RESTRICTED  WORLD TRADE  
ORGANIZATION  S/C/W/326 
29 October 2010 
 (10-5762) 
Council for Trade in Services  
 
 
 
DISTRIBUTION SERVICES 
 
Background Note by the Secretariat1 
  
This Note has been prepared at the request of  the Council for Trade in Services, with a view 
to stimulating discussions in the Council on th e sector of distribution services.  It provides 
background information and updates a previous Note  on the sector (S/C/W/37, dated 10 June 1998).  
This Note focuses on developments and issues considered  to be most relevant to the GATS.  It is not 
intended to provide a comprehensive account of the sector;  many of the observations contained in the 
previous Note remain pertinent today. 
_______________ 
 
  
 
                                                     
 
1 This document has been prepared under the Secret ariat's own responsibility and without prejudice to 
the positions of Members and to their rights and obligations under the WTO. S/C/W/326 
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  TABLE OF CONTENTS 
 
 
DISTRIBUTION SERVICES .......................................................................................................... .....1
 
I. INTRODUCTION ................................................................................................................... .3 
II. DEFINITION OF THE SECTOR...........................................................................................3  
III. GATS COMMITMENTS.........................................................................................................6  
IV. ECONOMIC AND TRAD E PROFILE ..................................................................................9  
A. TRADE STATISTICS ......................................................................................................................9  
B. ECONOMIC OVERVIEW ..............................................................................................................11  
V. EVOLUTION OF THE SECTOR:  KE Y CHARACTERISTICS AND TRENDS ..........12  
A. HORIZONTAL CONCENTRATION AND VERTICAL INTEGRATION .................................................12  
B. INTERNATIONALIZATION AND THE GLOBAL MARKET ..............................................................15  
C. E-D ISTRIBUTION .......................................................................................................................17  
D. DIVERSIFICATION AND EXPANSION STRATEGIES .....................................................................19  
VI. LIBERALIZATION AND BARR IERS TO TRADE ..........................................................20  
A. BARRIERS TO TRADE ................................................................................................................20  
B. IMPACT OF LIBERALIZATION .....................................................................................................23  
C. SOME EXPERIENCES WITH REFORMS AND POLICY TRENDS IN INDIVIDUAL COUNTRIES .........25  
REFERENCES..................................................................................................................... ................29  
ANNEX .......................................................................................................................... .......................33  
  S/C/W/326 
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  I. INTRODUCTION  
1. Around the world,  suppliers of distribution services provide the necessary link between 
millions of producers of goods and b illions of consumers, within a nd across borders.  As such, it is 
key to the proper functioning of a market economy.  Sales of the retail sector account for about one-
third of total consumer spending globally.2 
2. The way the distribution sector interacts w ith producers and consumers has significant 
economic consequences.  The efficiency of the sector  is crucial to ensuring consumer welfare, i.e., 
providing access to a wide variety of goods at competitive prices.  Inefficient distribution services 
limit the extent to which gains from the liberalization of trade in goods benefit consumers in terms of 
lower prices and greater choice.  Exposure to comp etition stimulates local suppliers to improve their 
production methods and standards,  the organization of their supply chains, and their use of 
technology.  Failure of the distribution sector to perform its role well can lead to a significant 
misallocation of resources and economic costs.  Distributors' margins represent a significant portion 
of the final price of products.   
3. The industry is highly dynamic and changing rapidly.  While distributors had in the past been 
perceived as mere dispensers of goods adding little value, modernisation of the sector has boosted 
distributors' contribution to consumer satisfaction by offering a broader range of products and value-
added services (e.g. delivery, after-sales services).  Distribution services are quite diverse, in terms of 
forms (e.g. fixed location stores, electronic comme rce, door-to-door sales, open markets), formats 
(hypermarkets, supermarkets, department stor es, convenience stores, traditional small shops), 
products offering (food vs. non-food, multi-product vs. specialized goods, etc.), and legal structures 
(e.g. independent, integr ated groups, franchises).3  Distributors also interact upstream with producers, 
including across borders, and with various other ec onomic actors, e.g. providers of logistics and 
transport services, payment systems, commercial pr operty managers, or advertising agencies.  The 
sector has evolved to quickly and regularly provide producers with  detailed information allowing 
them to tailor their decisions to consumer demand.  
4. This Note is structured as follows.  The fo llowing Section discusses the definition of the 
sector in the context of the GATS.  An overvie w of GATS commitments and MFN exemptions is 
provided in Section III.  Section IV then revi ews trade flows and broad economic trends, while 
Section V highlights key characteristics and developments in the sector.  Section VI concludes by discussing key trade barriers, reviewing studies on the economic impact of liberalization, and 
presenting some recent policy experiences.
4    
II. DEFINITION OF THE SECTOR 
5. In the GATS, the sector of distribution services essentially consists of the sale of goods to 
final consumers or other re-sellers.  In the Services Sectoral Classification List5, distribution services 
comprise five sub-sectors:  commission agents;  wholesale trade;  retailing;  franchising;  and a residual category "other".  The first three sub-sectors are defined in the W/120 through cross-references to certain categories under section 6 of the CPC Provisional (see Table 1).  In turn, these CPC categories refer to retailing, wholesaling or commission agents' services of goods classified in 
                                                     
 
2 Nordås, Geloso Grosso, and Pinali (2007), p. 7;  Euromonitor (2010). 
3 EC (2010b), p.2. 
4 This Note does not address Members' offers  in the ongoing negotiations nor commitments 
undertaken in preferential trade agreemen ts.  Neither does it discuss classification issues in detail.  Such topics 
have been addressed elsewhere, including in JOB(05)/194;  S/C/W/37;  and Roy (2008). 
5 MTN.GNS/W/120.  Later referred to as W/120.   S/C/W/326 
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  sections 0 through 4 of the CPC Prov.  For ex ample, CPC 63211 (retail sales of pharmaceutical, 
medical and orthopaedic goods) c overs retailing services of goods classified in CPC 352 and 481.   
Table 1:  Distribution Services in the Serv ices Sectoral Classification List (W/120) 
__________________________________________________________________________________ 
 
4. DISTRIBUTION SERVICES      
 
A. Commission agents' services   621 
 B. Wholesale trade services
        622 
 
C. Retailing services   631+632 
    6111+6113+6121 
 
D. Franchising   8929  
 
E. Other  
 
__________________________________________________________________________________ 
 
 6. The specific CPC categories referred to in S ection 4 of the W/120 do  not define wholesale 
trade or retailing services as such.  However, the headnote to section 6 of the CPC Prov. provides further details.  Accordingly, wholesale trade servic es consist of selling merchandise to retailers, to 
industrial, commercial, institutional or other profes sional business users, or to other wholesalers.  
Retailers sell goods for persona l or household consumption.
6  As noted in the previous Secretariat 
background Note and in CPC 621, commission agents are distinguished from wholesalers in that they 
trade on behalf of others (e.g. commodity brokers, auctioneers).   
7. The CPC headnote also highlights that releva nt distribution services encompass a range of 
subordinated services7:   
"The principal services rendered by wholesalers and retailers may be characterized as 
reselling merchandise, accompanied by a variety of  related, subordinated services, such as:  
maintaining inventories of goods;  physically assembling, sorting and grading goods in large 
lots;  breaking bulk and redistribution in sm aller lots;  delivery services;  refrigeration 
services;  sales promotion services rendered by wholesalers ;  and services associated with 
retailers ' business, e.g. processing subordinated to selling, warehousing and garage services." 
(Emphasis in original) 
  
                                                     
 
6 The headnote indicates that distributive trade servi ces consist of:  "selling merchandise to retailers, to 
industrial, commercial, institutional or other professional business users, or to other wholesalers, or acting as 
agent or broker (wholesaling services ) or selling merchandise for personal or household consumption including 
services incidental to the sale of the goods (retailing services )." (Emphasis in original)   
7 The Appellate Body in EC - Bananas has relied on the CPC Headnote to define wholesale trade 
services in the context of the dispute:  WTO, Appellate Body Report, European Communities – Regime for the 
Importation, Sale and Distribution of Bananas, Complaint by the United States , WT/DS27/AB/R, adopted 
5 April 2001, para. 225-227.  S/C/W/326 
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  8. Franchising is qualitatively different from the other three sub-sectors of distribution services.  
In the W/120, it corresponds to CPC 8929 (Other fina ncial assets), which is a residual category under 
CPC 892 (Non-financial intangible assets).  As noted in S/C/W/37, franchisers sell specific rights and 
privileges, for instance, the right to use a particular  retail format or a trademark.  The sub-sector is 
more a description of the type of contractual arra ngement through which a distributor is allowed to 
use a retail format or a trademark.8   
9. A number of observations can be made in view  of these definitional elements.  First, the 
sector of distribution services in the W/120 relates to the distribution of goods, not services.9  Second, 
since there is no indication to the contrary, distribution services involve sales both from a fixed location and away from a fixed location.  Distri bution services encompass electronic commerce to the 
extent that it covers the online sale of goods that ar e subsequently delivered or picked-up.  The sector 
also includes direct selling, which generally involv es the sale of goods directly to consumers in their 
homes or homes of others by a seller,  away from permanent retail locations.
10   
10. Third, the CPC headnote for distribution servi ces distinguishes between wholesale trade and 
retailing on the basis of the identity of the bu yer of the merchandise (personal or household 
consumption for retailing vs. business consumption for wholesale trade).  This suggests that, in this 
particular classification, all sales to businesses (e.g . commercial, industrial, institutional, other 
professional business users) constitute wholesale trade, even if the business is the final consumer.   
11. Fourth, in recent discussions, Members have not ed an incongruence between the sub-sector 
wording in the W/120 and the corresponding CPC cate gories.  For example, while the explanatory 
note to CPC 6121 (Sales of motorcycles and snowmob iles and related parts and accessories) refers to 
wholesaling and retailing of such products, the W/1 20 references this CPC category only in relation 
to "4.C. Retailing Services".  Also, the W/120 does not refer to CPC 613 (Retail sales of motor fuel).  This issue has been discussed in  various meetings of the Committee on Specific Commitments over 
the last years.
11    
12. Fifth, as regards franchising, what is arguably c overed is the sale of the right to use a business 
format or trade name.  Therefore, commitments on franchising would not imply a right for foreigners 
to own, for example, franchised retail outlets, as th is would rather be governed by commitments on 
retailing services.  The W/120 classification is sile nt on whether franchising under 4.D. comprises 
solely franchising in relation to di stribution, or also in other areas, e.g. restaurants, hotels.   
                                                      
8 S/C/W/37, para. 5 and footnote 3.  The only schedule of commitments that provides a definition of 
franchising is that of China, which states:  "Franchising services consist of the sale of the use of a product, trade 
name or particular business format system in exchange for fees or royalties. Product and trade name franchising 
involves the use of a trade name in exchange for fees or royalties and may include an obligation for exclusive sale of trade name products. Business format franchising involves the use of an entire business concept in 
exchange for fees and royalties, and may include the use of a trade name, business plan, and training materials 
and related subordinated services."(GATS/SC/135, Annex 2).  It can also be noted that CPC version 2 includes a category (73340) that mentions franchising more specif ically:  "Licensing services for the right to use 
trademarks and to operate franchises in  respect of other non-produced assets". 
9 The Appellate Body, in looking at China's commitments under the sector of  distribution services, 
which refer to relevant CPC definitions of the W/120,  found that these covered the distribution of physical 
goods (para. 372).  See also footnote 659 to the Panel Report in China - Publications and Audiovisual Products, 
where the Panel states that the CPC s ection on distribution services is solely concerned with the distribution of 
physical products. 
10 Euromonitor (2010), p. 8.     
11 A classification without such in accuracies would be along those lines: Commission agents' services 
(CPC 621 + 61111 + 6113 + 6121);  Wholesale trade services (CPC 622 + 61111 + 6113 + 6121); and Retailing 
services (631 + 632 + 61112 + 6113 + 6121 + 613).   S/C/W/326 
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  III. GATS COMMITMENTS 
13. Despite the sector's contribution to domestic  value-added and employment, distribution 
services have attracted a relatively low level of commitments:  a total of 57 WTO Members (counting 
EC-12 as one) have commitments in the sector.  Of the 57 schedules, 55 contain commitments on wholesale trade, 54 on retailing, 44 on franchisi ng, and 40 on commission agents' services (see 
Table 2).  In addition, four have scheduled commi tments on "other distribution services".  As for a 
number of other sectors, the accession process contribut ed greatly to the tally of commitments on 
distribution services:  all 25 Members that went through the accession process took commitments.   
 
