotiations. The time limit for this short-term work should be the timespan of the Uruguay round itself.

Mexico suggested that a working group on statistics with the participation of both governments and international organisations should be set up.

Singapore noted that the GNS needed information on the sectoral flows in services both in internal and external sectors, how important these service sectors were, and how "trade" could be measured in some of the sectors like banking and telecommunications.

Without this it would be difficult for countries to negotiate. For devising any accounting method, work on a definitional issue for accounting would be crucial, and this would need technical assistance.

Mexico and Brazil said that questions about the statistics and data needed for negotiating purposes should be discussed in the GNS in the initial negotiating phase itself.

Japan suggested an advisory group on statistics in trade in services might be set up, and the GNS could decide which international organisations and experts would be involved in the group, its mandate and time frame.

In summing up the discussions, the chairman, Felipe Jaramillo of Colombia, reportedly noted the consensus in the GNS that statistics on trade and production of services were in need of improvement, particularly for analysing the international dimensions of services activities.

While a number of international organisations were pursuing this goal to the extent permitted by their resources. He noted in this connection the suggestion that this was a matter for international cooperation, and a focal point or forum should be established for this purpose.

He also noted the suggestion for a working group to examine what could be done over the short-term to facilitate the negotiating objectives, and for providing international organisations with resources to provide technical assistance to third world countries.

The issue, he noted, would remain on the agenda of the GNS.