WORLD TRADE  
ORGANIZATION   
WT/COMTD/AFT/W/34 
29 June 2012 
 (12-3512) 
Committee on Trade and Development 
Aid for Trade  
 
 
 
WORKSHOP ON AID FOR TRADE AND SERVICES 
 
Background Note by the Secretariat1 
  
I. SUMMARY 
1. This note is intended as a background note to inform discussion at the workshop on Aid for 
Trade and Services to be held on 11 July 2012;  it  is not an exhaustive analysis of this issue. 
2. Trade in services is a dynamic component of gl obal trade – and one that has been relatively 
neglected in the literature on trade and economic  development.  In 2010, developing economies 
accounted for 31 per cent of world exports of co mmercial services.  Participation by developing 
countries in global trade in services varies considerably  by type of service and also by region.  The 
highest export shares of developing countries are in construction and travel.   
3. Services matter for development for a variety of reasons, including as an avenue for export 
diversification, as an input into the production of goods and services and because of the service 
sector’s contribution to employment and poverty alleviation.  Advances in information and 
communications technology, combined with rapid gr owth in technology and the global expansion of 
the internet are transforming the tradeability of servi ces.  Services can be an input for trade in goods 
(and other services), but also a "final export" for direct consumption. 
4. The General Agreement on Trade in Services (GAT S) is the first and only set of multilateral 
rules covering international trade in services.  The agreement contains various development 
provisions – including those being further discussed as part of on-going negotiations.  Related WTO 
activities include targeted and coordinated technical  assistance and capacity building programmes.   
5. Aid for Trade is helping address various s upply-side and trade-related infrastructure 
constraints which developing and Least-Develope d countries (LDCs) face across service sectors.  
Estimating the level of support offered by donors to the development of trade in services is complex.  
In some service sectors there is close corresponde nce between the Services Sectoral Classification 
List and reporting codes used in the OECD Creditor Reporting System, in others there is not.  Only a 
few case stories submitted for the Third Global Review of Aid for Trade deal directly with services.  
Most case stories discuss services as part of larger  programmes of assistance; of these, most were 
submitted about business support services. 
6. Tourism is the main source of foreign excha nge for one-third of developing countries and 
one-half of LDCs.  Aid-for-Trade support to tour ism grew from an average of US$28.87 million in 
the base period of 2002-2005 to reach US$165.8 million in 2010.  Aid for Trade support to the tourist 
                                                      
1 This document has been prepared under the re sponsibility of the WTO Secretariat and without 
prejudice to the positions of Members and to their rights and obligations under the WTO. WT/COMTD/AFT/W/34 
Page 2  
 
  sector in LDCs also grew from an average of  US$11.8 million between 2002-2005 to reach US$57.2 
in 2010.   
II. DEVELOPING COUNTRIES PARTICIPATION IN TRADE IN SERVICES 
7. The term services covers a wide range of inta ngible and heterogeneous products and activities 
that are difficult to encapsulate within a simple de finition.  The Services Sectoral Classification List 
groups services under 12 headings:  Business Services ;  Communication Services;  Construction and 
Related Engineering Services;  Distribution Services;  Education Services;  Environmental Services;  Financial Services;  Health Related and Social Services;  Tourism and Travel-related Services;  Recreational, Cultural and Sporting Services;  Tran sport Services;  and Other Services not included 
elsewhere.
2  
8. Services account for approximately 70 per cent of  global gross domestic product (GDP).  The 
share of services value added in GDP tends to rise significantly with income.  Services account for 
73 per cent of GDP on average in high-income countries, against 54 per cent and 47 per cent 
respectively in middle- and low- income countries.   In low-income countries, the production of 
services is also a core economic activity, whose contri bution to GDP is above that of both industry 
and agriculture. 3 
9. The proportion of traded services generated by de veloping countries is rising rapidly.  Service 
exports from developing countries more than tripled in the period 1997-2007.   In 2010, developing 
economies accounted for 31 per cent of world exports  of commercial services.  Table 1 below shows 
the participation of developing economies in global trade in services.   
Table 1:  Trade in commercial services by region and selected economies, 2008-2010 
 (Billion dollars and percentage) 
 
 Exports Imports 
  2010 2010 
  Value Share/world Value Share/world 
Developing 
economies  1,142 30.9 1,254 35.7 
Latin America 127 3.4 158 4.5 
Developing Europe 54 1.5 29 0.8 
Africa 85 2.3 139 4.0 
Middle East 97 2.6 184 5.2 
Developing Asia  780 21.1 743 21.2 
World  3,693 100.0 3,511 100.0 
Developed 
economies 2,471 66.9 2,150 61.2 
Commonwealth of 
Independent States 79 2.1 107 3.0 
LDCs (49) 19 0.5 55 1.6 
Source:  WTO Secretariat (WT/COMTD/W/181). 
 