  Table 2:  Summary of Specific Commitments 
 
Members 4.A. 4.B. 4.C. 4.D. 4.E. 
Albania X X X X   
Argentina   X X X   
Armenia X X X X   
Australia X X X X   
Austria X X X X   
Brazil   X X X   
Bulgaria X X X X   
Burundi X X X     
Cambodia X X X X X 
Canada X X X X X 
Cape Verde   X X X   
China X X X X   
Croatia X X X X   
Czech Republic   X X X   
Ecuador   X       
Estonia X X X X   
EC-12 X X X X   
Finland X X X X   
FYROM X X X X   
Gambia X X X X   
Georgia X X X X   
Hong Kong, China      X     
Hungary   X X X   
Iceland X X X X X 
Japan X X X X   
Jordan X X X X   
Korea, Rep. of  X X X X   
Kuwait X X X     
Kyrgyz Republic X X X X   
Latvia X X X X   
Lesotho   X X X   
Liechtenstein X X X X   
Lithuania X X X X   
Mexico   X X     
Moldova X X X X X 
Mongolia   X X     
Nepal X X X X    S/C/W/326 
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  Members 4.A. 4.B. 4.C. 4.D. 4.E. 
New Zealand X X X     
Norway   X X X   
Oman X X X X   
Panama X X   X   
Peru   X X     
Poland   X X     
Romania X X X     
Saudi Arabia   X X X   
Senegal   X X     
Slovak Republic   X X X   
Slovenia X X X X   
South Africa   X X X   
Sweden X X X     
Switzerland X X X X   
Chinese Taipei X X X X   
Thailand X         
Tonga X X X X   
Ukraine X X X X   
United States X X X X   
Viet Nam X X X X   
Total 40 55 54 44 4 
 
  Note: 4.A. Commission Agents' Services;  4.B. Wholesale Trade Services;  4.C. Retailing  
  Services; 4.D. Franch ising;  4.E. Other. 
 
 
14. Overall, aside from the exclusion of certain products (see below), commitments made in 
distribution services contain a relatively low numbe r of limitations to market access and national 
treatment compared to a number of other sectors.  As illustrated in Table 3, this may suggest that many Members that had restrictions in place decided not to make commitments at all rather than to 
bind a given level of openness.  Table 3 also shows that partial commitments in the sector are found in 
mode 3 more than in modes 1 and 2, and that unbound entries are more numerous – although still few overall – under mode 1 than other modes.   
15. The market access and national treatment limitations listed – typically in mode 3 – relate most 
often to foreign equity restricti ons and economic needs tests (ENTs), which typically subject access to 
an evaluation by authorities of what the market "n eeds" or "can bear", sometimes without specified 
criteria.  Bulgaria, Canada, the European Union ( 12 Member States), the Republic of Korea, and Viet 
Nam have all scheduled ENTs, although these vary in scope.  They typica lly apply to retailing, 
although some are listed in relation to wholesale trad e.  For example, a number of EU Member States 
have ENTs in retailing, sometimes in relation to large stores, while Viet Nam's ENT concerns the 
establishment of additional retail outlets (i.e. beyond  the first one).  Korea has ENTs for different 
types of wholesale trade services and, in retailing, pr ohibits department stores and shopping centres.   
  S/C/W/326 
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  Table 3: Level of treatment bound in WTO Members' co mmitments on distribution services, modes 1 to 3  
(Percentage of full commitments, partial commitments, and unbound, per mode) 
 
Level of Commitment in 
Market Access and 
National Treatment 
Columns Mode 1 Mode 2 Mode 3 
Commission Agents' Services 
Full Commitments 75% 90% 80% 
Partial Commitments 13% 5% 18% 
Unbound 13% 5% 3% 
Wholesale Trade Services  
Full Commitments 78% 89% 71% 
Partial Commitments 13% 6% 27% 
Unbound 9% 6% 2% 
Retailing Services  
Full Commitments 70% 89% 67% 
Partial Commitments 19% 6% 30% 
Unbound 11% 6% 4% 
Franchising 
Full Commitments 84% 93%   75% 
Partial Commitments 14% 2% 23% 
Unbound 2% 5% 2% 
Overall Average, Dist ribution Services 
Full Commitments 77% 89% 73% 
Partial Commitments 15% 5% 26% 
Unbound 9% 5% 2% 
 
Note: The proportion of full and partial commitments does not ta ke into account horizontal limitations nor sectoral or 
product exclusions.  Percentages may not add up due to rounding. 
Source : Adapted from Roy (2008), p. 238.   
 
 16. Foreign equity restrictions have only been scheduled by accession countries, i.e. China, 
Jordan, Nepal, Saudi Arabia, Viet Nam, and Ukrain e.  Limits on foreign equity participation are 
sometimes combined with joint-venture requirements.   In some cases, these limitations are to be 
phased-out over time, which may suggest that the accession process produced real liberalization as 
opposed to status quo bindings or even less.  Fo r example, Saudi Arabia's commitments on wholesale 
and retailing services provide for a foreign equity limit of 51 per cent, which is to be raised to 75 per 
cent three years after accession.  Ukraine's commitment on wholesale trade services of books, 
newspapers and magazines provides for a 30 per cent foreign equity limit, which is set to be fully 
liberalized five years after accession.  Viet Nam's commitments on distribution services provide for a joint-venture requirement and a 49 per cent limit to  foreign capital participation, which shall be 
abolished by 2009 and 2008, respectively.   
17. Other limitations in GATS schedules under mode 3 are few and include restrictions on sales 
areas (Switzerland and Liechtenstein).  Few limita tions are scheduled under modes 1 and 2.  Mode 4 
commitments are typically the same as for other sectors committed.
12  Other key barriers are 
                                                      
12 Exceptions are: Hong Kong, China (unbound for the retailing commitment);  Senegal (unbound for 
wholesale and retailing commitments);  and Thailand (unbound for commission agents' services commitment).  
Also, other schedules include limitations under mode 4 in addition to what is provided in the horizontal section:  EC-12 (certain additional residency and nationality requ irements);  Nepal (wholesale commitment);  Burundi, 
Switzerland (retailing commitment).  S/C/W/326 
 Page 9 
 
 
  discriminatory restrictions on the rental or purchase of land and real estate, which are found in the 
horizontal section of many Members' schedules.   
18. A common practice, which may also help expl ain the low number of limitations, is the 
exclusion from commitments of certain products.  For example, some Members have carved-out a 
number of agricultural products from their commitm ents on wholesale trade (e.g. Australia, Canada, 
Japan, Korea, New Zealand).13  Various Members have also excluded the distribution of alcohol, 
firearms, tobacco and pharmaceutical products.  A list of products excluded or omitted from 
commitments on retailing and wholesale trade servi ces is found in Table A-1 in Annex.   
19. Only three Members have MFN exemptions in relation to distribution services:  Switzerland 
and Liechtenstein, both in relation to work permit s for employees of establishments of enterprises 
from EFTA countries, and Venezuel a, with respect to wholesale  trade and commission agents' 
services of petroleum products.   
IV. ECONOMIC AND TRADE PROFILE 
A. TRADE STATISTICS  
20. The services provided cross-border by retailers and wholesalers are not separately measured 
within the balance-of-payments (BOP) services account  or other international economic statistics.  
The value of these services is indistinguishably included in the value of the traded goods.14  
21. Foreign Affiliates Statistics (FATS), which is the best proxy for trade through mode 3, do 
identify a category for wholesale and retail services.  However, such data is only available for a 
limited number of Members (see Table 4), and, except for the United States (see below), the value of 
sales comprises both the commercial margin of the distributor and the value of the traded good.  
Keeping in mind these caveats, these data nevert heless highlight the presence of retailers and 
wholesalers in foreign markets.  It confirms, for example, that suppliers from the United States, 
Germany and France have an important presence abroad.   
22. In the case of the United States, the largest distribu tion market in the world, the greater part of 
its outward FATS in the sector relates to wholesale  services (79 per cent) rather than retailing.  
Overall, wholesale and retail represent a high pr oportion of inward and outward FATS for many 
reporting economies.  For example, the sector acc ounted for 26 per cent of the United States' total 
outward supply of services through affiliates in 2 008, and a similar proportion (28 per cent) for 
inward supply.  US outward supply of services through affiliates engaged in wholesale trade is 
attributable mostly to affiliates in Europe (56 per cent of turnover).  Outward sales in retailing 
services are concentrated mostly in Europe (39 per cent), Canada (30 per cen t), and Latin America (15 
per cent).  As regards inward FA TS, Europe accounts for the preponde rant share in retailing (65 per 
cent), while wholesale trade sales are spread betw een affiliates of European (45 per cent) and 
Japanese (37 per cent) companies.15   
  
                                                     
 
13  Switzerland has excluded goods subject to import authorizations.   
14 The United States has developed experimental estimates of cross-border trade in distribution 
services.  It used exports of good s by wholesalers and retailers and th e average percentage of distribution 
services per dollar of sales of goods.  These 2002 estim ates suggest that with this modification distribution 
services would increase US cross-border exports of services by more than 10 per cent, and imports by more than 20 per cent.  See UN et al. (2010), pp. 109-110 and US BEA (2006).   
15  US BEA (2010).  Calculated on the basis of  th e BEA measure that excludes the value of goods sold. S/C/W/326 
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  Table 4:  Sales by foreign affiliates of resident co mpanies (outward FATS) and by affiliates of foreign 
companies (inward FATS) primarily engaged in wholesale and retail trade activities, 2004-2008   
(US$ million)  
 
Note:  Data refer to total sales, including the value of goods sold.   a  Total sales of services of foreign affiliates primarily 
engaged in wholesale and retail trade ac tivities, including sales margins and excl uding value of goods sold (US BEA 2010).  
Source :  OECD, Eurostat, and national statistics.   OUTWARD INWARD 
Member 
2004 2005 2006 2007 2008 2004 2005 2006 2007 
Austria 35,311 49,654 57,190 41,202     119,291 
Belgium 33,173 42,363   67,204 101,732 110,967  
Bulgaria    28 6581 8399 11221  
Canada 16,304 29,080 31,036 31,189 29,501     
Cyprus    1,580  607 1,141 1,640  
Czech 
Republic 3,166 3,924 4,465   36,962 43,836 55,645 68,216 
Denmark        55,975  
Estonia     2,963 3,533 4,108  
Finland 49,433 49,947 54,457 44 ,559 26,501 30,033  43,882 
France    193,087 292,532 315,267 353,519 445,356 
Germany 567,464 644,225 714,106 689,122 288,947 338,483 387,072  
Greece 949 1,380 3,721 4,933      
Hong Kong, 
China     134,309 158,242 179,471 180,019 
Hungary 2,856 3,166  3,516 28,066 32,563 47,534  
Ireland     22,146 32,777 41,936  
Israel 2,073 2,785   919 987   
Italy  26,413 29,225 124,450 183,940 198,638 228,085 262,777 
Japan 643,680 706,511 719,223  78,098 82,113 84,851  
Latvia   211 422 5,470 6,744 9,130 12,803 
Lithuania     4,114 4,501 6,329  
Netherlands     134,288 153,758  221,634 
Norway     42,979 49,751 54,823 65,161 
Poland     46,742 55,444 66,104  
Portugal 7,670 10,322 10,733 12, 609 28,768 35,671 35,800 43,332 
Romania     13,406 16,526 28,083 55,702 
Slovak Rep.  743 886 1,368 11,515 12,774 13,999 20,675 
Slovenia     5,519  7,588  
Spain      143,681 171,897 203,588 
Sweden    8,328 76,893 90,928 100,589 114,778 
United 
Kingdom     526,471 612,811 603,376  
United States  979,443 1,138,399 1,238,822 1,413,239  871,943 933,753 1,019,562 1,040,348 
United States  a 221,565 228,765 232,589 272,738 298,172 158,751 171,814 194,328 198,855  S/C/W/326 
 Page 11 
 
 
   
23. Although foreign direct investment (FDI) statistics do not provide a measure of the supply of 
services through mode 3, they can be considered  an important complement to FATS, as a rough 
indicator of the extent to which economies rely on commercial presence abroad to supply services.  
Data in Annex (Table A-2) highlight the importance of the wholesale trade and retailing sector as a destination for foreign direct investment in many economies.  For such countries as Australia, 
Paraguay, or the United States, it accounts for more th an one-quarter of the total inward FDI stock in 
the services sector.  The sector also accounts for a particularly high share of Japan's and Korea's 
outward FDI stock, among others. 
24. As regards franchising, a limited number of economies report BOP statistics on "franchising 
and similar rights", which captures franchising fees as well as receipts/payments for the use of registered trademarks.  Yet, this BOP category is  not limited to franchising in relation to wholesale 
trade and retailing, but extends to all sectors.  The data highlight that, in the case of the United States, 
receipts largely exceed payments, while the opposite is  true for such others as Canada, Australia, or 
Korea (Table 5).  For the United States, credits am ounted to US$16.9 billion in 2008, which, by way 
of comparison, was superior to US exports (BOP ) of computer services (US$12.6 billion).  Cross-
border franchising is also important for European  countries, both between EU Member States and 
externally (US$13.3 billion in exports in 2008). 
Table 5:  Receipts and payments for franchising and similar rights (BOP basis, 2006-2009)  
(US$ Million) 
 
Member 2006 2007 2008 2009 
 Receipts Payments Receipts Payments Receipts Payments Receipts Payments 
Albania 0.5 4.7 5.3 8.3 38.9 8.1 5.5 10.9 
Australia 33.4 425.6 34.9 600.9 26.1 677.1   
Canada 289.2 2,077.4 230.7 2,483.3 209.2 2,518.8   
Guatemala 7.9 60.2 10.8 72.1 11.9 62.2 11.6 92.7 
Dominica         
EU  19,035.8 17,573.5 23,592.8 20 ,915.3 31,025.3 25,440.9   
Extra EU-27 9,745.5 11,193 12,848.2 13,014.8 13,349.5 19,906.5   
Hong Kong, China 1 58 2 75     
Jamaica 11.9 0.8 14.9 46.8 16.4 46.8    
Korea, Rep. of 315.3 800.5 280.8 961.9 301.3 1,000.8 493 981.6 
Morocco     0.1 1.5   
Panama  42.6  47.2  37.6   
Paraguay  1.5  0.6  1  0.9 
Philippines 6 349 5 385  382 2 421 
United States 13,653 2,132 15,660 2,442 16,924 2,594   
 
Source :  IMF Balance of Payment Statistics . 
  
