Download services and good regulatory practices

Services Trade and Regulation
Supporting International Cooperation and
Domestic Reform
Bernard Hoekman
International Trade Department
World Bank
WTO, April 11, 2011
Indisputable facts…
• The cost and quality of services inputs is a major
determinant of how much countries can benefit
from globalization
• Firms need efficient and reliable services to
compete in the world economy
• Opening markets to trade and investment flows is
an important channel for giving domestic firms
access to better services, diversifying its export
basket of goods and services
• Effectively integrating services markets is complex
because it involves regulatory reform and
cooperation
Serious policy challenges…..
• Developing countries face significant difficulties
in designing reforms, in part because of concerns
about the realization of regulatory objectives
• Multiple players with different objectives within
governments/countries
• Provision of services involves a network or cluster
of activities: e.g. logistics services or tourism.
• Absence of information on extant regulations,
their purpose and impact
• Limited knowledge of alternative regulatory
options
World Bank support for regulatory reforms
• Information: data on applied policies across
many countries
• Analytical work: impacts of applied policies
within countries
– Incl. regulatory assessments
• Instruments:
– Research
– Policy dialogue
– Knowledge Platforms
– Projects
Services Trade Restrictiveness Indicators
• 102 countries: 78 developing countries surveyed, comparable
data for 24 OECD countries
• Five broad services sectors: Financial, Telecom, Retail,
Transportation, Professional Services.
• Within sectors, different modes of supply where applicable
• Multiple policy dimensions but focus on discriminatory
policy measures
 more than 3,000 country-subsector-mode combinations
 Index of restrictiveness of applied policies (STRI)
STRI by Regions and Sectors
Trade and Transport Facilitation Assessment
• Logistics costs are determined by the
regulatory environment for logistics operators,
not just quantity and quality of infrastructure
• Within countries, logistics in lagging/remote/
island regions may be key trade barrier due to
high costs of shipping small volumes
• Logistics councils or other public-private trade
facilitation bodies important to
identify/implement better logistics services
• Consultation/coordination processes needed
for rapid adoption of new requirements to
participate in global supply chains
Professional Services in East Africa:
Regulatory Cooperation for Regional Integration
• Collection of new information on market conditions, policies and
regulatory regimes in accountancy, engineering, and legal services
• Key findings:
– National markets for these services in East Africa remain
underdeveloped
– Regional market fragmented by restrictive policies and
regulatory heterogeneity
• Policy recommendations:
– Four priority areas – domestic regulatory practices, trade
barriers, international labor mobility, and education
– Require both national reform and international cooperation
– Regulatory reforms needed for effective regional competition
Source: Dihel, Fernandes, and Mattoo (2011)
Accountancy services in East Africa
Analytical basis for policy advice
• A comparison of domestic entry regulations for accountants by World
Bank researchers reveals important differences across countries
Entry Regulation - Accountants and Certified Accountants
Kenya
Rwanda
Tanzania
Uganda
No
Yes
Yes
No
Yes
Yes
Yes
Yes
Yes
Yes
No
Yes
Yes
No
Yes
Yes
Yes
Yes
No
Yes
Yes
Yes
Yes
Yes
Academic Qualifications
University degree required
Professional Qualifications
Requirement to pass professional exam
Requirement of relevant compulsory practice
Compulsory membership in professional association
Licensing requirements
Continuing education requirement
Source: Dihel, Fernandes and Mattoo (2011)
Working towards a MRA in accountancy between
Kenya, Rwanda, and Tanzania
• Ambitious step in regional liberalization and regulatory cooperation in context
of EAC Common Market Protocol: annex on mutual recognition agreements
• 2010: Accountancy professional bodies of Kenya (ICPAK), Rwanda (ICPAR), and
Tanzania (NBAA) signed an MRA for academic and professional qualifications
–
–
–
–
Establishes the East African Community Institutes of Accountants (EACIA)
Empowered to issue CPA designation to qualified candidates
Exempts CPAs from re-examination of professional competence
Mutual recognition of practical experience waiver if domestic experience in 3 out of
previous 5 years
– Reciprocal eligibility for membership of EAC bodies subject to CPA certificate, 3
years professional experience, and no misconduct
– Promote member education development and institutional strength
• Workshops in Nairobi in September 2010 brought together professional
associations, regulators, trade negotiators, and business representatives and
created a platform for dialogue to move the accountancy MRA forward
– Uganda (not an initial signatory) also participated in the workshop
Services Knowledge Platforms (SKP)
• Objectives
– Assess/analyze impacts of current policy regimes
– Exchange information and learn from a variety of national
experiences with regulation/reform
– Identify beneficial reforms and needed investments
– Link to aid for trade initiative for support for implementation
• Connect stakeholders to different sources of expertise –
local, regional, global
– Build on existing platforms—APEC, OECD, etc. –and existing
networks of regulators
– Facilitate South-South knowledge exchange
• Anchored in regional communities
• Demand-driven and action oriented
• Interest is a SKP has been expressed by PAFTA, CEFTA,
ECOWAS, Tripartite (East and Southern Africa)
An input into (future) cooperation
• Progress on services in WTO impeded in part by
regulatory concerns and uncertainty
•
•
•
Locking-in current policies in GATS or negotiating precommitments to liberalize in future require that
governments see this as beneficial
Concrete action to address regulatory agenda a
precondition for making commitments
Same is true for data lacunae – need to improve
statistics
• All these factors/requirements indirectly
supported by types of activities discussed
Further reading/references
B. Hoekman and A. Mattoo, “Services Trade
Liberalization and Regulatory Reform: Reinvigorating International Cooperation,”
http://www.voxeu.org/index.php?q=node/5969
Thank you