International Trade in Services.pdf - DSpace at Khazar University

18 International Trade in Services
Cooperation and the development of opportunities
In some developing countries, certain service sectors are hampered by insufficient
domestic supply capacity, and foreign suppliers may dictate market terms to the
detriment of consumers. For example, the construction service sector in many developing
countries is highly fragmented and is made up of small companies unable to
take on large or even medium-size projects. While these companies tend to supply
international contractors through outsourcing, they may not be able to acquire the
expertiseorsizetheyneedtocompeteforlargecontractsontheirown.Introducing
incentives for cooperation and technology transfers between foreign contractors and
domestic contractors may be an option for strengthening the domestic sector. Similarly,
fostering an environment in which local companies can form consortia and
bid for larger projects allows the homegrown sector to build capacity in markets
associated with cutthroat competition among many small players.
This is common practice in professional services such as accounting, engineering,
and legal services. For example, four accounting alliances dominate the global
market and influence the structure of accounting service provision in many developing
countries. These leaders derive approximately 65 percent of their income
from work outside their home countries and are present in up to 150 countries.
They maintain a partnership model that relies on local members and professionals
to understand the language, rules, and operating procedures of the respective
market. This arrangement helps the local members build on the multinational’s
reputation and take advantage of its training, expertise, IT solutions, and staff
support. Trade is also frequently undertaken through various forms of cooperation
between legal service companies, whereby the companies leverage networked
practices to broaden and deepen their areas of expertise. This type of partnership
can be particularly useful for small and medium-size enterprises that are competing
for business with large companies.
Adoption of international standards, licenses, certificates,
and degree recognition facilitates trade
There are various best practices and international (sometimes regional) standards
available throughout the service life cycle that seek to ensure or, at least,
signal the quality level that a consumer may expect. They cover (1) the requirements
for obtaining a professional qualification, (2) the process employed during
delivery, and (3) the standards of the finished product. Professional service
sectors often seek to maintain minimum standards by issuing quality certifications
to individual service providers. For example, to serve as a registered nurse,
a nursing graduate may be required to pass a licensure examination. An
accountant may serve in certain specified roles only after having passed an