B. ECONOMIC OVERVIEW  
25. For all WTO Members, the distribution sector accounts for a significant part of economic 
activity.  For the vast majority, the contribution to gross value-added ranges between 10 and 20 per cent (see Table A-3).  In many economies, dist ribution is only second to  manufacturing in its 
economic weight, and ahead of such other sector s as agriculture, mining, financial services or 
transportation.   S/C/W/326 
Page 12  
 
  26. The sector's contribution to domestic employment is usually even greater, reflecting its 
relatively high labour-intensity (see Table A-4).  Retailing naturally accounts for a much larger share of total employment than wholesale trade.   
27. Retail sales have experienced strong real gr owth between 2004 and 2008, but declined in 
most economies in 2009 as a result of the economic downturn.  Global sales of retail enterprises stood 
at US$13.5 trillion in 2009, a decline of 2.6 per cen t from the previous year (0.4 per cent in real 
terms).
 16  Drops in retail sales were even sharper in th e United States (-4.6 per cent in real terms in 
2009 and -1.3 per cent in 2008) and in Europe, especially East and Central Europe (-4.5 per cent in 2009 for the region).  Before this setback, global sales of retail firms had grown steadily, with an 
average real percentage change of 2.8 per cent  between 2000 and 2008.  Deve loped countries account 
for the greatest share, but the share of developi ng countries has been rising fast, from 28 per cent in 
2000 to 38 per cent in 2009, in line with the rise of disposable incomes, due in good part to China's and some others' stronger growth rates.
17   
28. Globally, the United States is the largest reta il market (US$2,615 billion in 2009), followed 
by Japan (US$1,095 billion), China (US$925 billion), France (US$515 billion), and Germany 
(US$504 billion).  Other large developing country  markets include Russia (ranking 10 with US$235 
billion), India (11 with US$202 billion), Brazil ( 12 with US$189 billion), and Mexico (13 with 
US$139 billion).  In terms of retail sales per cap ita, developed economies naturally rank highest, 
starting with Switzerland (US$11,466 in 2009).18   
V. EVOLUTION OF THE SECTOR:  KEY CHARACTERISTICS AND TRENDS  
A. HORIZONTAL CONCENTRATION AND VERTICAL INTEGRATION  
29. A key trend in retailing is the increasing concentration of groups, so as to achieve economies 
of scale and scope, especially in the food sector.  C onsumers with growing inco me levels have sought 
greater product variety and, to meet such demand wh ile maintaining low costs, retailers have become 
"lean but large".19  Dealing with the variations of demand across many different products has created a 
push for greater inventories.  To sustain these, gr eater sales were needed, wh ich in turn encouraged 
concentration.   
30. Running large inventories being very costly and risky, distributors have resorted to 
information and communication technologies (ICT) a nd new management and organizational systems 
to improve inventory control and otherwise manage  relations with suppliers.  A closer look at 
                                                      
16 Retail sales provide a general picture of certain trends in the sector (e.g. growth, market share), but 
are not a proper proxy of retailing services since sales figure include the value of goods sold.  The focus is on 
retail because adding data for wholesal e, which also covers the value of  goods sold, would naturally create 
important overlaps.  Data on retail sales are taken from the Economist Intelligence Unit (http://data.eiu.com/), 
accessed September 2010.  'Global sale s' means sales of the following 60 economies, which, together, account 
for the preponderant share of world sales: Algeria, Arge ntina, Australia, Austria, Azerbaijan, Belgium, Brazil, 
Bulgaria, Canada, Chile, China, Colombia, Czech Rep ublic, Denmark, Ecuador, Egypt, Finland, France, 
Germany, Greece, Hong Kong China, Hungary, India, Indonesia, Iran, Ir eland, Israel, Italy,  Japan, Kazakhstan, 
Korea, Malaysia, Mexico, Netherlands, New Zealand, Nigeria, Norway, Pakistan, Peru, Philippines, Poland, 
Portugal, Romania, Russia, Saudi Arabia, Singapore, Slovak Rep., South Africa, Spain, Sri Lanka, Sweden, 
Switzerland, Chinese Taipei, Thailand , Turkey, Ukraine, United Kingdom, Un ited States, Venezuela, and Viet 
Nam.    
17 Economist Intelligence Unit:  http://data.eiu.com/ 
18 Euromonitor (2010), p. 31. 
19 Nordås et al. (2007), p. 8.  Th e average number of different items carried by supermarkets in the 
United States was of 46,755 in 2008, almost eight times more than in 1960. Food Marketing Institute:  
http://www.fmi .org/facts_figs/?fuseaction=superfact  S/C/W/326 
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  European retailers between 1995-2004 supports the claims that labour productivity increases with 
firm size.20  Various studies have found that concentra tion in various markets has increased over 
time.21   
31. Concentration enables retailers to counter the market power of large producers.  They have 
done this by setting up central purchasing units, which negotiate more effectiv ely with suppliers, and 
distribution centres, which rather than simply stor ing goods, sort product arri vals and facilitate their 
dispersal to the various outlets.  In turn, the sear ch for economies of scale in distribution markets has 
also led the food and merchandise sectors to look for gr eater efficiency through consolidation so as to 
retain their negotiating power.  Efforts by manuf acturers to control distribution themselves and the 
large retailers' extension upstream have reduced th e role of traditional wholesalers.  Retailers or 
manufacturers in a number of countries, while taki ng over certain tasks performed by wholesalers, 
have tended to outsource certain wholesaling activiti es to logistics services suppliers.  Nevertheless, 
the role of some forms of wholesaling has remain ed strong, for example specialist operators or 
wholesalers in traditional areas of raw materials and bulk products, in particular imported ones.   
32. Another important characteristic of the sector is vertical integration, which takes a variety of 
forms.  Retailers, in particular, have come to pl ay a greater role in the supply chain by setting product 
standards and by gathering information about consum ers' tastes and behaviour.  As a result, for a 
number of consumer goods, the retailer leads the supply chain, which responds quickly to changes in consumer behaviour.  In the context of such "lean retailing", retailers will often procure goods directly 
from manufacturers, either abroad or at home.
22  For producers, this can lead to improved quality 
standards, foster innovation, and also assist in securing access to large re tail markets, including 
foreign ones.  Greater recourse to central purchasing units by large retailers has permitted them to 
reap the benefits of globalization, by procuring lo w-cost goods from anywhere in the world.  Indeed, 
their larger size has made it easier for retailers  to procure goods directly from abroad, reducing, inter 
alia, contract enforcement risks, search costs, and standard-related frictions.23  A recent study 
suggests that US imports from developing countries have increased dispropor tionately in retail sub-
sectors that are more consolidated into chains.  Th e important growth of large retailers in the US 
between 1997 and 2002 was associated with one-third  of overall growth in consumer goods imports.24   
33. Retailers' upstream expansion has benefited from their investments in ICTs and logistics to 
render the supply chain more efficient.  This of ten goes beyond online purchases, from e-invoicing to 
more advanced forms of information sharing betw een retailers and manufacturers, e.g. electronic 
point-of-sale data collection, to increase synchroni sation of supply and demand.  Organizational and 
technological developments aim at greater on- demand production and just-in-time delivery of 
products, by reducing storage costs, cutting inventor y levels and transport costs, and increasing the 
speed of product flows.25  Information technologies have permitte d to collect and organize the large 
amounts of information necessary for the proper f unctioning of the supply chain from production and 
                                                      
20 Nordås et al. (2 007), p. 18.   
21 For example, Roy (2008) estimated the level of concentration within the modern grocery distribution 
segment by assessing the top five suppliers' share of gr ocery sales across 89 countries.  The average share of 
these top five has gone from 28 to 35 per cent between 1999 and 2005. In the European Union, the eight biggest companies accounted for between 50 and 80 per cent of the national grocery re tail market in the 15 most mature 
markets in 2008 (EC (2010a), p. 9). 
22 Nordås et al.  (2007);  Reardon et al. (2003). 
23 Direct importing is mostly done by large retailers, a number of which have their own buying offices 
abroad.  See Raff and Schmitt (2009);  Nordås et al. (2007), p. 18.   
24 Basker and Van (2010).  Also, Basker and Van (2006) estimated that Walmart alone accounted for 
over 15 per cent of US imports of consumer goods from China. 
25 EC (2010a);  Kumar (2008).   S/C/W/326 
Page 14  
 
  transport to in-store management.
26  The increasing importance of efficient supply chains in 
distribution services has also provided opportunities fo r other operators, since logistics functions can 
be outsourced to independent companies.   
34. In the grocery segment, vertical integration driven  by retailers is reflected in the development 
of private labels, which essentially consist of retailers contracting ma nufacturers "to produce goods 
that are sold under the retailers' bra nd name or as a white label product".27  Such labels are a lower 
price alternative to brand-name products.  The driving force behind their growth has been the 
consolidation of supermarket networ ks.  Private labels also give the retailer more leverage vis-à-vis 
branded goods manufacturers, even though they still rely on known brands to attract consumers.  
These labels could facilitate entry into the internatio nal market for those producers of labour intensive 
consumer goods in developing c ountries that have sufficient scale and capacity to comply with 
retailers' standards.28  
35. Access to developing country markets has become increasingly dependent on entering into 
global production networks, whether the supply chai n leaders are retailers or manufacturers.  
Although hard to assess, an increasing share of worl d trade now takes place through such chains.  
Driven by both greater concentration and competition in retail markets of developed countries, they 
carry competitive pressures across borders and producti on/distribution stages.  Closer links to such 
supply chains (particularly in the agri-food sector) presuppose that producers adapt to new quality and 
safety standards and methods of production. 
36. Globally, modernization of the distribution sector  has naturally reduced, over time, the market 
share of the traditional, "mom & pop", shops.  This process is more recent in developing countries, 
which, for the most part, have experienced the ra pid spread of supermarkets and other forms of 
'modern' retailing.  The process began in Latin Amer ica in the early 1990s, followed by South Asia a 
few years later. 29    
37. Continued high shares of small re tailers may be attributable to entry barriers as well as such 
other factors as lower levels of urbanisation or pop ulation density.  In that context, the number of 
grocery retail outlets per million habitants va ries greatly among WTO Members, from 16,427 in 
Thailand, 14,163 in Egypt, 10,858 in Indonesia, and 10,211 in India, to 963 in the United States, 1,313 in Germany and 1,222 in South Africa.
30  The proportion of sales that are accounted for by 
small shops varies accordingly.  The share of hype rmarkets, supermarkets and discounters in grocery 
retailers' total sales reached 2.9 per cent in India, 10.2 per cent in Egypt, and 21.4 in Thailand, as 
                                                      
