Services Trade May Represent Future of Economic Growth

GENEVA, SWITZERLAND – The World Trade Organization’s (WTO) World Trade Report brings into focus services, which have become the most dynamic component of international trade. The Report was released on Wednesday and discusses three major trends that are likely to impact services trade and trade costs in the future, while also estimating how trade may change over the next 20 years. First, digitalization is expected to further reduce the cost of services trade, making it possible to deliver services digitally that previously required face-to-face interaction (like telemedicine). Second, rising per capita incomes in the developing world are expected to boost demand for skill-intensive services. Finally, climate change and consumers’ growing awareness of environmental issues are likely to disrupt supply and trade in some services (tourism and transportation are examples). The WTO concludes that services trade can be a powerful engine of economic growth, development and poverty reduction, but for this to happen, international cooperation needs to be intensified.