                                                      
2 These sectors are further subdiv ided into a total of some 160 sub-sectors.  See MTN.GNS/W/120. 
3 Significant differences exist between countries w ithin the same income gr oup, as for example for 
India and Nigeria – two middle-income countries whose respective shares of serv ices in GDP are 54 and 
27 per cent, or Kenya and Liberia – two low-income  countries whose shares are 54 and 22 per cent.  WT/COMTD/AFT/W/34 
 Page 3 
 
 
  10. The structure of developed and developing economies' commercial services exports is 
compared in Figure 1.  It highlights that in 2010 travel and transport made up a larger portion of service exports for developing countries (56 per ce nt) than for developed countries (42 per cent).  
Royalties and license fees for developed countries account  for 9 per cent of export earnings, but only 
1 per cent in developing countries.  Computer and information service exports are higher for 
developing countries than for developed. 
Figure 1:  Structure of developed and developi ng economies' commercial services exports, 2010 
(Percentage)  
 
Transport
23%
Travel
33%Communi-
cations 
services
2%Construc-
tion
3%Insurance 
services
1%Financial 
services
4%Computer 
and 
informa-
tion 
services
7%Royalties 
and licence 
fees
1%Other 
business 
services
25%Personal, 
cultural, 
and recrea-
tional 
services
0.5%Developing economies
Transport
20%
Travel
22%
Communi-
cations 
services
3%Construc-
tion
2%Insurance 
services
3%Financial 
services
9%Computer 
and 
informa-
tion 
services
5%Royalties 
and licence 
fees
9% Other 
business 
services
26%Personal, 
cultural, 
and recrea-
tional 
services
1%Developed economies
 
Source: WTO Secretariat (WT/COMTD/W/181). 4 
 
11. Chart 1 shows that participation by developi ng countries in global trade in services varies 
considerably by type of service and also by region.  The highest export shares of developing countries were recorded in construction and travel (40 per cent and above) while in computer and information 
services, transport, and other business services they ranged between 30 and 37 per cent.
5 
                                                      
4 Over recent years, the number of developing economies reporting services transactions in their 
Balance of Payments (BOP) increased significantly.  Yet, despite progress, the lack of data remains a problem.  For example, for many African and Midd le Eastern countries, the absence of a detailed services breakdown does 
not allow the provision of estimates of their trade in impor tant sectors such as construction, financial services, or 
insurance. Very few economies publish bilateral trade flows in commercial services, thus, for tracking the 
direction of their trade, the main source of information is currently developed economies' mirror data.  Finally, 
to the Secretariat's knowledge, less than a handful of  developing economies compile Foreign Affiliates Trade 
Statistics (FATS), useful for assessing the importance of GATS mode 3 (commercial presence).  For recent developments in services trade data compilation and availability, see document S/C/W/329. 
5 The analysis is mainly focused on services exports due to the better quality of these statistics. WT/COMTD/AFT/W/34 
Page 4  
 
  Chart 1:  Respective shares of developing , developed and CIS economies' exports  
in world trade by category of commercial services, 2010  
 (Percentage) 
0%10%20%30%40%50%60%70%80%90%100%
Developing economies Developed economies CIS
 
Source: WTO Secretariat (WT/COMTD/W/181).  
 
12. In 2010, around 42 per cent of world construction exports came from developing economies.  
Exports originated predominantly from developing Asia (37 per cent) where China and the Republic 
of Korea became the second and third leading global suppliers.  In 2010, the two economies 
accounted together for 28 per cent of word construction exports on a BOP basis.  
13. In 2010, developing economies accounted for some 40 per cent of global travel exports 
compared to 35 per cent in 2008.  Much of this expansion stems from higher travel earnings by 
developing Asian economies.  Th e participation of Middle Eastern countries also rose due to a 
booming tourism industry in the United Arab Emirates  and Lebanon.  Despite ro bust growth in Egypt, 
South Africa, and Morocco, Africa's share in world travel exports was stable at 4 per cent.  For 
African countries, travel revenues made up for almost  50 per cent of their total exports of commercial 
services. 
14. Developing economies play a prominent role in e xports of computer and information services.  
In 2010, their participation climbed to 37 per cent, compared to 30 per cent in 2008.  Developing Asia 
accounted for the largest part (30 per cent) followe d by Latin America (2 per cent).  Developing 
economies' contribution in this was concentrated, how ever, in a few countries.  In 2009, the first three 
leading exporters (India, China and Israel) accounted for the vast majority of the developing group's 
exports, and one quarter of world exports.  India alone contributed 18 per cent of global exports of 
computer and information services. 
15. In 2010, one-third of world exports of tran sportation services originated from developing 
economies, of which 23 per cent was from developing Asia.  Transport is one of the most important 
service sectors for the developing group, represen ting some 23 per cent of their total exports of 
commercial services in 2010.  The Republic of Ko rea was the leading exporter, followed by China 
and Singapore.  According to UNCTAD's Review of  Maritime Transport 2010, more than 60 per cent 
of international seaborne trade originates from developing economies.  WT/COMTD/AFT/W/34 
 Page 5 
 