26 For example, ICT represented close to 30 per cent of total investment in the retail sector in Finland 
and Sweden in 2005 (EC (2009), p. 76).  ICT also serves to manage relations with consumers, e.g. after sales 
information and home delivery. 
27 EC (2010a), p. 11 
28 Nordås et al. (2007).  Markets w ith large sales of private labels tend to be more concentrated.  The 
expansion of hard discounters, which focus on private labels and a limited product range, has contributed to the phenomenon.  In developing countries, the arrival of private labels is related to the establishment of 
multinational retailers.  Sales of private label products  has been growing at a great er pace than brand products 
recently:  13 per cent global growth in  2008.  Private labels have an importa nt share in developed country retail 
markets, e.g. 46 per cent in Switzerla nd, 44 in the United Kingdom, 17 in the United States or 14 in Australia in 
2008.  In developing countries, private labels account for between 5 and 10 per cent of sales in Turkey, 
Argentina, Chile, Mexico, Brazil and Hong Kong, China.
28  Product categories where private labels are most 
important are paper, plastics and wraps, and refrigerated and frozen food.  Euromonitor (2008). 
29 Traill (2006);  Reardon et al. (2004);  Dries, L. et al. (2004). Research suggests that the level of 
supermarket penetration is positively related to GDP per capita, GDP growth, the level of urbanisation, and 
openness to foreign direct investment. 
30 Euromonitor (2010), p. 35.  S/C/W/326 
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  compared to 68.3 per cent in the United States, 74.1 per cent in Switzerland and 54.6 per cent in South 
Africa.31  
B. INTERNATIONALIZATION AND THE GLOBAL MARKET   
38. Internationalization of the distribution sector is growing in importance, but is not yet as 
pronounced as in other important service sectors (e.g . financial services, telecommunications).  All 
top 50 retailers are from developed economies, most ly of American, Japanese and European origin.  
Walmart is by far the largest supplier worldwide, w ith three times the total retail sales of its biggest 
rival and greater than the second, third, fourth larg est retailers combined.  As shown in Table 6, the 
top 20 global retailers include representatives of vari ous distribution formats, for example discounters 
such as Germany's Schwarz Group (Lidl) and Aldi, as well as others that operate largely in the cash & 
carry or warehouse segment (Metro or Costco), c onvenience stores (7-Eleven (Seven & I Holdings)), 
or drugstores (Walgreen;  CVS).  Also, an exclus ively on-line retailer like Amazon has made it into 
the top 50.   
Table 6:  Top 20 global retailers, 2008 
 
Rank Name of Company Country of origin 2008 Retail Sales 
(US$ million) Number of 
countries of 
operation 
1 Wal-Mart Stores, Inc. USA 401,244 15 
2 Carrefour S.A. France 127,958 36 
3 Metro Ag Germany 99,004 32 
4 Tesco plc UK 96,210 13 
5 Schwartz Unternehmens Treuhand KG Germany 79,924 24 
6 The Kroger Company USA 76,000 1 
7 Home Depot, Inc. USA 71,288 7 
8 Costco Wholesale Corp. USA 70,977 8 
9 Aldi GmbH & Company oHG Germany 66,063 18 
10 Target Corp. USA 62,884 1 
11 Rewe-Zentral AG Germany 61,549 14 
12 Walgreen Company USA 59,034 3 
13 Groupe Auchan S.A. France 56,831 12 
14 Seven & I Holdings Company Japan 54,113 4 
15 CVS Caremark Corp. USA 48,990 1 
16 Lowe's Companies Inc. USA 48,230 2 
17 Aeon Company, Ltd. Japan 47,975 10 
18 Centres Distributeurs E. Leclerc France 47,567 6 
19 Edeka Zentrale AG & Company KG Germany 47,389 1 
20 Sears Holding Corp. USA 46,770 5 
 
Note:  for some companies, total retail sales may include some results from non-retail operations.   
Source:  Deloitte (2010). 
 
 
39. The top global retailers predominantly se ll food and fast-moving consumer goods (e.g. 
supermarkets, hypermarkets).  Ot hers are more specialized.  For example, some distribute mainly 
home improvement products (e.g. Home Depot, ranking 7), electronics (e.g. Best Buy, 21), furniture 
(Ikea, 30), fashion (Inditex, 54;  Gap, 55), or toys (Toys "R" Us, 62).   
40. Out of the world's top 250 retailers in 2008, 32 came from developing countries, up from 20 
in 2005.  Of these 32, five are from China, four each from South Africa and Mexico, and three each 
                                                      
31 Euromonitor (2010). S/C/W/326 
Page 16  
 
  from Chile and Brazil.  Even though no developing country company forms part of the top 50 world 
retailers, they have experienced the most dynamic growth.  Twenty-one deve loping country suppliers 
figure in the 50 suppliers that have seen their sales grow at the fastest pace between 2003 and 2008;  
six developing country suppliers figure in the ten fastest growing.
32   
41. Another key trend in the sector has been the growing internationali zation of distribution 
groups.  In retailing, internationalization has been dr iven by both slow growth in mature markets and 
new opportunities in emerging economies, whose retaili ng sectors have grown much faster due to apid 
income growth, e.g. China.  Firms tend to go abroad after the domestic market has achieved a 
relatively high degree of saturation and concentration.   
42. The top 250 retailers conducted operations in 6.9 countries on average in 2008, up 
from 5.9 countries in 2005 and five countries in 2000.  A good share of the top retailers (100 of the 
top 250, and four of the top 20) are single-country  operators, while 50 operated in more than ten 
countries.  Foreign operations accounted for 22.9 pe r cent of total retail sales of the top 250 retailers 
in 2008, up from 14 per cent in 2005 and 12.6 per cent in 2000.  Among the top 250 retailers, those 
who tend to be more internationalized have seen hi gher returns on sales than those who stuck to their 
traditional and adjacent markets.  Returns on sales fo r those that operated in more than ten countries 
was double that of those operating exclusively on their home territory in 2008.33   
43. Not all retailers find overseas expansion equall y important for growth.  European retailers 
operated in an average of 12 countries, including in  other EU Member States, with foreign operations 
accounting for over 40 per cent of sales for French and German retailers.34  In contrast, many US 
retailers are able to show sizeable rates of growth while staying within borders , due in part to the size 
of that market;  only 13.4 per cent of total sales of the largest North American retailers took place 
outside their home country in 2008 (see Table 7).    
44. While Mexican or Chinese retailers tend to centre their operations at home, the top three 
South African retailers (Shoprite, Pick 'n Pay, Massmart35) are highly internationalized as they 
operate, on average, in 12 countries, mostly on the continent. Other distributors from developing 
countries, even if of smaller size, have expanded in  neighbouring territories in Latin America, Africa 
and Asia, for example Chile's Cencosud which is presen t in four foreign markets.  This trend is likely 
to continue, as various developing countries have  an expanding middle-class that can support the 
operations of large domestic retaile rs.  Further, a number of distributors from developing countries 
enjoy a significant position in their domestic market, even after the entry of large developed-country 
firms, e.g. in Chile, Mexico and China.  
                                                      
32 Out of the top 250 retailers listed in Deloitte (2010).  The top 50 fastest growing suppliers in terms of 
turnover had a compound annual growth rate of 25 per cent during that period, more than three times the rate of 
the top 250 global retailers as a whole (Deloitte 2010, p.  G29).  For a number of these companies, mergers and 
acquisitions played an important role in expanding sales.  For example, the Chilean retailer Cencosud acquired 
in 2007 the largest retailer in Peru (Wong superm arkets) as well as GBarbosa, a Brazilian retailer. 
33 Deloitte (2010). 
34 Deloitte (2010).  On the basis of the sample of the top 250 retailers for 2008.   
35 In September 2010, Walmart made an offer to acquire Massmart.  S/C/W/326 
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  Table 7:  Internationalization of top 250 retailers, by region, 2008 
 
 Number of 
Companies Average  
retail sales  
(US$ ml) Average number 
of countries a 
  % Retail sales 
from foreign 
operations 
  
Top 250 250 15,275 6.9 b 22.9 
Africa/Middle East 6 4,864 7.5 8.2 
Asia/Pacific 45 9,798 3.4 11.9 
 Japan 31 9,134 2.6 8.5 
Europe 96 16,872 11.7 b 36.2 
 France 13 31,532 21.8 41.0 
 Germany 19 23,988 14.6 42.6 
 U.K. 18 15,591 11.8 21.5 
Latin America 10 6,327 1.8 13.1 
North America 93 17,911 4.3 b 13.4 
 U.S. 84 18,736 4.6 b 13.3 
 
Note: a Average number of countries in whic h the top retailers have operations;  b Excluding Richemont (Switzerland) and 
Dell (US), whose near-global coverage would skew the average. 
Source:  Deloitte (2010), p. G22. 
 
 45. Many of the top retailers ha ve targeted large emerging economy markets whose growing 
number of middle-class consumers, as well as deve lopment potential for modern distribution formats, 
present considerable opportunities.  Retailers' expansi on into China, for example, is a case in point; 
apart from American and European distributors (e .g. Walmart and Carrefour opened 52 and 22 new 
stores, respectively, in 2009), retailers from Japa n, Malaysia, Thailand, or Chinese Taipei have 
ventured in that market.
36  China is also proving to be a producer of choice for retailers, both to serve 
foreign retailers established there, as well as tho se abroad.  Walmart claims to have established 
partnerships with nearly 20,000 suppliers in Chin a, and to source locally over 95 per cent of the 
merchandise in its stores in China.37  
46. Overall, foreign presence in retail markets h as been increasing in recent years.  A study 
looking at grocery retail sales by modern grocery distribution formats in 89 countries between 1999 and 2005 estimated that the average market share of foreign suppliers  grew from 10 to 16 per cent.  
Such growth took place both in OECD countri es (from 21 to 26 per cent) and non-OECD countries 
(from 4 to 10 per cent) across most regions.  The la rgest increases occurred in Central and Eastern 
Europe, where significant reforms had earlier been u ndertaken as part of the move towards a market 
economy, as well as in Latin America.
38  On the whole, the market shar e of foreign suppliers is still 
relatively low.   
C. E-D ISTRIBUTION  
47. The sale through the Internet of goods that are subsequently shipped to  consumers has grown 
in importance over the years, even if traditional sa les of "brick and mortar" stores have remained 
dominant overall.  Still, among the top global retaile rs, some like Amazon (no. 44) and Dell (no. 75) 
have all their retail activities online.  And an in creasing number of wholesalers and retailers develop 
                                                      
36 A.T. Kearney (2010); Wang (2009). 
37 http://www.wal-martchina.com/english/walmart/index.htm  
38 Roy (2008). Planet Retail defines modern grocery distribution formats as retail formats 
predominantly selling food, such as hypermarkets, supe rstores, supermarkets, discount stores, convenience 
stores, drugstores, and modern wholesal e formats.  It excludes specialist fo od outlets (e.g. butchers, bakers) and 
open markets. S/C/W/326 
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  e-commerce strategies to comple ment their traditional sales.  Among the top 100 global retailers, on-
line sales amounted to 6.6 of total sales.  Such sales were least important for retailers of fast-moving 
consumer goods, which sold less than 1 per cent through e-commerce (for the top 100 that have 
reported separately on-line sales).
39     
48. Globally, online sales are estimated at US$134.9 billion.40  Their expansion has been driven 
by the rise of the Internet, especially in devel oped economies where the number of users has risen 
more than 5 fold since the late 1990s.  According to  Euromonitor, in 2009, online sales of consumer 
goods by non-store retailers were highest in th e United States (US$90.7 billion), followed by Japan 
(US$31.6 billion) and the United Kingdom (US$28.1 billion).41  Such sales have grown rapidly in 
many markets between 2004 and 2009, for example, almost six-fold in Br azil and three-fold in 
China.42 Advantages of online retailing for consumers are that it widens choice and awareness of 
commercial opportunities, thus increasing the co mpetitive pressure on traditional retailers.   
49. Aside from the above, comparable statistics at a global level on distribution services by 
electronic means are scarce.  National experien ces suggest dynamic growth, even if purchases of 
goods on the Internet still account for a small part of  overall retail sales.  In the United States, online 
retail sales have grown on average by 20 per cent pe r year between 2000 and 2007;  the online share 
of total retail sales climbed from 0. 6 per cent in 1999 to 4 per cent in 2009.43  Wholesalers in the 
United States rely much more heavily on e-co mmerce (sales of US$1262 billion in 2008) than 
retailers (US$142 billion), suggesting that onlin e sales are much more important in business-to-
business dealings than in business-to-consumer ones.44    
50. In Canada, 13.4 million online orders were ma de by over 2.2 million households in 2001.  By 
2007, 70 million orders by 8. 4 individuals were processed.45  In the EU, the proportion of individuals 
that had purchased products through the Internet had risen significantly be tween 2004 and 2008, from 
22 to 34 per cent.46  As between non-EU countries, there is mu ch variation across Member States, e.g. 
the proportion of Internet buyers is over 50 per cent in the United Kingdom, the Netherlands, 
Denmark or Germany, but only 3 and 4 per cent, respectively, in Bulgaria and Romania.  In the EU, 
the Internet was the second most commonly used  retail channel, being more popular than, for 
example, mail order, door-to-door sales, and telesales.47  In India, non-store retailers' Internet sales 
                                                      
