Employment Effects of Services Trade Reform

Driven by spectacular technological advances and the emergence and intensification of global value chains (GVCs), trade in services has been the most dynamic part of global trade over recent years. The concurrent rise of services trade provisions in existing and forthcoming trade agreements bears testimony to their relevance in contemporary international policymaking.

At the same time, stalled negotiations on services within the context of the WTO and persistent controversies over services provisions in trade agreements such as the Transatlantic Trade and Investment Partnership (TTIP), the Trade in Services Agreement (TiSA), and other regional trade agreements reflect substantial discord on the desirability of services trade rules and their optimal design in international treaties.

The outcome of these negotiations is critical for employment. Services have been the key driver of job growth in recent years – directly, but also indirectly through their connection with the broader economy. Its share in global employment in 2013 stood at 45%, as opposed to 32% in agriculture and 23% in industry.

Nonetheless, research on the effects of international trade in services on employment remains scarce. While a growing strand of the literature looks at the links between services trade policy, flows, output and productivity, very little is currently known on labor market outcomes.

Against this background, CEP, in collaboration with the World Trade Institute at the University of Bern, the Graduate Institute of International and Development Studies (IHEID), the World Trade Organization and the United Nations Conference on Trade and Development, is hosting a workshop on “Employment Effects of Services Trade Reforms” on 25-27 November in Geneva, Switzerland, to dig deeper into the question of how and to what extent services can benefit from removing barriers to trade and how these benefits can translate into positive employment outcomes.