 
  16. In 2010, the contribution by developing economies to world exports of other business services 
reached 30 per cent.6  One quarter of global exports came from developing Asia.  In some services 
sectors, such as finance, insurance, as well as communications, the contribution by developing 
economies to world trade is more modest, around 20 per cent. 
III. TRADE IN SERVICES AND DEVELOPMENT 
17. Services matter for development for a variety of reasons.  Three are cited here:  first, as an 
avenue for export diversification;  second, as an input  into the production of goods and services;  and 
third, as a significant contributor to employment and poverty alleviation.   
18. Trade in services, particularly business services,  is a dynamic component of trade – and an 
option for export diversification in  developing countries.   The recent development experience of 
South Asia and the increasing tradeability of servi ces support this position.  South Asia's, and in 
particular India's, recent experience shows that gr owth has been led by services exports – and that 
labour productivity levels in services can be  higher than those in industry.   
19. Increasing tradeability is driving a "Service Re volution".  Advances in information and 
communications technology, combined with rapid gr owth in technology and the global expansion of 
the internet are transforming the tradeability of servi ces.  Services can be an input for trade in goods 
(and other services), but also a "final export" for direct consumption.  Services are also increasingly subject to the same unbundling as trade in goods i.e. a single service activity in the global supply chain can now be completed across different ge ographic locations.  Increasing specialization and 
sophistication in the service exports of developi ng countries are offering new avenues for economic 
development.   
20. Services have a significant impact on growth and efficiency across a wide range of industries, 
and economic performance overall.  Services are e ssential inputs in the production of virtually all 
other goods and services, and producers depend on servi ces to deliver their output to end-users.  
Because the price and quality of the services avai lable in an economy have major impacts on all 
sectors, service sector policies and efficiency enhancing reforms – including regulatory and 
institutional changes – can exert major effects on overall economic performance.  Sectors such as 
transport, telecommunications and financial services are key determinants of the conditions in which 
persons, merchandise, services and capital flow.  Infrastructure services – financial, transport, 
telecommunications, water and energy – are fundam ental for development, including in providing 
access to essential services for attaining the MDGs on wa ter, energy, health and education.  Services 
have become a fundamental economic activity and play a key role in infrastructure building, 
competitiveness and trade facilitation.   
                                                      
6 In the 5th edition of the IMF Balance of Payments services  classification, the cat egory "other business 
services" covers international transactions in:  (i) mercha nting and other trade-related services;  (ii) operational 
leasing services;  and (iii) miscellaneous bus iness, professional and technical services. WT/COMTD/AFT/W/34 
Page 6  
 
    
Box 1:  Professional Serv ices in Southern Africa 
Professional services are vital for development in Southe rn Africa.  Accounting, legal and engineering services 
contribute directly and indirectly to economic growth, including by lowering transactions costs, being key inputs and creating spillovers of knowledge to other sectors. Grea ter usage of professional se rvices is associated with 
higher labor productivity for firms - particularly smal l firms - across countries in Southern Africa.  While 
professional services are among the fastest growing serv ices sectors in Southern Africa, their weaknesses and 
underdevelopment are dwarfing their current contribution to growth in the region. Southern African countries 
have initiated regional integration in the context of the Southern African Development Community (SADC), but 
little progress has been made as yet on liberalizing servic es.  Regional integration could bring gains given the 
differences in endowments and levels of development of professional services within the region
.  
Source:   Towards a Regional Integration of Professional Services in Southern Africa, Nora Dihel, Ana M. 
Fernandes and Aaditya Mattoo, World Bank  November, 2010. 
21. The importance of services in the global economy is mirrored in employment statistics.  
Looking at developments over the 1997-2007 period, a significant shift of employment from the agriculture and industry to the services sector can be observed.  Services' contribution to total 
employment gained on average 5 percentage points in high income countries. Available information 
suggests that the increase was also sharp on averag e in most middle- and low- income countries.  
Employment data further confirm the importance of  the services sector, which accounts for more than 
half of the employment in many countries.   
22. Services help lessen poverty through two channels .  Directly, they provide the largest source 
of new job growth.  Indirectly, they provide the income that, when spent, drives further demand for 
goods and services and for the jobs to produce them .  In addition to direct job creation, some 
estimates suggest that the indirect effect of a gr owing services sector can be larger than its direct 
effect. For instance, India's information technology industry association (NASSCOM) estimates that 
for every job created in the information technology sect or, four additional jobs are created in the rest 
of the economy, because of the high levels of c onsumption spending by professionals employed in 
this sector.
7  One World Bank study that examined a sample of 50 developing countries over the 
period 1990-2005, found that growth in the services sector was more closely correlated with poverty 
reduction than growth in agriculture.8 
IV. WTO GENERAL AGREEMENT ON TRADE IN SERVICES (GATS)  
23. The GATS is the first and only set of multilateral rules covering international trade in 
services.  The GATS rests on three pillars.  The firs t is the framework agreement, containing basic 
obligations that apply to all member countri es.  The second concerns national schedules of 
commitments containing specific further national commi tments which are the subject of a continuing 
process of liberalization.  The third is a number of annexes addressing the special situations of 
individual services sectors.  The GATS covers all in ternationally-traded services with two exceptions:  
services provided to the public in the exercise of gove rnmental authority;  and, in the air transport 
sector, traffic rights and all services directly related to the exercise of traffic rights.  
                                                      
7 The Service Revolution, Ejaz Gh ani and Homi Khara, Economic Premise, Number 14, May 2010, 
World Bank. 
8 Ibid.  WT/COMTD/AFT/W/34 
 Page 7 
 