39 Deloitte (2010), p. G31 
40 According to www.internetretailer.com.  An important aspect to keep in mind is that data on e-
commerce or online sales referred to in this sub-section of ten go beyond the range of distribution services in the 
W/120 to include not only the online sale of goods, bu t also that of hotel accommodation, passenger transport, 
etc.  Nevertheless, sales of goods still account fo r a substantial part of total online sales.   
41 Euromonitor (2010), p. 46.  Such data only capture on-line sales of consumer goods by non-store 
retailers, i.e., retailers selling from locations other than  retail outlets.  It therefore excludes important on-line 
sales on the part of those brick-and-mortar stores.  It can be noted that, in the United States, non-store retailers' home shopping sales (e.g. mail order catalogue, TV shopping) were higher ($109.9 billion) in 2009 than internet 
retail sales.   
42 Euromonitor (2010).  Growth in absolute sales numbers.   
43 www.internetretailer.com (accessed 27 September 2010) and  USITC (2010), p. 6-7 and 6-8.  US 
data counts the online sale of both goods and services.  USITC (2010), p. 6-7 and 6-8.  Data on online share is 
from 4th quarter 1999 to 2nd quarter 2009.   
44 US Census Bureau, E-Stats:  www.census.gov/estats 
45 McKeown and Brocca  (2009). 
46 EC (2009), p. 5.  For the EU-25.   
47 EC (2009), p. 6.    S/C/W/326 
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  went from 3,613 million Rs in 2004 to 26,288 million Rs in 2009.48  In China, e-commerce sales in 
the second quarter of 2009 reached US$8.3 billion,  almost twice the previous year's level.49   
51. The growing attraction of e-commerce is also reflected in the rise of the so-called C2C model, 
where individuals sell merchandise through on- line platforms, ranging from classified ads, 
marketplace, or auction sites (e.g. E-Bay).    
52. While the Internet has given consumers th e means to easily procure merchandise from 
retailers established abroad, such cross-border sales have been relatively limited so far;  the gap 
between domestic and international online sales is im portant.  For example, in the European Union, 
33 per cent of consumers bought products on-line in 2008, but only 7 per cent bought from another 
country, including from within the Union.  Further,  while 51 per cent of retailers in the EU were 
selling through the Internet, only 21 per cent conducted cross-border transactions.50  Not surprisingly, 
inhabitants of smaller EU countries tend to reso rt more frequently to cross-border online shopping 
(e.g. Luxembourg, Denmark, Ireland, Malta).  Reasons put forward to e xplain limited cross-border     
e-retailing in the EU also appear of relevance for other regions (e.g. limited access to Internet, 
preference for direct inspection of the good and for information beyond what is available on the 
Internet, concerns about payment security).  More over, there may be other issues coming into play 
from the perspective of consumers, such as language  problems, lesser trust of the supplier, or 
reluctance linked to after-sales support (e.g. retu rning goods or obtaining repairs) or, from the 
perspective of the supplier, risk of non-payment, higher delivery costs, problems of compliance with 
different national fiscal legislations, or higher costs linked to language differe nces or to provision of 
an efficient cross-border after-sale service.51 
D. DIVERSIFICATION AND EXPANSION STRATEGIES  
53. Retailers employ various strategies to ente r foreign markets.  The entry route through 
acquisition is sometimes preferred to the establis hment of new facilities so as to get around local 
restrictions or other impediments.  Joint ve ntures are also used, as well as strategic alliances 
(sometimes with real estate developers) and franc hises (e.g. Carrefour's franchised operations in a 
number of Gulf and North African countries).  Larg er retailers also tend to operate a number of 
different store formats – from hyperm arkets to supermarkets  of different sizes, discount stores, cash & 
carry, or even convenience stores – and sometimes under different fasciae.  For example, in China, Western retailers have tended to prefer the "big box" format to take advantage of their important 
resources, while Japanese retailers focused on depart ment stores, supermarkets and convenience store 
formats.
52  In India, FDI restrictions on multi-brand reta iling have led foreign retailers to focus on the 
cash & carry format, where 100 per cent foreign capita l participation is perm itted, and enter into 
alliances with local retailers. 
54. Franchising is an important mode of entry for international retailers in many countries since it 
allows the firm to expand without necessarily inves ting own capital and, thus, enter a foreign market 
despite local restrictions in relation to foreign capital participation.  Franchises have grown rapidly, in 
number and economic importance.  For example,  according to the International Franchise 
Association, franchised businesses operated close to 1 million establishments in the United States and 
                                                      
48 Euromonitor (2010). 
49 Reuters, "E-Commerce is Getting Chinese to Loosen their Purse Strings", New York Times , 24 
September 2009. 
50 EC (2009). 
51 EC (2009); OECD (2009).  On example of intern ational efforts to tackle  challenges of consumer 
protection brought about by Internet sales is the OECD's 1999 Guidelines for Consumer Protection in the Context of Electronic Commerce. 
52 Wang (2009). S/C/W/326 
Page 20  
 
  provided around 10 million jobs.
53  In the United States, franchises represent more than 10 per cent of 
all businesses that have employees; and more than 400 US franchise systems operate internationally.54  
In Australia, the number of business franchisors jumped from 850 to 1100 between 2004 and 2008;  
business units operating in franchise format totalled 71,400, and employed 40 0,000 persons in 2008.  
More than one-quarter of Australian based franchisors were operating internationally.55   
55. Franchising has also been growing very rapidly in developing countries, where the 
phenomenon is more recent.  In some cases, this repr esents the extension to l ess saturated markets of a 
significant way of doing business for certain retailers  (e.g. The Body Shop, Benetton).  It also serves 
to share risk in new business environments.56  Advantages for the franch isee may include: reduction 
of business risks;  the benefits of a well-establis hed trademark (e.g. public recognition;  access to 
standardized formats, products and services);  assist ance with marketing, training, customer relations, 
accounting, etc.; retaining ownership and a degree of management and control over the establishment.   
56. Direct selling represents another important way to enter foreign markets for certain 
enterprises and types of products.57  The largest markets for dir ect sales are the United States 
(US$24.3 billion in 2009), Japan (US$19.8 billi on), Brazil (US$8.1 billion), and China (US$10.2 
billion).58 
VI. LIBERALIZATION AND BARRIERS TO TRADE59 
A. BARRIERS TO TRADE  
57. Distributors rely most heavily on the freedom to establish a commercial presence.  The 
economically most significant barriers encountered ar e thus limitations on foreign capital participation 
or on the number of licenses granted to foreign supp liers, as well as the application of economic needs 
tests in this context, in particular for large outle ts (e.g. with such criteria as the impact on existing 
distributors), and requirements to form joint-ventur es with local suppliers.  Some countries also limit 
the number of foreign outlets in certain geographical areas.  These barriers tend to be much more common for retailing than for wholesale trade.  It is notable that many of the measures that affect the 
distribution sector are implemented by local govern ments and municipalities, which have a powerful 
influence on the authorization of new stores and the conditions of operation.
  
58. Other barriers in the sector involve discrimination against franchises or direct selling as 
opposed to other forms of business;  limitations on the provision of various related or subordinated 
services, such as discriminatory restrictions on the use of terminals and warehouses or on the capacity to engage in promotional activities or marketing;  discriminatory taxes and subsidies;  discriminatory 
limitations on the purchase or rental of specific assets such as real estate and land (which are not 
specific to the distribution sector, but have a str ong impact given the importance of outlet size and 
location);  and citizenship/residency requirements.  In some cases, requirements are also imposed in 
                                                     
 
53 These numbers are not limited to franchises in the sector of retailing and wh olesale trade.  Sectors 
where franchising account for the greatest share of sales are,  in order, restaurants, lodging, and grocery retailing  
(www.franchise.org). 
54 "Franchises Play Vital Role in U.S. Economy", www.buisnessnewsdaily.com, 15 September 2010. 
See also www.franchise.org. 
55 Frazer, Weaven, and Wright (2008).   
56 Welsh, Alon, and Falbe (2006). 
57 Avon, Amway or Tupperware are examples of suppliers relying on direct selling.   
58 Euromonitor (2010), p. 46.  Data is for direct selling retail sales by non-store retailers. 
59 The terms "barriers to trade" or "trade restrictions " are used here to refer generally to measures that 
may negatively affect trade, and not to  depict solely limitations on mark et access or national treatment as per 
Articles XVI and XVII  of the GATS.    S/C/W/326 
 Page 21 
 
 
  relation to the domestic sourcing of products or the marketing of domestically produced goods.60  
Further, various countries grant exclusive rights or  allocate a limited number of licences for the trade 
and/or distribution of certain products (often agri culture goods).  This can make it more difficult for 
producers to implement comprehensive export strate gies, e.g. in terms of export promotion and 
establishing alliances and networks to ga in access to external markets.   
59. Given its high labour intensity, the sector tends to  be particularly affected by restrictions on 
the temporary movement of natural persons.  For example, nationality or residency requirements for 
managers can disadvantage foreign suppliers.  With  respect to mode 1, limitations include such 
measures as discriminatory taxation of goods delivered  by mail, requirements of commercial presence 
or other discrimination against companies not estab lished in the country that sell products through the 
Internet.   
60. In addition, the distribution sector, especially retailing, is affected by a wide range of 
regulations that may not constitute market access or  national treatment limitations.    These include 
non-transparent zoning and urban planning practices,  measures restricting the capacity to offer 
discounts, burdensome regulation of telephone and electronic media marketing, prohibitions on the 
offering by service providers of incentives, rewa rds, and other promotional programmes, long 
approval procedures for the opening of large outlets , and restrictive shop opening hours.  In many 
countries, such measures, when too burdensome, can significantly inhibit competition, mainly by 
making entry of new suppliers more difficult and protecting incumbents. 
61. Trade in distribution services is also affected by restrictions in other service sectors on which 
retailers and wholesalers rely, such as transport, logis tics or financial services, as well as by barriers in 
non-services areas.  Just as liberalization of trade in goods has facilitated the growth of trade in 
distribution services, the persistence of certain ba rriers to trade in goods (e.g. complex customs 
clearance services) tend to have a negative effect on distribution.  Furthermore, just as the increased 
protection of intellectual property rights has be nefited retailers and franchisers who rely on 
trademarks or brand names, weaknesses in such protection may have adverse effects.61  Moreover, as 
noted in S/C/W/37, several competition policy-relate d concerns arise in the distribution sector, which 
can inhibit entry and competitive conditions.   
62. A recent study compiled, from public sources, barriers to trade in distribution services 
from 77 countries over the period 2000-200762.  Relatively higher levels of  restrictions were found to 
exist in a number of Asian economies, for exampl e India and certain ASEAN members.  A number of 
countries from the Gulf Cooperation Council also have  restrictions, often in relation to wholesale 
trade.  Some African countries have relatively high leve ls of restrictions – e.g. Egypt, Tunisia –, while 
Latin American countries generally have relatively fe wer restrictions, with some important exceptions 
(e.g. Panama, which has restrictions on FDI in retailing).63  Not surprisingly, the level of 
restrictiveness was found to correlate negatively w ith the degree of concentration in the modern 
grocery distribution segment as well as to the de gree of supermarket penetration (measured by 
supermarkets' shares of the retail food market).64  A World Bank study focusing on the supply of 
retailing services through commercial presence in 102 coun tries, also finds that restrictions are, on 
                                                      
60 Such requirements might be challenged under the GATT.   
61 S/C/W/37. 
62 Roy (2008).  The study focused on those barriers more relevant to GATS Articles XVI and XVII.  
Some of the economies reviewed  may have since liberalized. 
63 Overall, these are consistent with other studies on distribution covering certain developing countries; 
see Kalijiran (2000). 
64 Roy (2008), p. 245. S/C/W/326 
Page 22  
 
  average, much higher in Asia, the Middle-East and Africa than in OECD countries (see Chart 1 
below).
65   
 
Figure 1:  Restrictiveness of services trade policy for the retail sect or (commercial presence), 
     by region  
 
 Note:  Total of 102 countries.  GCC:  Gulf Cooperation Counc il;  EAP:  East Asia & Paci fic;  SAR:  South Asia;  
AFR:  Sub-Saharan Africa;  MENA:  Middle East & North Africa;  LAC:  Latin America & Caribbean;  OECD:  
high income OECD;  ECA:  Europe & Central Asia. 
 Source :  Borchert, Gootiiz and Mattoo (forthcoming). 
 
