International Trade in Services.pdf - DSpace at Khazar University

152 International Trade in Services
Demand stemming from new shopping habits in urban centers is the key
determinant of retail growth among multinationals. Food products are sourced
from low-cost suppliers. If the harvesting, grading, and dispatching work is labor
intensive, powerful retail buyers exercise great purchasing power that depresses
the prices producers can charge and thus producer income levels. This may occur
even in developed countries, where growers may have to sell their produce to individual
retailers (Lawrence 2004). Retailers can promote food exports from developing
countries by integrating their producers into international supply chains.
Partnerships among retailers, logistics companies, wholesalers, and processing
companies can establish efficient supply chains. Some retailers enter into partnerships
with nongovernmental organizations, donors, or governments, which then
finance investment in public infrastructure, training, and other essential inputs
(Nordås, Geloso Grosso, and Pinali 2007).
Internationalization may allow consumers to purchase fruits and vegetables all
year round that are consistent in appearance and taste and have a longer shelf life.
The range of food varieties on offer may also be expanded (Lawrence 2004). Food
constitutes a significant proportion of the retail price index, and, so, price competition,
which stabilizes or reduces food prices, can reduce general inflation. However,
any improvement in availability and choice may not extend to the rural population
or, possibly, to some peripheral and poor urban areas. In general, modern
retailing stores improve employment opportunities for women and provide better
working conditions.
Prospects for exports by developing countries
The liberalization of trade in services is sometimes perceived in terms of a North-
South relationship; this perception focuses, on the one hand, on the interests of
capital-abundant multinationals based in developed countries and, on the other
hand, on the concerns in developing countries about foreign domination of local
economies. Some retailers based in developing countries have already expanded
into neighboring markets in Africa, Asia, and Latin America. They will increasingly
do so as part of the worldwide trend toward concentration and larger outlets
in distribution. In view of the rapid growth rates in many developing countries,
South-South trade is gaining ground in the distribution sector.
Export growth can only be achieved by companies with sufficient capital, managerial
expertise, and capacity in information and communication technology to
invest abroad once they have gained strong positions in domestic markets. The
major multinationals in developed countries will only consider markets that offer
sufficient commercial potential and thus do not enter poorer developing countries.
This offers opportunities for South-South investment in retail outlets.