Services
Introduction
Services have become the most dynamic and dominant force shaping global economic patterns in the 21st century.
Good regulatory practices to facilitate trade in services
Services are currently the largest and most dynamic sector of many economies, underpinning growth, productivity and employment. Yet, the costs of trading services remain significantly higher than those for goods, largely due to regulatory and governance differences across economies. Furthermore, opaque and inefficient authorization procedures for service providers can limit participation in services trade, particularly for developing economies. To address these challenges, over 70 WTO members adopted new Disciplines on Services Domestic Regulation, which entered into force in 2024. These disciplines aim to embed good regulatory practices (GRPs) into services policies and facilitate services trade by fostering transparency, predictability and efficiency in regulatory frameworks. This publication examines how GRPs can reduce trade costs, enhance economic performance and support financial inclusion. It outlines 14 core GRPs for improving transparency and efficiency in authorization and licensing processes, with the aim of promoting international regulatory cooperation. Four case studies, focusing on Costa Rica, Indonesia, the Philippines and Thailand, illustrate how reforms anchored in clear legal frameworks can reduce compliance costs, enforce quality standards and reduce processing times. The publication also introduces the Diagnostic and Reform Planning Tool, a new instrument developed to assist policymakers and regulators in mapping their domestic regulatory frameworks against the 14 GRPs set out in this publication.
Acknowledgements
This publication is the result of a joint effort by the WTO and the World Bank Group.
Executive summary
Services are central to growth, productivity, employment and economic diversification, and constitute the largest and most dynamic sector of many economies.
Harnessing Services Trade for Sustainable Growth
The services sector has been the main source of economic growth in recent decades. Logistics, finance and information technologies are essential to the functioning of modern economies while business services, healthcare and entertainment are among the world’s fastest growing sectors. This publication – co-published by the WTO and the World Bank – underlines the contribution that trade and investment in services can make to economic growth and development. It highlights, in particular, the importance of re-energizing international cooperation on services trade and encourages reflection on how best to mobilize assistance for developing and least-developed economies in implementing services sector reforms so that they can reap the gains from expanded trade and investment in services.
Acknowledgements / Disclaimer
This publication is the result of a joint effort of the World Bank and the WTO. The publication was co-authored and coordinated by Martin Roy of the WTO and Pierre Sauvé of the World Bank under the supervision of Deputy Director-General Anabel Gonzalez and Xiaolin Chai, Director of the Trade in Services and Investment Division, at the WTO, and Mona Haddad, Global Director of Trade, Investment and Competitiveness, and Sebastien Dessus, Practice Manager, Trade and Regional Integration, at the World Bank. The publication was edited by Ross McRae and Anthony Martin of the WTO.
Executive summary
This co-publication by the World Bank and the WTO is motivated by a shared view that the structural changes associated with a more service-centric world economy and the central contribution that expanded trade and investment in services can make to economic growth and development warrant greater policy attention and revived international cooperation. An important aim of the publication, and a key reason for its joint nature, is to recall the benefits of advancing the negotiating agenda on trade in services, and the opportunity costs of not doing so. Accordingly, the publication aims to foster reflection on how best to mobilize additional support – and better assistance – for developing and least-developed economies in implementing services sector reforms and reaping the development gains from expanded trade and investment in services.
Conclusion
The composition of global trade in services has changed markedly in recent years, a period that has seen developing economies register significant export gains in the services sector despite the severe impact of the COVID-19 pandemic. Such gains cover a host of non-traditional, high-value adding, services that can be more readily supplied today through digital means.
Foreword
Services have emerged as the driving force that is shaping the economic landscape of countries at all levels of development. They account for the largest share of global economic activity by generating more than two-thirds of GDP, employ the most workers, and are the source of most new job creation, especially for female and young workers. At the same time, services trade has turned into a key element in growth strategies, becoming the most dynamic component of global trade in recent times, and creating higher value-added jobs.