 
63. The relatively more restrictive developing coun tries tended to use foreign equity limitations 
or joint venture requirements, although in a nu mber of cases these are not applied solely to the 
distribution sector.  A number of de veloping countries phased out such measures, fully or in part, as a 
result of their WTO accession.  Various economies also impose nationality or foreign equity requirements on firms involved in importing.
66 
64. Developed countries, in contrast, tend to use non-discriminatory measures more frequently.  
For example, a number of European countries have rest rictions in relation to large stores.  In France, 
the Raffarin Law of 1996 made the opening of stores over 6000m2 subject to special investigations.  
Only a few new hypermarkets were opened si nce the second half of the 1990s.  In 2008, the Loi de 
modernisation de l'économie  (LME) provided that new retail outlets above 1000m2 have to seek 
                                                      
65 Figures shown represent the ‘services trade restri ctiveness index’ (STRI), which ranges from 0 to 
100, with values increasing with restrictiveness.  The da ta, which are preliminary and subject to correction, form 
part of the World Bank's Services Policy Restrictiveness Database, which is currently under construction.  It is 
to be made publicly available by the end of 2010: http://econ.worldbank.org/programs/trade/services. 
66 See, for example, WTO (2005), WT/TPR/S/150, p. 23-24. 0 8 9.7222530 31 45
World Average
World Bank Services Trade Restrictiveness Index ECA  OECD  LAC  MENA  AFR  SAR  EAP  GCC   S/C/W/326 
 Page 23 
 
 
  planning permits from department-level commi ssions, which comprise local politicians, businesses 
and other representatives.67  
65. Still, the distribution sector appears, overall, to be  subject to less restrictions than a number of 
other service sectors.  With regard to FDI-relate d barriers, this seems to be the case for both 
developing and developed economi es, according to Golub (2009).68  This research also shows, with 
respect to OECD countries, that FDI restrictions in the sector have diminished gradually between 
1981 and 2005.69   
B. IMPACT OF LIBERALIZATION  
66. The benefits of the liberalization of distributio n services are significant in view of the sector's 
strong economic linkages, although there are of course adjustments.  Liberalization is expected to 
improve efficiency, yield economies of scale, and pr ovide consumers with better prices, quality, and 
choice.  Exposure to competition stimulates local suppliers to upgrade their production methods and 
standards, the organization of their supply chains , and their use of technology.  Local producers can 
also resort to newly created international supply chains to increase their own exports.   
67. For example, research by the OECD Secretar iat suggests that the wholesale and retail sector 
strongly contributed to productivity growth in OECD  countries over the recent period.  The degree of 
product market regulations (e.g. foreign investment restrictions but also restrictions on shop opening 
hours) was inversely related to labour productivity growth.70  Other studies show that much of the 
overall US-EU gap in productivity growth in the la te 1990s can be explaine d by developments in 
retailing and wholesale trade, due in part to these industries' use of information and communication 
technologies.71   Further, productivity growth in the sector was not at the expense of lower 
employment.72  Recent studies have found that more restri ctive policies in retailing had an adverse 
effect on employment levels in the sector.73  Others have identified a negative relationship between 
retail restrictions and both prod uctivity levels and the incorporation of information technologies.74  
Looking at retail policies in different regions of Sp ain, a recent research finds evidence that greater 
restrictions are associated with higher inflation and lower employment in the sector.75  By the same 
token, assessments of the impact of regulatory re forms in distribution services have also found 
significant benefits overall.  Japan's liberalization of is regulations on large-scale stores was found to 
have "resulted in higher labour productivity, lo wer prices and higher retail employment, arguably 
boosting" the GDP by 1 per cent.76 
68. Further, a study of 18 economies (both deve loped and developing) suggests that trade 
restrictions have a significant and negative eff ect on the price-cost margin of distributors.  
Discriminatory measures in the four most restricted  economies included in the sample raised costs of 
                                                      
67 Such permissions had in the past been required for sales areas above 300m2.  See Høj and Wise 
(2006);  Economist Intelligence Unit (2010), "Industry Report: Consumer  Goods and Retail, France", July, 
pp. 12-13.   
68 The restrictiveness index for distribution services across 73 economies amounted to 0.19, while the 
average for all services sectors was 0.25.  The sc ore for communications, for example, was 0.33.   
69 The restrictiveness index for 23 OECD countries went from 0.23 in 1981 to 0.14 in 2005.   
70 OECD (2005), pp. 25-27;  Wölfl (2005);  Boylaud (2000).   
71 Van Ark, Inklaar and McGuckin (2002). 
72 Wölfl (2005), pp. 32-33. 
73 See Viviano (2008) for Italy and  Bert rand and Kramarz (2002) for France. 
74 Schivardi and Viviano (2008). 
75 De los Llanos Matea and Mora-Sanguinetti (2009).  Hoffmaister (2006) also finds that retail 
restrictions in Spain have translated into higher prices.  
76 OECD (2005), p. 27;  Høj. J. and M. Wise (2004).    S/C/W/326 
Page 24  
 
  firms operating in these markets by between 5 and 8 per cent.
77  More recent research on liberalization 
in China, Japan and Korea highlights that benef its common to the three countries included:  the 
expansion of more efficient forms of retailing (e.g . new formats) and increased competition, which led 
to enhanced benefits for consumers through lowe r prices, better service and wider product choice.78   
69. A number of recent studies have also underscored the impact that restrictions on distribution 
services have on international trade in goods.  Working with a sample of 22 OECD countries, 
Francois and Wooton (2005) found that reduced competition in the domestic trade and distribution 
sectors served as an effective import barrier for goods , that market access benefits of tariff reductions 
might be overestimated in cases of imperfect co mpetition in distribution, and that GATS-based 
services liberalization might boost goods trade as we ll.  For example, according to the authors, 
moving France (which has a number of restrictions  in these sectors) to the most competitive services 
level among the OECD countries studied, would be comparable to the elimination of a 8.4 per cent tariff.  Other research underscores the significant welfare costs imposed by inefficient distribution 
services.  For example, it has been suggested th at a 10 per cent reduction in Japan's final goods 
distribution margins would benefit cons umers as much as worldwide free trade.
79   
70. Recent studies also find that internationalizati on in the retail sector stimulated trade in 
consumer goods.  The commercial presence of a retaile r abroad is associated – from the point of the 
view of the retailer's home country – with about 20 per cent higher imports of food and beverages and 
17 per cent higher imports of other consumer goods .  In other words, opening up to foreign 
investment in retailing can have a positive impact on the host country's expor ts of consumer goods, as 
local producers that work with foreign re tailers grow and become more competitive.80  Focusing on 
the impact of European retailers’ supply chains  on small farmers, a group of researchers found 
evidence that small farmers in Madagascar that par ticipate in the supply chain by exporting vegetables 
to European grocery retailers achieved greater revenu es and more income stability.  Participation in 
the supply chain also led to improved technol ogy adoption, better resource management, and 
productivity spillover effects on other crops.81   
71. While liberalization carries benefits, the economic  weight of the distribution sector, including 
for employment, especially in retailing, also me ans that governments need to address adjustment 
issues.82  Naturally, the slower the pacing of liberaliza tion, the lesser the adjustments, but also the 
lesser the benefits.  Proper regulatory measures may assist in facilitating the process.  Adequate 
competition law, aiming to ensure a level playing field and protect consum ers is important, although 
this is the case even before market opening to fore ign suppliers begins.  Governments can also take a 
number of actions to facilitate adjustment resulting from the entry and expansion of modern retailers.  
Suppliers providing goods to these retailers will ha ve to meet new standards, and may benefit from 
training or advice from experts in this area.  Th e government can assist them in meeting these new 
challenges by ensuring, for example, that it is not preventing them from responding to these new competitive pressures through restrictions in relation to agriculture production. 
72. Assistance can involve helping suppliers to  upgrade, for example through provision of 
information on supermarket procur ement standards and, more gene rally, information on relevant 
market trends.  Governments can also provide or f acilitate access to training, e.g. on new management 
                                                     
 
77 Kalirajan (2000) . 
78 Kim et al. (2003).    
79 Bradford (2005);  Bradford and Gohin (2006). 
80 Nordås et al. (2007 );  Nordås (2008). 
81 Minten, Randrianarison and Swinne n (2009).  Participation in th e supply chain takes place through 
micro-contracts.  About 10,000 farmers in Madagascar produce vegetables for European supermarkets.  Micro-
contracts are combined with farm assistance and supervis ion programmes to ensure that retailers’ strict quality 
and phyto-sanitary standards are met.   
82 Arkell (2010).  S/C/W/326 
 Page 25 
 
 
  techniques;  encourage consolidati on of smaller suppliers (creation of  associations or groups of small 
suppliers);  provide credit facilities for investment and modernization – the threshold investments to enter modern channels are usually much higher th an for traditional channels ;  and gradually upgrade 
public standards towards more demanding private st andards.  Donor-funded organizations may assist 
in this task.  Encouraging traditional retailers to upgrade could also be achieved by limiting the 
pressure these may face from the underground economy.  Upgrade and investments for producers to 
be able to serve modern retail cha nnels are similar to those needed fo r exporting.  Actions can also be 
taken to upgrade wholesale markets so that they be tter serve retailers and farmers.  Improving the 
functioning of wholesalers can be important to the whole traditional supply chain, in particular traditional retailers and farmers.  The entry of m odern cash-and-carry chains (e.g. in China, India) 
have helped supply sma ll retailers, as well as i ndependent supermarkets.
83   
73. Further, so as to facilitate retailer-supplier relations, a number of c ountries have developed 
codes of good practice – often non-binding or  a mix of self-regulatory and legal-regulatory 
approaches – to govern buyer-supplier relationships and help prevent and resolve conflicts.  Such 
codes may become more relevant when large-stores start to get a significant share of the market and 
exert influence.  Argentina was among the first de veloping countries to develop such code, in the 
early 2000s.  It was essentially drawn up by retailers  and suppliers, out of fear that the government 
might elaborate and impose one.  The code draws on elements of the US Perishable Agricultural Commodities Act (PACA).  Similar approaches have been followed in Colombia and Mexico.  Main 
elements, which tend to be similar across countries,  relate to compliance with contracts by both 
retailers and suppliers, equal tr eatment among suppliers, prompt pa yment, cooperation in logistics 
development.  The codes also have conflict resolution mechanisms.   
74. Franchising can also be an important way to foster competition and diversity in the retail 
market.  It can provide new business opportunities for individual owners.  In that regard, the adoption 
of franchise law – e.g. dealing with mandato ry disclosure of information – as well as 
trademark/copyright law is important so as to pr otect rights of franchisors and franchisees.     
C. S
OME EXPERIENCES WITH REFORMS AND POLICY TRENDS IN INDIVIDUAL COUNTRIES 84 
75. Despite the barriers to trade that may persist in the sector, a number of countries, including 
developing economies, have undertaken significant liberalization of distribution services in recent 
times.  In certain cases, the reforms appear to have been encouraged by trade agreements and 
international negotiations.  At the same time , certain governments have recently experienced 
pressures to increase barriers.   
76. From the end of the 1990s, Japan has gradually  liberalized a number of domestic measures 
affecting the retail sector, in particular with respec t to the establishment of large stores.  Introduced in 
the 1970s to protect small retailers, the Large- Scale Retail Store Law required government approval 
for establishing or expanding stores over 500m2.  Approval hinged on an analysis of supply and 
demand, in particular the effect on existing smaller retailers.  Licences needed to be approved by the 
Ministry of International Trade and Industry (MITI) and the local government, as well as by local 
groups of retailers.  The restrictions on large st ores were gradually reduced during the 1990s.  For 
example, the time period for establishing a large stor e was shortened, restrictions on opening hours for 
large stores were relaxed, and notification requi rements abolished.  The Law was effectively 
rescinded in 2001 and replaced by the Large Scale Retail Store Location Law, which regulates the 
building and operations of stores over 1,000m2, but focuses on regulating the environmental impact 
(e.g. traffic, noise, waste management).85  While the number of shops has declined, modifications to 
                                                      
83 Joseph et al. (2010);  Arkell (2010). 
84 This draws in part from Roy (2008), pp. 245-51.   
85 Itoh and Shimoi, " Japan " in Kim et al. (2003);  OECD (1993).   S/C/W/326 
Page 26  
 
  the Law are also associated with an increase in the number of employees, in the sales floor area of 
shops, and total sales in the sector.
86  Research also suggests benefits in terms of increased 
competitiveness and, for consumers, better prices, choice and services.87   
77. The Republic of Korea has also undertaken refo rms in the sector.  Foreign involvement in 
wholesale trade and retailing started in 1981 when fore ign suppliers were allowed to establish certain 
stores with a 330m2 floor space limit.  Later steps included admitting foreign retailers with less than 
ten stores and 1000m2 of floor space in 1991, and then with less than 20 stores and 3000m2 in 1993.  
In conjunction with the end of the Uruguay Roun d negotiations, the government announced that these 
restrictions would be lifted by 1996.88  As with Japan, liberalization in  Korea is seen to have brought 
positive effects such as increases in efficiency a nd productivity, wider consumer choice and decrease 
in prices, although there were also downsides de pending on the perspective taken, such as the 
crowding out of smaller traditional distributors.  Re forms have shifted some of manufacturers' power 
into the hands of distributors, which have gain ed greater influence on price determination.  
Liberalization also induced the entry of different  types of operators (e.g. discounters, home-shopping 
retailers) and this enhanced price competition.89  More recently, however, according to press reports, 
the Parliament has been considering a number of measures in light of complaints by small shop 
owners.90       
78. In Zambia, liberalization of distribution services le d to the entry of modern retailers, such as 
South Africa's Shoprite and Spar.  At first, local producers found it difficult to meet the requirements of supplying modern retailers, and the new foreig n entrants imported a large share of the fresh 
produce it sold in Zambia.  With technical assistance from donor-funded organizations, farmers 
cooperatives have adapted and integrated the mode rn value chains.  Shopr ite, which had imported 90 
per cent of its fresh produce from South Africa when it arrived in 1995, now sources 90 to 95 per cent from local farmers.
91 
79. In India, modern retail chains are estimated to account only for about 5 per cent of total 
sales.92  Some steps towards greater liberalization ha ve been taken in recent years, although most 
restrictions remain.  In 2006, the government d ecided to permit wholly-owned foreign ownership in 
cash & carry wholesale trade under the automatic route,  and to allow single-brand retailers (e.g. Louis 
Vuitton or Nokia shops) to own up to 51 per cent of their operations.  The latter had previously been 
permitted to enter the market through franchise agr eements only.  Foreign investment in multi-brand 
retailing is still not permitted.  One entry route fo r foreign suppliers is to set up wholesale joint-
ventures, which supply the local partner's retail activit ies.  Walmart has been the first to enter in such 
                                                      