 
  24. The GATS defines four ways in which a service can be traded, known as "modes of supply": 
 Mode 1:  services supplied from one country to another – i.e. "cross-border supply";   
 Mode 2:  consumers from one country making use of a service in another country i.e. 
"consumption abroad";   
 Mode 3:  a company from one country setting up subsidiaries or branches to provide services 
in another country: i.e. "commercial presence"; and   
 Mode 4:  individuals travelling from their own country to supply services in another: i.e. 
"movement of natural persons". 
25. The GATS allows Members to choose those ser vice sectors or subsectors on which they will 
make commitments guaranteeing the right of foreign suppliers to provide a service.  Each Member 
has a schedule of commitments, but there is no mi nimum requirement as to its coverage.  For those 
services that are committed, Governments may set limitations specifying the level of market access 
and the degree of national treatment they are prepar ed to guarantee.  Governments are also able to 
limit commitments to one or more of the four recognized "modes of supply" through which services 
are traded.  GATS rules also provide for the withdr awal and renegotiation of commitments.  In order 
to provide more favourable treatment to certain tr ading partners, Government s may take exemptions, 
in principle limited to ten years' duration, from the MFN principle, which is otherwise applicable to 
all services, whether scheduled or not.  The Agr eement contains a number of general obligations 
applicable to all services, the most important of which is the MFN rule.  
26. Each Member defines its own obligations th rough the commitments undertaken in its 
schedule. Because it is a basic principle of the Ag reement that developing countries are expected to 
liberalize fewer sectors and types of transactions, in line with their development situation, the 
commitments of developing countries are in general less extensive than those of more industrialized 
countries.  The agreement contains a series of development provisions, including, inter alia : 
 The agreement states that liberalization of trade in services should aim to achieve the 
development of developing countries;  
 It calls for the facilitation of the increasing par ticipation of developing countries in trade in 
services and the expansion of their service exports including, inter alia , through the 
strengthening of their domestic services capac ity and its efficiency and competitiveness;  
 It calls for liberalization in priority in sectors and modes of interest to developing countries;  
 The GATS requests that special priority be given to LDC Members;  
 It indicates that the process of liberalization should take place with due respect for national 
policy objectives and the level of development of individual Members, with appropriate 
flexibility for individual developing country Members;  
 Other GATS provisions ensure that developing c ountries have more flexibility in pursuing 
economic integration policies, maintaining rest rictions on balance-of-payments grounds, and 
determining access to and use of their telecommunications transport networks and services;  and  WT/COMTD/AFT/W/34 
Page 8  
 
   Provide for technical assistance to developi ng countries, including by making available 
information on recent developments in ICT and assi sting in transfer of technology, training 
and other activities  
27. The GATS, including its Annexes and Related In struments, set out a work programme (the 
"built-in" agenda) which reflected that not all servi ces-related negotiations coul d be concluded within 
the time-frame of the Uruguay Round, and that Members had already committed themselves, in 
Article XIX, to successive rounds aimed at achieving a progressively higher level of liberalization.  In 
addition, various GATS Articles provide for issue-sp ecific negotiations intended to define rules and 
disciplines for domestic regulation (Article VI),  emergency safeguards (A rticle X), government 
procurement (Article XIII), and subs idies (Article XV).  At the sectoral level, negotiations on basic 
telecommunications were successfully concluded in February 1997 and negotiations in the area of 
financial services in mid-December 1997.
9  
28. Under the mandate of Article XIX , the latest round of negotiations began in January 2000.  In 
March 2001, the Council for Trade in Services in  Special Session approved the "Guidelines and 
Procedures for the Negotiations on Trade in Services".10  At the Doha Ministerial Conference in 
November 2001 the services negotiations became part  of the "single undertaking" under the Doha 
Development Agenda.  The Negotiating Guidelin es were complemented by "Modalities for the 
Special Treatment for Least-Developed Country Members".11  The Modalities ensure "maximum 
flexibility" for LDCs and commit all members to exercising restraint in seeking commitments from 
LDCs as well as giving special priority to sectors and modes of export interest to these members in 
preparing their own schedules.12  Amongst the modalities foreseen by the guidelines are, inter alia :  
 i) Strengthening programmes to promote invest ment in LDCs;  ii) reinforcing export/import 
promotion programs;  iii) promoting the deve lopment of LDCs' infrastructure and services 
exports through training, technology transf er, enterprise level actions and schemes, 
intergovernmental cooperation pr ogrammes, and where feasible, financial resources;  and 
iv) improving the access of LDCs' services and ser vice suppliers to distribution channels and 
information networks, especially in sectors a nd modes of supply of interest to LDCs;  
 Targeted and coordinated technical assistance and capacity building programmes , including 
for national assessments of trade in services. 13 
29. In December 2011, the Eighth WTO Ministeria l Conference adopted a waiver that allows 
WTO Members to deviate from their most-favoured-na tion obligation of non-discrimination in order 
to provide preferential treatment to services a nd service suppliers from LDCs.  Of the 155 WTO 
Members, 32 are LDCs that stand to benefit from preferential treatment designed to promote their 
trade in those sectors and modes of supply that are of particular export interest to them.14 
                                                      
