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Sunday, Nov 24, 2002

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`Trade barriers on services must go'

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WITH the services sector accounting for 49 per cent of the national economy and growing rapidly, its role for the developing countries in the context of the World Trade Organisation (WTO) has brought to light new issues which need to be addressed urgently.

To elicit the views of the industry, the Union Government and the US Administration on the crucial matter and to help structure strategies to find a solution, the Andhra Pradesh branch of the Indo-American Chamber of Commerce (IACC) organised a meeting of people who were involved in the WTO negotiations and others.

According to Mr P.K. Srivastava, Director of the Trade Policy Division of the Department of Commerce, flexibility for developing countries to open fewer sectors for foreign investors and to liberalise fewer types of transactions was provided in the core aspects of the negotiations in view of the wide gaps in development between the rich and poor nations.

As trade in services was different from trade in goods, there should be no control on it through tariff regulations.

He said world trade in commercial services in 2001 amounted to $1.440 trillions and this was one-fourth of the goods trade. While exports from India during that year were worth $20.10 billions, imports by the country were higher at $23.70 billions. The share of India's exports in world trade was 1.4 per cent.

Prof Rupa Chanda of IIM, Bangalore, said that business services in trade especially in software and IT-enabled areas were gaining increasing importance and constraints in their growth were more internal.

There was potential to attract FDI in the education, tourism and entertainment sectors.

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