CEBU CITY – The critical role of services trade in global value chains (GVCs) must be further explored as it can provide potential new sources of growth and jobs for the country and the entire APEC region, according to the National Economic and Development Authority (NEDA).
“We would like to see greater participation of services in various GVCs that will increase productivity and add value to goods produced. In the process, these will create more jobs and make growth more inclusive,” said NEDA Deputy Director-General Emmanuel F. Esguerra, head of the Philippine delegation to the third APEC Senior Officials’ Meeting during the Joint Meeting of the APEC Group on Services and Market Access Group (GOS-MAG) on August 26.
In a paper for the APEC 2015 Research Project, the Philippine Institute of Development Studies explained that “the value chain is the full range of activities that firms and workers perform to bring a product from its conception to end use and beyond…GVCs reflect the fact that activities that constitute a value chain have generally been carried out in inter-firm networks on a global scale.”
“GVCs now account for more than 50 percent of global trade. The significant role of GVCs in international services trade creates a sense of urgency to make the services sector more competitive. So it’s very important for us to do further analytical work in the area,” said Esguerra, who is also the APEC GOS Convenor.
The joint GOS-MAG meeting showcased studies of how select APEC economies opened markets for services in specific sectors to benefit from participation in GVCs.
“This initiative is definitely a progressive move towards creating a better understanding of how our economies can maximize GVC participation and how APEC can create the appropriate policy environment conducive to the growth of services value chains,” said Esguerra.
He also noted the importance of developing innovative services within GVCs and prioritizing services in the development agenda, addressing services and investment restrictions, and achieving balance in regulatory reform, among others.
Last year, the 26th Ministerial Meeting in China adopted the APEC Strategic Blueprint for Promoting Global Value Chains Development and Cooperation as a mechanism to strengthen mutual economic cooperation within the global value chain network.
“We hope to be able to hasten the process of developing innovative services within GVCs in line with the China blueprint. The Philippines can take advantage of the recent enactment of the landmark Competition Act to boost its services value chains and attain a more productive, innovative, and competitive services sector,” Esguerra said.
The Competition Act is seen to attract investments and improve economic activity in the country by prohibiting the abuse of dominant position and leveling the playing field among businesses.
According to Esguerra, GVC-related initiatives along with appropriate legal instruments will contribute to the work on structural reform, which will also be tackled in the upcoming Structural Reform Ministerial Meeting on September 7 and 8, where the services sector is one of the priorities.