Transcript
Reaping the Benefits from Trade and FDI 2.0
Erik von Uexkull Country Economist, AFTP3
Conference on ‘Trade and Regulation of Services in Africa’ Addis Ababa, 5/6/2013
Purpose
• Paper commissioned by FPD Investment Climate unit for trade logistics, investment policy and business taxation (CICTI) Review trade, FDI, growth (TFG) linkagesHighlight transformational trends in the global economy
and their impact on TFG relationship Implications for trade logistics / investment policy / tax in
developing countries? Implications for trade and regulation of services in Africa
Why trade and FDI 2.0?
More interactive Extends into new parts of life New players
Why trade and FDI 2.0?
Three transformational trends in global trade and FDI:
More interactive: Trade in Tasks New parts of life: The Internationalization of ServicesMore players: The Rise of the South
Trade in Tasks
Trade in Tasks
Trade in Tasks• Insiders and Outsiders: Firms engaging in trade
in tasks (TNT = both importing and exporting)
The Internationalization of Services
• Services account for over two thirds of GDP, but only 20% of world trade, but that is changing
Serv
ices
Exp
orts
/ G
DP
The Internationalization of Services
“Services can be an engine of export growth for some countries (…) but more important is that they are a key determinant of the competitiveness of all firms in open economies.”
Francois and Hoekman (2009)
The Internationalization of Services
• Services trade can make key inputs cheaper and thus boost competitiveness of domestic firms
The Rise of the South
The Rise of the South
• The ‘great doubling’• A commodity boom• South-North investment• Looking ahead– South-South offshoring?– Another great doubling?
The Great DoublingSh
are
in L
MIC
Man
ufac
turin
g Ex
port
s
• Competition is getting tougher
A Commodity Boom• While demand for commodities is rising
What does all this mean for trade, FDI and growth?
• New gains from trade, but also new challenges
• A wider view on opennessBehind the border issues Services Regulation Stronger trade – FDI complementarityA two way street
• Trade costs matter more • Intra firm trade and global value chains• New markets and new role models
Implications for trade and regulation of services in Africa
• Trade in Services needs to be seen in the context of other fundamental trends in the global economy
• Services play a key role for reaping the benefits from trade and FDI 2.0
• New opportunities in services exports, but imports might be even more important Productivity / competitiveness ‘reverse offshoring’ ‘integration services’ Learning / innovation
Implications for trade and regulation of services in Africa
• But openness to services trade is complex… Regulation Competition Link with FDI Role of the public sector
• … and so is analytical work on services trade
Data Data Data
Thank you!jvonuexkull@worldbank.org
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