86 Still, in comparison to other developed economies, small outlets continue to play a dominant role in 
Japan. Economist Intelligence Unit (2010), Industry  Report:  Consumer Goods and Retail", August. 
87 Itoh and Shimoi, " Japan " in Kim et al. (2003);  Odagiri an d Riethmuller (2000);  Høj and Wise 
(2004);  Economist Intelligence Unit (2010), Industry  Report:  Consumer Goods and Retail", August. 
88 Kim and Moon, "Korea" in Kim et al. (2003);  Sternquist and Jin (1998)  Baek, Jones and Wise 
(2004).   
89 Ibid. 
90 For example, a draft bill would require retail ch ains to seek special permission from local 
government before opening a store of 1000-3000 sq. meters (so-called super-supermarkets) within 500 meters of 
a traditional market.   Another draft bill would allow small shop owners to demand the temporary suspension of 
large retailers' operations if they could prove that these were hurting their business. Financial Times , "Seoul 
looks to curb super-supermarkets", 6 October 2010;  Planet Retail:  www.planetretail.net;  The Korea Herald , 
"Nation Split over Super-Supermarket Dispute", 26 October 2010;  The Korea Herald,  "Regulating "Super 
Supermarkets Falters Due to Partisan Conflict",  26 October 2010. 
91 Mattoo and Payton (2007), pp. 22-23. 
92 Economist Intelligence Unit (2010), Industry Repor t:  Consumer Goods and Retail, India, May.    S/C/W/326 
 Page 27 
 
 
  way by partnering with local Bharti Enterprises.  Retailing operations rema in totally domestically-
owned, with Walmart providing logistics, storag e and procurement for a chain of Bharti stores.93   
80. A comprehensive study on the impact of organized retailing on different segments of the 
Indian economy found that low-income consumers ga ined most from the presence of organized retail 
outlets, and that farmers be nefit considerably more from sales dir ectly to organized retailers than from 
selling through intermediaries or government-regulated  markets.  Both organized and unorganized 
retail are expected to continue to grow in coming years, as this was not a zero sum game. 94   
81. A number of studies have highlighted important wastage across the agricultural supply chain 
in India, which is highly fragmented and lacks an integrated cold-chain infrastructure.  One study 
estimated the annual total loss in the agricultural supply chain to Rs. 1,000 billion, 57 per cent of 
which was attributable to avoidable wastage and the rest to avoidable costs of storage and 
commissions.  Another study suggests that 25 to 30 per cent of fruits and vegetables and 5 to 7 per 
cent of food grains are wasted.95  The weakness of the supply chain is linked to the weak export 
competitiveness of India's horticulture products, as well as to lower prices received by farmers for their production than would otherwise be the case.
96 An important benefit from further development 
of modern retailing in India would therefore flow from the boost to supply chain effectiveness in the 
agricultural sector through reduction of intermediari es and attracting of investments across the value 
chain, e.g. promoting centralized warehousing and distribution centres, transport and cold storage.97   
82. In certain other developing countries, recent tr ends seem to favour the perpetuation or even 
tightening of certain restrictions.  In Thailand, for example, retail trade has been liberalized gradually 
since the late 1980s, but a number of measures have been introduced recently with respect to large 
store expansion.  The Town Planning Law and the Building Control Law have been used to control 
the expansion and limit the construc tion of new retail stores.  These laws provide that large retail 
stores (more than 1,000 sq. meters) have to be located at least 15 kilometres from the commercial 
centres of provincial towns.  The laws also apply to all provinces outside of Bangkok.  In 2006, the 
Government requested major retailers to voluntar ily freeze their expansion plans while a retail law 
was being prepared.  In 2007, the Government endorsed a draft Retail and Wholesale Business Law 
aimed at regulating the expansion of retail stores.  It foresaw that local governments would assess and 
approve any proposed new retail stores in their provin ce.  In addition, the draft law set the criteria for 
establishing new stores, such as zoning, distance between stores, size of sales area, and land use.98   
83. Malaysia has also tightened certain policies re lating to distribution services, in particular 
hypermarkets, apparently out of concerns about thei r impact on smaller outlets.  In addition to foreign 
equity restrictions, the authorities adopted, in 2004,  new rules that limit opera tions of hypermarkets.  
Later revised, these rules provide, among other th ings, that one hypermarket (5000 sq. meters or 
more) is allowed for every 250,000 residents, that  such stores are not allowed to operate within a 
                                                      
93 The Economist, "Setting Up Shop in India", Nove mber 4, 2006;  Planet Retail, "Wal-Mart beats 
Tesco into India", 27 November 2006;  Economist In telligence Unit (2010), Industry Report:  Consumer Goods 
and Retail, India, May.   
94 Joseph et al. (2008).    
95 Referred to in India Ministry  of Commerce and Industry (2010). 
96 Ibid;   Mattoo, Mishra and Narain (2007). 
97 PriceWaterhouseCoopers and Confederation of Indian Industry (2005);  Joseph et al. (2008). 
98 WTO (2008);  WTO (2002);  Economist Intelligen ce Unit (2010), "Industry Report: Consumer goods 
and Retail, Thailand", May.  The draft has been revised in recent years, but has not yet been passed into law.  Later drafts provided that the centr al committee chaired by the Commerce Minister would be empowered to 
approve the expansion or opening of modern stores (above 120 sq meters), in light of comments from provincial 
committees: Bangkok Post , "Retail Act Faces More Revisions", 18 November 2009;  The China Post , 
"Thailand's Plan of Ushering in Retail Law Caught in Limbo", 20 April 2010;  Bangkok Post , "Retail Law 
Called 'Too Late'", 23 December 2009. S/C/W/326 
Page 28  
 
  radius of 3.5 km of residential areas and town cen tres, and that an impact study be conducted on 
existing local retailers before c onsideration of new hypermarket ope nings.  Foreign participation is 
not permitted in such formats as supermarkets (les s than 3000 sq meters).  Further, hypermarkets, 
department stores and superstores must reserve at least 30 per cent of each outlet's shelf-space for products of Bumiputera -owned (local) SMEs.
99  
 
_______________ 
                                                      
99 See the Guidelines on Foreign Participation in the Distributive Trade Services on the website of the 
Ministry of Domestic Trade & Consumer Affairs (http://www.kpdnkk.gov.my/download/Guidelines%20On%20Foreign%20Participation%20In%20The%20Distr
ibutive%20Trade%20Services%20(Amendment)%202010.p df);  Economist Intelligence Unit (2010), Industry 
Report:  Consumer goods and retail, Malaysia, June.  According to Malaysia's last Trade Policy Review, the 
measure reserving 30 per cent of shelve-space to local products was under review by the Government (WTO 
(2010), p. 69).    S/C/W/326 
 Page 29 
 
 
   
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   S/C/W/326
 Page 33ANNEX 
 
Table A-1:  Products Excluded from Commitments on Wholesale and Retail Trade 
 
Member Exclusion from Wholesale Trade Exclusion from Retail Trade 
Australia Agricultural raw materials and li ve animals (6221), food, beverages and 
tobacco (6222) Motor vehicles (6111), parts and acce ssories of motor vehicles (6113), 
motorcycles and snowmobiles and related parts and accessories (6121), 
pharmaceutical, medical and or thopaedic goods (63211) 
Austria Pyrotechnical goods, ignitable items  and exploding devices, firearms, ammuniti on and military equipm ent, tobacco and to bacco products, pharmaceutical 
products, medical and surgical devices, toxic substances, certain medical substances and objects for medical use 
Brazil Solid, liquid and gaseous fuels and related products (62271)  Motor vehicles (6111), parts and accessories of motor vehic les (6113), 
motorcycles and snowmobiles and re lated parts and accessories (6121) 
Tobacco and tobacco products ( 62213, 62228), alcoho lic beverages (part of 62226);  pharmaceutical, medi cal and orthopaedic good s (part of 6225);  
weapons, munitions and military equipment;  precious metals, precious stones and articles thereof (part of 62265);  petroleum a nd petroleum products Bulgaria 
Grain, oilseeds and oleaginous fruits , seeds and animal feed (62211);  
intermediate products other than agricultural, waste and scrap and materials 
for recycling (6227) 
Services supplied at commodity exch ange markets operated on a permanent 
basis Beverages not consumed on the spot (63107) 
Cambodia All, except radio and television equipment, musical instruments and records, 
music scores and tapes (62244) Pharmaceutical goods, medical and orthopaedic goods (63211) 
Canada Agriculture and live animals in 6221;  fisheries products in 62224;  
alcoholic beverages in 62226;  musical scores, audio and video recordings in 
62244;  and books, magazines, newspapers, journals, periodicals and other 
printed matter in 62262;  and 6225 1 of pharmaceutical and medical goods 
and 62252, surgical and orthopaedic instruments and devices Liquor, wine and beer sales in 63107;  music scores, audio and video 
records and tapes in 63234;  books, magazines, newspapers and periodicals 
in 63253;  and pharmaceutical, medial and orthopaedic goods in 63211 and 
printed music in 63251 
Cape Verde Tobacco;  precious metals for use by the national bank;  pharmaceuticals;  
produced in Cape Verde for a period of three years after accession and;  
fuel.  
China  Salt and Tobacco  Tobacco 
Czech Republic Arms, ammunition, explosives, some chemical products, and drugs and precious metals 
Arms, chemical products, explosives and precious metals EC-12 
 Pharmaceutical, medical and orthopaedic goods (63211) 
Finland Arms, alcoholic bevera ges and pharmaceutical products 
Iceland  Arms, alcoholic beverages, tobacco  and pharmaceutical products  
  S/C/W/326 
Page 34 Member Exclusion from Wholesale Trade Exclusion from Retail Trade 
Japan Petroleum, petroleum products, rice, tobacco, salt, alcoholic beverages, and those supplied  at Public Wholesale Market -  i.e. a market established under 
national or local government approval for commission agents' services and wholesale trade services of fresh foods including veg etables, fruits, marine 
products, meats and other daily foods, and flowers, with auctio n or bidding hall, parking lot and other facilities necessary fo r trade and disposal of above 
goods, which is operated  on a permanent basis. 
Jordan Firearms and phar maceuticals Pharmaceuticals 
Firearms, explosives and swords;  works of art and antiques;  and the establishment and operation of, and distribution services  at the public wholesale 
markets for agricultural, fishery and livestock products, which ar e officially designated by the local authorities as public wh olesale markets. Korea, Rep. of 
Grain in 62211, raw milk in 62222, meat, poultry and game (62223), red 
ginseng and farinaceous products in 62229, and fertilizers in 62276 Dairy products and eggs (63102), meat (incl. poultry) and meat products 
(63103), bread and flour confectionery (63105), sugar confectionery 
(63106), beverages not consumed on the spot  (63107), tobacco products 
(63108), animal feed, livestock and other animals in 63295 
Kyrgyz Republic Alcoholic beverage s, tobacco, firearms, pharmaceuticals.  Alcoholic beverages and tobacco. 
Liechtenstein Goods subject to import authorization, pharmaceuti cal products, toxics, explosives , weapons and ammunition, and p recious metals 
Mexico Petroleum-based fuels, coal, firearms, cartridges and ammunition (622), 
motor vehicles (6111), part and acces sories of motor vehicles (6113) Sales in specialized establishments of combustible liquid gas, charcoal, coal 
and other non-petroleum based fuels, paraffin and fuel, gasoline and diesel, firearms, cartridges and tractoline ammunition. 
New Zealand Agricultural raw materials and live animals (6221), food, beverages and 
tobacco (6222), and such services relating to wool and animal hair (2613 – 
2615) Retail sales of motor fuel (613) 
Norway Alcohol, arms, pharmaceuti cal, fish and grain Pharmaceutical  products, alcohol and arms 
Peru Waste and scrap and materials for r ecycling (62278), machinery, equipment 
and supplies (6228) Non food products (632), motor vehi cles (6111), part and accessories of 
motor vehicles (6113), motor cycles an d snow mobiles and related parts and 
accessories (6121) 
Poland Beverages (62226), tobacco produc ts (62228), pharmaceutical and medical 
goods (62251), surgical and orthopaedic instruments and devices (62252) Beverages not consumed on the spot  (63107), tobacco products (63108), 
pharmaceutical, medical and orthopaedic  goods (63211), motor vehicles 
(6111), part and accessories of motor vehicles (6113), motor cycles and 
snow mobiles and related pa rts and accessories (6121) 
Romania Arms, ammunition, explosives, narco tics and medicines containing narcotics, to bacco products and paper for cigarettes, alcohol and spirits 
Senegal  Motor vehicles (6111), part and accessories of motor vehicles (6113), motor 
cycles and snow mobiles and related parts and accessories (6121) 
Slovak Rep. Arms, ammunition, explosives, some chemical products and drugs and precious metals 
Pyrotechnical goods, ignitable articles and blasting devices, firearms, ammunition and military equipment, toxic substances and  certain medical substances Slovenia 
Motor vehicles (61111) Ph armaceutical, medical and orthopaedic goods (63211) 
Sweden Trade in arms and retail sale of al coholic beverages and pharmaceutical products 
Switzerland Goods subject to  import authorization, pharm aceutical products, toxics, 
explosives, weapons and ammunition, and precious metals  Goods subject to import authorization, pharmaceu tical products, toxics, 
explosives, weapons and ammunition, and precious metals  
   S/C/W/326
 Page 35Member Exclusion from Wholesale Trade Exclusion from Retail Trade 
Chinese Taipei  Firearms and military equipment  
Tonga  Motor vehicles (61112), parts and accessories of vehicles (6113), 
motorcycles and snowmobiles and re lated parts and acce ssories (6121). 
United States Firearms and military  equipment Alcoholic beverages, firearms and military equipment 
Viet Nam Cigarettes and cigars, books, newspapers and magazines,  video records on whatever medium, precious metals and stones, pharmaceutical products and 
drugs, explosives, processed oil and crude oil, rice, cane and beet sugar. 
Note:  This updates Table 8 from S/C/W/37 by adding the acceding Me mbers concerned.  Exclusions are determined on the basis of the definition of wholesale trade and retailing services in the 
Services Sectoral Cla ssification List (W/120). 
 