9 For  more information see : Telecommunication Se rvices, Background Note  by the Secretariat, 
S/C/W/299 and S/C/W/299/Corr.1 10 June 2009 and Financial Services, Background Note by the Secretariat, S/FIN/W/73 and S/FIN/W/73/Corr.1 February 2010.   
10 S/L/93. 
11 TN/S/13. 
12 Annex C of the Hong Kong Ministerial Declar ation of December 2005 (W T/MIN(05)/DEC) also 
provided guidance in this regard and called upon Members to establish appropriate mech anisms to give effect to 
the modalities. 
13 UNCTAD has carried out national assessments of trade in services in Nepal, the Kyrgyz Republic 
and Uganda.  For more information, see: "http://unctad.org/en/Pages/DITC/TNCD/Trade-Negotiations-and-
Commercial-Diplomacy-.aspx"  
14 An overview of the key stages and the status of the Services Negotiations can be found at : 
http://www.wto.org/english/trat op_e/serv_e/key_stages_e.htm .  WT/COMTD/AFT/W/34 
 Page 9 
 
 
  V. AID FOR TRADE AND SERVICES   
30. Lack of access to various kinds of services has been shown to be a critical constraint on 
development.  Various factors can hold back the pa rticipation of developing countries in trade in 
services, including, inter alia :15  
 Lack of access to financing for export or bus iness development.  Developing country services 
exports are often in areas where capital requirement s are relatively low, or where there is the 
possibility to gain access to capital via internationa l partnerships.  A low level of income in 
the domestic market could make it difficult for companies to build up a sufficient client base 
at home to act as a platform for export. 
 Lack of access to reliable and inexpensive in frastructure. Poor telecommunications services 
impact on out-sourcing or back office export pot ential, while a lack of reliable energy and 
transport raises costs for all service sectors. Poor infrastructure could also affect the ability of 
a company to provide reliable service and thus lead to credibility problems with clients. 
 Lack of access to a range of formal and in formal networks and institutional facilities 
necessary for trade.  These include everythi ng from a sound domestic legal environment for 
business, links to other exporters or export associ ations or to broader business networks. For 
services in particular, given the close linkages between service sectors, problems could arise 
for services companies with the lack of availab ility of supporting services in the home market.  
 Limited availability of trained staff and vocati onal training.  One major constraint to setting 
up new service operations is finding either suitable qualified or experienced staff.  This can be 
further compounded by an absence of the nece ssary educational infrastructure, notably 
vocational training. 
31. Aid for Trade is helping address these supply-side  and trade-related infrastructure constraints 
across different service sectors.  Improving developing country firms' access to business development 
services is one of the core instruments for promoting income and employment generation for poor 
people.  The same applies to financial services wher e a deepening of markets for such services is an 
important element in many programmes ai med at stimulating pro-poor growth.16 
32. Estimating the level of support offered by donor s to the development of trade in services is 
complex.  In some service sectors there is cl ose correspondence between the Services Sectoral 
Classification List and reporting codes used in the OECD Creditor Reporting System (e.g. transport 
services, banking and financial services, communication services, tourism).  In other service sectors, 
the calculation is more difficult since the services'  classifications do not readily correspond to CRS 
reporting themes (i.e. in agriculture, forestry, fish ing, mining and trade policy).  Under these reporting 
themes, support may be provided to services in specific subsectors (e.g. agricultural financial services, forestry services or mineral prospection and explora tion).  Furthermore, an important distinction to 
make is between support that aims to put the infrastru cture in place for services  (e.g. road, rail, airport 
or port infrastructure), and establishing appropriate conditions for the emergence of service providers, 
including conducive regulatory enviro nments for the private sector.   
                                                      
