Developing Countries Need Policy Frameworks To Grow Services Trade: UN
This expansion is driven by digitally deliverable services, including IT, finance and professional services, enabled by rapid digitalization.
Chennai: Despite the growth in services trade seen in developing countries, their policy frameworks are not keeping up with the growth, finds the UN's trade and development body. UNCTAD is planning to set up a knowledge-sharing hub to promote the use of services data in policymaking.
Global trade in services has grown by around 5.3 per cent annually over the past decade – faster than goods trade – and now accounts for more than a quarter of total trade. This expansion is driven by digitally deliverable services, including IT, finance and professional services, enabled by rapid digitalization.
Developed economies dominate exports of digitally deliverable services, while many developing and least developed countries remain on the margins. As services become central to value creation, this gap risks widening without targeted policy action.
“Bridging it requires more than expanding trade. It depends on whether countries can design trade and regulatory frameworks that support domestic capacity to produce, export and benefit from services,” said UNCTAD.
The growing integration of services across all stages of production - from logistics and finance to digital design and marketing creates new pathways for structural transformation for developing countries. But outcomes hinge on infrastructure, skills and regulatory environments that support services-intensive production.
Trade policy which includes provisions on digital trade – such as cross-border data flows, data protection, electronic transactions and digital infrastructure –are critical to how services are supplied and traded.
These provisions can reduce regulatory fragmentation and improve predictability, enabling firms to access services inputs across borders.
Policymaking remains constrained by limited data, particularly in developing countries.
UNCTAD is advancing plans for a knowledge-sharing hub to connect policymakers, statisticians and experts and promote the use of services data in policymaking.
The objective is to strengthen the link between evidence and action – helping countries translate services trade growth into gains in diversification, resilience and long-term development.