 
 S/C/W/326 
Page 36   
  Table A-2:   Inward and Outward FDI Stock in  Distribution Services and Share in Total FDI 
  and Services FDI, 2008 
  (US$ million) 
Member FDI stock Inward Outward 
Albania* Wholesale and retail trade 71  
 % of services FDI 4.8  
 % of total FDI 4.1  
Argentina Wholesale and retail trade 3,423  
 % of services FDI 17.1  
 % of total FDI 4.3  
Armenia Wholesale and retail trade 55  
 % of services FDI 3.2  
 % of total FDI 1.6  
Australia Wholesale and retail trade 39,565 5,805 
 % of total services FDI 32.3  
 % of total FDI 14.5 3 
Bangladesh* Wholesale and retail trade 3  
 % of services FDI 0.2  
 % of total FDI 0.1  
Botswana* Wholesale and retail trade 24  
 % of services FDI 6.1  
 % of total FDI 2.5  
Brazil Wholesale and retail trade  1,796 
 % of services FDI  2.5 
 % of services FDI  1.5 
Cambodia Wholesale and retail trade 4  
 % of services FDI 0.2  
 % of total FDI 0.1  
Chile Wholesale and retail trade 1,587  
 % of services FDI 7.4  
 % of total FDI 2.3  
China* Wholesale and retail trade  20,233 
 % of services FDI  22.5 
 % of total FDI  17.2 
Croatia* Wholesale and retail trade 2,096 43 
 % of services FDI 7.2 4.6 
 % of total FDI 5.3 1.3 
El Salvador Wholesale and retail trade 412  
 % of services FDI 12.2  
 % of total FDI 6.1  
European Union Wholesale and reta il trade 11,101,427 12,542,579 
(EU-27) % of total services FDIa 7.8 5.8 
 % of total FDIa 6.2 4.4 
Extra EU-27 Wholesale and retail trade 3,546,981 4,764,942 
 % of total services FDIa 7.6 5.7 
 % of total FDIa 6.1 4  S/C/W/326 
 Page 37 
 
 
  Member FDI stock Inward Outward 
FYROM* Wholesale and retail trade 389  
 % of services FDI 20.3  
 % of total FDI 10.4  
Hong Kong, China Wholesale and retail trade 89,517 66,667 
 % of services FDI 11.4 9.4 
 % of total FDI 10.9 8.7 
Iceland Wholesale and retail trade 185 1,442 
 % of total services FDI 3 31.1 
 % of total FDI 2 16.3 
Israel* Wholesale and retail trade 1,935 742 
 % of services FDI 15.3 4.9 
 % of total FDI 3.3 1.6 
Japan Wholesale and retail trade 11,940 98,461 
 % of total services FDI 10.1 33.6 
 % of total FDI 5.9 14.5 
Korea, Rep. of Wholesale and retail trade  18,144 
 % of total services FDI  44 
 % of total FDI  18.4 
Macao, China Wholesale and retail trade 369  
 % of services FDI 3.6  
 % of total FDI 3.3  
Morocco Wholesale and retail trade 119 22 
 % of services FDI 0.5 1.6 
 % of total FDI 0.3 1.3 
Madagascar** Wholesale and retail trade 20  
 % of services FDI 10.6  
 % of total FDI 4  
Namibia* Wholesale and retail trade 484  
 % of services FDI 22.9  
 % of total FDI 12.6  
Oman* Wholesale and retail trade  20 
 % of services FDI  2.2 
 % of total FDI  1.3 
Norway Wholesale and retail trade 8,672 4,312 
 % of total services FDI 18.9 9.9 
 % of total FDI 7.9 3.3 
Panama** Wholesale and retail trade 2,552  
 % of services FDI 25.7  
 % of total FDI 20.2  
Paraguay Wholesale and retail trade 414  
 % of services FDI 28.4  
 % of total FDI 19.2  S/C/W/326 
Page 38  
 
   
Member FDI stock Inward Outward 
Peru Wholesale and retail trade 726  
 % of services FDI 8.6  
 % of total FDI 4  
Singapore** Wholesale and retail trade 41,273 9,561 
 % of services FDI 24.9 8.6 
 % of total FDI 17.4 6.5 
South Africa** Wholesale and retail trade 2,320  
 % of services FDI 8.4  
 % of total FDI 2.6  
Switzerland* Wholesale and re tail trade 39,787 21,959 
 % of total services FDI 12.5  
 % of total FDI 10.4 3.2 
Thailand Wholesale and retail trade 5,271 811 
 % of services FDI 21.4 16.5 
 % of total FDI 7 8.9 
Turkey Distribution Services 6,053 1,189 
 % of total services FDI 12.2 15.1 
 % of total FDI 8.5 8.6 
United States  Wholesale and retail trade 356,645 213,406 
 % of total services FDI 27.7 8.6 
 % of total FDI 15.6 6.7 
  
 Note:  * Data from 2007;  ** Data from 2006.  a % on basis of 2007 data.  Data  for distribution services  
 is here for retailing and wholesale trade services, but also includes repair a nd maintenance services.  
 Source :  OECD.Stat and  ITC Investment Maps.  S/C/W/326 
 Page 39 
 
 
  Table A-3:   Share of wholesale a nd retail trade in gross value added 
 
Member % Member % Member % 
Albania** 18.3 Guatemala 14.7 Paraguay** 20.0 
Argentina** 13.8 Honduras 12.2 Peru 16.6 
Armenia 12.2 Hungary** 12.7 Philippines** 17.1 
Australia** 10.8 India** 14.1 Poland** 18.8 
Austria** 12.2 Indonesia** 14.3 Portugal* 12.9 
Bahrain 7.9 Italy** 12.0 Moldova 15.1 
Bangladesh 14.4 Jamaica** 17.9 Romania** 12.4 
Belgium** 13.5 Jordan* 10.6 Saint Kitts and Nevis 10.9 
Belize* 16.9 Kenya** 11.4 Saint Lucia* 10.9 
Bolivia 9.0 Korea, Republic of 8.4 Saint Vincent and the 
Grenadines** 18.9 
Botswana 8.3 Kuwait** 4.7 Senegal** 19.7 
Brazil* 17.0 Kyrgyz Republic 20.3 Sierra Leone** 11.5 
Brunei 
Darussalam** 4.6 Latvia** 22.4 Singapore 17.4 
Bulgaria** 9.7 Lesotho** 12.5 Slovak Republic** 15.6 
Burkina Faso 8.8 Lithuania** 18.4 Slovenia** 11.6 
Cambodia** 9.0 Luxembourg* 8.8 Solomon Islands* 11.7 
Cameroon** 19.1 Malawi** 14.7 Spain** 11.1 
Canada* 12.3 Malaysia** 11.9 Suriname** 13.2 
Colombia** 13.1 Maldives 3.8 Swaziland** 9.8 
Cyprus** 14.4 Mauritania* 11.2 Sweden** 11.8 
Czech Republic** 17.1 Mauritiu s 11.8 Switzerland* 13.0 
Denmark** 12.6 Mexico* 16.8 Tanzania** 14.6 
Dominica* 13.9 Mongolia** 9.6 Thailand 13.9 
Dominican 
Republic 10.0 Morocco** 12.8 Trinidad and Tobago 13.6 
Ecuador** 16.3 Mozambique** 12.0 Turkey 13.6 
El Salvador 18.3 Namibia** 13.2 Uganda 15.1 
Estonia 15.5 Nepal 13.3 Ukraine 14.6 
Finland 11.1 Netherlands 15.3 United Arab Emirates 12.4 
France 10.3 New Zealand 25.3 United States 15.2 
The former Yugoslav Republic of Macedonia**   16.0 Nicar agua 14.4 Uruguay 12.1 
Gambia 26.0 Niger 15.6 Venezuela 10.5 
Georgia 15.8 Nigeria 17.3 Viet Nam 16.4 
Germany 10.6 Norway 18.8 Zambia 16.9 
Greece 15.2 Oman 11.4   
Grenada 8.5 Panama 15.2   
Note:  Data for 2008 unless indicated otherwise.   *2006    **2007  Includes repair services 
Source :  National Accounts Official Country Da ta, United Nations Statistics Division S/C/W/326 
Page 40  
 
  Table A-4:  Employment in  wholesale and retail trade services  as a share of total employment  
 
Member % Member % Member % 
Albania* 7.3 FYROM 14.2 Nicaragua* 19.6 
Antigua and Barbuda 14.3 Georgia** 9.9 Norway 14.3 
Argentina* 20.1 Germany 13.7 Panama 19.4 
Armenia** 9.8 Greece 18.2 Peru 22.0 
Australia 17.2 Hungary 15.1 Philippines 18.9 
Austria 16.2 Iceland 12.9 Poland 14.7 
Belgium 12.8 Indonesia 16.7 Portugal 14.7 
Bolivia** 14.4 Ireland 14.7 Qatar** 12.3 
Botswana* 14.4 Israel 13.6 Romania 12.6 
Brazil** 18.0 Italy 15.1 Saudi Arabia 15.8 
Bulgaria 15.8 Japan 18.3 Senegal 24.9 
Canada 17.2 Korea, Republic of** 15.7 Singapore 14.6 
China** 4.2 Latvia 16.6 Slovak Rep. 12.3 
Colombia 26.4 Lithuania 18.1 Slovenia 11.8 
Costa Rica 19.3 Macau, Ch ina 12.3 Spain 16.0 
Croatia 15.0 Malaysia 16.2 Sri Lanka 12.9 
Cyprus 18.2 Maldives* 10.6 Sweden 12.2 
Czech Republic 12.7 Malta 15.6 Switzerland 14.9 
Denmark 15.2 Mauritius 14.9 Tanzania 8.8 
Dominican Republic** 20.6 Mexico 22.7 Thailand 14.9 
Ecuador* 28.6 Moldova 15.0 Turkey 16.9 
Egypt** 10.6 Mongolia 16.3 United Arab Emirates 16.3 
Estonia 14.2 Netherlands 14.0 United Kingdom 14.6 
Finland 12.3 New Zealand 17.7 United States 14.2 
France 12.7 
 
Note: Data for 2008 unless indicated otherwise.  *2006    **2007  Includes repair services.    
Source :  Laborsta, ILO Departme nt of Statistics.   
 
__________