15 Opening Up Trade in Services: Opportunities and Gains for Developing Countries,  OECD Policy 
Brief, August 2003.   
16 Promoting Pro Poor Growth Private Sector Development, OECD 2006. WT/COMTD/AFT/W/34 
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  Table 2:  Aid-for-Trade flows 2005-2010 in US$ millions 
2005 2006 2007 2008 2009 2010 
Transport & Storage 7,526 7,153 7,690 13,467 13,546 14,222 
Communications 395 494 545 392 644 441 
Energy 4,606 4,830 6,537 8,262 7,428 12,225 
Banking & Financial Services 1,683 1,639 2,167 3,529 3,672 2,696 
Business & Other Services 1,075 1,479 2,105 2,143 1,642 1,993 
Agriculture 3,846 4,099 5,897 6,710 7,873 8,161 
Forestry 567 492 654 720 569 1032 
Fishing 273 219 296 475 572 368 
Industry 1,452 1,569 1,172 1,991 1,504 1,743 
Mineral Resources & Mining 847 399 74 685 439 476 
Trade Policies & Regulations 664 1,049 809 1,106 1,351 1,207 
Tourism 165 459 88 65 181 166 
Total 23,099 23,880 28, 034 39,545 39,421 44,730 
Source:   OECD Creditor Reporting System 
33. From Table 2 it is clear that significant support is being extended in areas important to 
addressing supply-side and trade-related infrastructure c onstraints.  In terms of flows, the highest level 
of support appears to be provided to the transport and storage sector.   
34. In response to the joint OECD-WTO call for case stories, a total of 276 cases stories were 
received.  Table 3 below provides an overview of those which touch on services-related issues. From the table, it is clear that there were few case stori es which dealt directly with services directly.  Most 
cases stories were submitted about business support ser vices (a category which also includes case 
stories dealing with business regulatory reform case stories).  Next largest as a category was transport 
services, where case stories focused on road and rail links.  Many case stories also touched on services 
as part of the training with regard to trade-related technical assistance. 
Table 3:  Aid for Trade case stories on Services 
Services 
classification Thematic area Case story title and number 
Business Services Business climate and 
business support 
services:  Exporta Facil (16) Kenya Business Regulatory Reform Unit (17)  
Caribbean Export Development Agency (20), Chile Pymexporta 
(32), EBRD Business Advisory Services Program (38), ACCESS! Export Training for Women Entrepreneurs in Africa (46) Aid for 
Trade and export performance: A business perspective – Uganda 
(77), Chile Coaching Exportador (123) Chile strengthening of export institutions in El Salvador (124) Caribbean Aid for Trade 
and Regional Integration Trust Fund (153), Costa Rica FDI 
Attraction and Participation in Gl obal Value Chains (156) Malawi 
Business Environment Strengthening (160), Spain Support for 
technical industrial centers in Morocco (179), Colombia Project 
Assistance from EU for Export (227) Maldives EIF support to 
streamline business support services (240) Tanzania Business 
Sector Support Programme (248) 
Communication Services Telecommunications 
system infrastructure Dominican Republic reform of digital telecoms with USAID 
support (231) 
Distribution Electricity generation African Development Bank NEPA-CEB Electricity  WT/COMTD/AFT/W/34 
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  Services 
classification Thematic area Case story title and number 
Services and distribution  Interconnection Project (Nigeria, Benin, and Togo ) (1) 
Education 
Services Vocational training  New Zealand Recogni zed Seasonal Worker  Programme (86) , 
World Bank Improving skills in Lesotho (127), Australia Pacific Technical College (176),  
Environmental Services Clean technology and 
negotiation World Bank Environmental Goods and Services (167) Swiss State 
Secretariat for Economic Affairs support for resource efficient and 
clean production in Colombia (183) 
Financial 
Services Trade finance support  ADB Trade Finance Programme (8) EBRD Trade finance 
programme (39), IADB Trade Finance Reactivation Programme 
(117), Creating an Engine for Growth and Development ‐ Export 
Credit Agency (146) 
Tourism Tourism Comoros business services and regulatory environment (including 
for tourism) (28) St Vincent and the Grenadines Tourism Development (264) 
Transport 
Services  Road and rail 
transport services ADB GMS East-West Corridor (8) Almaty-Bishkek Regional 
Rehabilitation Program (10), IADB  Meso-America Project (120), 
Revamping the Regional Railway Systems in Eastern and Southern Africa (144) UK Trademark Southern Africa North-
South Corridor Roads (149), JICA Truck Movement without 
transshipment along East-West Corridor (163), Rjeka Zagreb Motorway (228) (265, 276 
Not applicable Trade policy support 
(including training on 
services):  Hub and Spokes Programme (22, 33, 220), 53, Korean Capacity 
Building in the Trade in Goods and Services for Cambodia (79), 
Promoting   Service exports fron Niger (83), World Bank 
Mauritius Loan (131), Jamaica’s National Export Strategy (143)  
153, 167, Trinidad and Tobago Services Trade Mission to 
Guadeloupe and Martinique (188) Singapore Cooperation Programme (261) 
Source:   WTO Secretariat and OECD (case stories can be accessed at http://www.aid4trade.org  
35. Most case stories examined services in the contex t of a broader scope of activities undertaken.  
Dedicated case stories about services sectors were fewer in number, and focused on communications, financial, telecommunications and tourism sector s.  Case stories about education services submitted 
by Australia and New Zealand described vocatio nal training programmes in the context of the 
temporary movement of natural persons, e.g. through New Zealand's recognized seasonal worker 
scheme.   
Box 2: Aid for Trade, vocational training and temporary movement of natural persons 
Australia  submitted a case story on the Australia Pacific T echnical College (ATPC), a Pacific-wide project to 
increase the supply of skilled Pacific workers to meet industry needs and provide employment opportunities in 
five industry sectors:  automotive;  manufacturing;  construction and electrical;  tourism and hospitality;  and 
community services.  The Project contributes to regional integration, trade in servi ces and labour mobility, and 
has fulfilled a niche role by providing training not previously available in the region.  As of February 2011, 1,386 students were enrolled and 2,424 had graduated.  CS Ref. no. 176. 
New Zealand  submitted a case story on its Recognised Seas onal Employer (RSE) Worker Pilot Training 
Programme, "Vakameasina-Learning for P acific Growth".  The project provid es training for Pacific workers to 
develop English literacy, numeracy and financial literacy  skills and aims to increase opportunities and choices 
for Pacific RSE workers.  The case story argues the vi ew that labour mobility can contribute to achieving 
sustainable economic development and can  be a potential catalyst for increased  trade in goods and services.  CS 
Ref. no. 86  
 WT/COMTD/AFT/W/34 
Page 12  
 
  36. Various case stories refer to the impact of assist ance provided.  A survey by the International 
Trade Centre (ITC) of trade associations and enterp rises in Uganda, in partnership with the Uganda 
Export Promotion Board, looked at the perceived ef fectiveness of Aid for Trade reported substantial 
improvement in factors such as economic and physical infrastructure and information and 
communications technology (ICT) over the last five years.  Positive performance was registered for 
the services sectors, where export values and the capac ity of Ugandan exporters have improved.  At a 
programme level, the European Bank for Reconstr uction and Development noted that its Business 
Advisory Services Programme for micro and small- and medium-sized enterprises resulted in improvements in exports for 20 per cent of th e 995 companies that had benefited from the  
programme since 2008 (CS Ref. no. 38). 
37. Case stories addressing the business environment may not only be important in their 
immediate outputs (e.g. laws changed, procedures stre amlined, etc.).  Such projects can also be an 
important contributory factor to attracting foreig n direct investment.  In 2010, foreign direct 
investment in services amounted to US$ 338 billion (or 30 per cent of total FDI).17  
VI. TOURISM, DEVELOPMENT AND AID FOR TRADE  
38. Specific service sectors can contribute significantly to economic development, and tourism is 
one example.  Many developing countries have an  important interest in tourism.  The worldwide 
contribution of tourism to GDP exceeds 5 per cent.  As noted, tourism is the main source of foreign 
exchange for one-third of developi ng countries and one-half of LDCs,.  
39. Tourism is also a complex industry. It can generate significant econom ic activity through 
linkages with other industries, such as agricultu re, manufacturing and services. Backward linkages 
occur as tourism demands goods and services inputs from other sectors. Forward linkages arise since 
tourism can also be a supplier of goods and servi ces to other sectors.  An UNCTAD study suggests 
that tourism consistently scores stronger linkages (both backward and forward) than other services 
sectors, suggesting that tourism may be one of the most interconnected services sectors. 18 
40. Tourism can be a useful means to promot e economic diversifi cation and strengthen 
developing economies, owing to its connections w ith related services, manufacturing and agriculture 
sectors of an economy.  In many countries, particularly small states, tourism services not only generate income, foreign exchange, and employment , but also serve as a catalyst for other economic 
activities such as agriculture, fisheries, crafts and manufacture.  Tourism can also be a source of government revenue used to finance a range of we lfare services to citizens and the development of 
infrastructure used by the whole community.  For countries such as Cape Verde, Maldives and 
Samoa, tourism has been a decisive factor supporting their graduation from LDC status.  
41. In many countries the tourism sector has in the past suffere d from a lack of political and 
popular support, because its economic importance ha s often been underestimated.  The industry has 
typically been difficult to define and measure si nce it comprises sellers of many heterogeneous 
products.  Development of the Tour ism Satellite Account (TSA) is helping grow awareness of the role 
of tourism as a productive activity and its potent ial to generate significant direct and indirect 
economic bennbefits.  Broadly define d, tourism can be regarded as one of the world's largest and 
fastest growing industries. The sector is a major dir ect employer, and supports a much wider indirect 
employment base in supplying industries.  
                                                      
17 World Investment Report 2011:  Non-Equity M odes of International Production and Development, 
UNCTAD. 
18 Services, Trade and Development, Mina Mashay ekhi, Marcelo Olarreaga, Guido Porto , UNCTAD, 
2011.  WT/COMTD/AFT/W/34 
 Page 13 
 
 
  42. Aid-for-Trade support to the tourist sector is captured directly in the OECD CRS which 
contains a discrete reporting code for donor assistan ce to the tourist sector.  Table 4 below shows 
assistance provided to different income categories of  developing countries over the period 2002-2010.  
Assistance to all developing countries to the tourism sector totalled US$581.2 million between 2002-2010.  Assistance grew from an average of US $28.87 million in the base period of 2002-2005 to 
reach US$165.8 million in 2010.   
43. Aid for Trade support to the tourism sector is marked by a high number of small projects.  In 
the period 2002-2010, only 87 projects of the 1,854 projects listed were larger than US$1 million in 
size.   
Box 3:  Aid for Trade assistance to the touris t sector in St Vincent and the Grenadines 
In recognition of the decline in banana production and export and the growing importance of services, 
particularly tourism services to the economy of the coun try, the Government of St Vincent and the Grenadines 
(SVG) has engaged since 1998 in the sustainable development of the tourism sector with financial support from 
the European Commission.  The tourism sector has emerged within the last decade as the nucl eus around which 
services have been developing and illustrates the new strategic direction and the new sources of growth for the 
economy over the medium to long term.  This Tourism Development Project has two main components: the 
development of twenty tourism sites and of a National Park System, including institutional strengthening of the 
National Parks Authority.  Through the implementation of the Tourism Development Project with the active 
involvement of the communities, the Government is seek ing to spread the benefits of tourism to the rural 
communities as an instrument of poverty reduction.  Results cited include: job opportunities have been provided 
because of the Park System which ar e impacting on poverty reduction, gr eater community participation in the 
development, management and benefits of natural resources, increases registered in internal and international 
tourism.  CS Ref. No. 264.  
 
44. The high level of GATS commitments in the tourism sector indicates that WTO Members 
recognise the important complementing role that  the GATS can play in tourism development, 
although the complete liberalisation of the industry is far from being achieved.  Even with the focus of 
the GATS classification, there remain modal and sub-sectoral imbalances in the commitments and, most importantly, the generally low level of commitments in related sectors adds to the complexity of tourism liberalisation.  The cross-sectoral dimens ion of tourism has been acknowledged in services 
negotiations by a number of devel oped and developing country Member s, particularly in the early 
stages of the Doha negotiations.  The need to  develop safeguards to address international 
anticompetitive business practices in tourism and related sectors has also been noted. 
Table 4:  Aid for Trade to Tourism: Breakdo wn by income groups 2006-2010 in US$ millions
19 
 
 LDCs Other Low 
Income 
Countries Lower Middle 
Income 
Countries Upper Middle 
Income 
Countries Regional or 
global projects 
Average 2002-2005 11.8 5.9 5.5 3.3 2.3 
2006 7.3 2.6 33.2 34.6 11.1 
2007 9.6 2.6 32.2 36.6 7.5 
2008 14.9 10.8 28.9 6 8.6 
2009 43.7 4.4 95.1 11.5 26.5 
2010 57.2 21.8 66.1 10.5 10.2 
Source:   OECD Creditor Reporting Syst em, WTO Secretariat calculations. 
                                                      
19 This table follows OECD income categorization of countries.  For more details, see: 
http://www.oecd.org/dataoecd/9/50/48858205.pdf . WT/COMTD/AFT/W/34 
Page 14  
 
  VII. CONCLUSIONS 
45. Services is the largest economic sector in the world, accounting for more than 70 per cent of 
global output.  The "Services Revolution" has altere d the characteristic and tradeability of services.  
Old ideas of services being non-transportable, no n-tradable, and non-scalable no longer hold for a 
host of modern impersonal services that are moved across borders over the Internet, digitized and 
stored electronically, and scaled into global businesses.
20 
46. The promise of the "Services Revolution" is that  countries do not need to wait to get started 
with rapid development.  The globalization of services provides alternative opportunities for developing countries to find niches beyond manufacturi ng where they can speci alize, scale up, and 
achieve explosive growth—just like the industrialisers.
21  Furthermore, the gains stemming from the 
liberalization of services could potentially be larger  than in all other areas of international trade.22  Aid 
for Trade can help play a role in this process,  notably by helping put in place the appropriate 
conditions for domestic and foreign investment.   
SUGGESTED  FURTHER  READING 
Developing Countries in the WTO Services Negotia tions, Juan A. Marchetti, WTO Staff Working 
Paper ERSD-2004-06  http://www.wto.org/english/res_e/reser_e/wpaps_e.htm   
Exporting Services: A Developing Country Perspec tive by Arti Grover Goswami, Aaditya Mattoo, 
and Sebastián Sáez http://go.worldbank.org/VQ4WIXZ9B0  
LDC Poverty Alleviation and the Doha Development Agenda:  Is Tourism being Neglected?  Dale 
Honeck, World Trade Organization,  Staff Working Paper ERSD-2008-03, 12 August, 2008 - 
http://www.wto.org/english/r es_e/reser_e/wpaps_e.htm  
Opening up Trade in Services: Opportunities a nd Gains for Developing Countries  OECD Policy 
Brief August 2003  http://www.oecd.org/dataoecd/23/14/8890081.pdf  
Participation of Developing Countries in th e Global Trading System, WT/COMTD/W/181, WTO 
Secretariat, 21 October 2011 
Services, Trade and Development, Mina Mashayek hi, Marcelo Olarreaga, Guido Porto , UNCTAD, 
2011 http://archive.unctad.org/ en/docs/ditctncd2010d5_en.pdf  
Services Trade Liberalization and Tourism Development,  Massimo Geloso Grosso, Molly Lesher and 
Enrico Pinali OECD Trade Policy Working Paper No. 57 November 2007  http://www.oecd.org/document/40/0,3746, en_2649_37431_4 4756840_1_1_1_3 7431,00.html    
The Service Revolution, Ejaz Ghani and Homi Kh ara, Economic Premise, Number 14, May 2010, 
World Bank. http://siteresources.worldbank.or g/INTPREMNET/Resources/EP14.pdf   
Towards a Regional Integration of Professional Serv ices in Southern Africa, Nora Dihel, Ana M. 
Fernandes and Aaditya Mattoo, World Bank  November, 2010  "http://siteresources.worldbank.org/INTAFRREGTOPTRADE/Resources/10SouthernAfricaProfessio
nalServicesREDESIGN.pdf" 
                                                      
20 The Services Revolution, Ejaz Ghani and Homi Kh ara, Economic Premise,  Number 14, May 2010, 
World Bank. 
21 Ibid. 
22 Services, Trade and Development, Mina Mashay ekhi, Marcelo Olarreaga, Guido Porto, UNCTAD, 
2011.     WT/COMTD/AFT/W/34 
 Page 15 
 
 
  Uncovering Developing Countries’ Performance in Tr ade in Services, Sebastian Saez and Arti Grover 
Goswami, Economic Premise no.39, November 2010, World Bank  http://siteresources.worldbank.or g/INTPREMNET/Resources/EP39.pdf   
World Investment Report 2011: Non-Equity Modes of International Production and Development, 
UNCTAD. http://archive.unctad.org/templat es/Page.asp?intItemID=1465&lang=1  
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