In May 2006, GTIS received a request from the Government of Guyana (GOG)
Ministry of Foreign Trade and International Cooperation (MOFTIC)
requesting technical assistance to “provide focused technical support to
inform and guide the participation of the Government of Guyana in
external negotiations on services.” The activity is undertaken against a
backdrop of Guyana’s active participation in the current external trade
negotiations at the World Trade Organization (WTO), the CARIFORUM-EU
Economic Partnership (EPA) and the CARICOM-Dominican Republic Free Trade
Agreement. GTIS was asked to review the extent to which services could
be liberalized across multiple negotiating theaters according to the
four criteria provided by MOFTIC.
Modern day travel and the internet have revolutionized the way that
business is conducted. It is now easier than ever for the resident of
one country to physically or electronically cross the border into the
jurisdiction of another and consume or produce a service, or establish a
business that supplies services. This revolution in transportation and
communications has led to an increase in services that are bought and
sold across borders. It has also led to the need to think differently
about how services are traded.
During consultations undertaken for this project, it became apparent
that many services providers do not even know that they are in fact
engaged in exporting or importing services.
Trade negotiations are a useful tool to drive development of the
Guyanese services industry further. Presently, there is much confusion
as to what is a services trade and there is limited recognition of the
critical role services plays in the economy. The service sector is
larger than official estimates report at 46% of GDP but these figures do
not capture some of the largest contributors to services such as
business and professional services and ICT. Of all new jobs GoInvest is
attracting 50% are in the services sector although they are not reported
as such.
Trade negotiations in services raise awareness about the importance
of the sector and encourage the development of increased opportunities
for Guyanese services exports. The study has identified challenges which
impede further growth and opportunities for development. A services
development strategy will help attract new foreign investment and
identify opportunities in markets abroad.
Business and professional services, especially legal, accounting,
architectural, engineering and nursing are already actively engaged in
exports and represent the largest share of service providers in terms of
companies operating in the sector. This is a sector with experience and
interest in expanding exports abroad, however, they seek domestic
regulation to overcome some reservations about competing with
non-residents in Guyana.
Computer and Related Services (ICT) and Business Processing
Outsourcing (BPO) services are actively being promoted by the Government
and the industry is identifying opportunities for expansion. Reliable
telecommunication connections at internationally competitive rates are
critical for real growth in this sub-sector.
Some key infrastructure services such as energy, financial services,
transportation and telecommunications are high-priced and
poorly-delivered and these have far-reaching effects on overall economic
performance, including low investment, poor productivity, and
competitiveness challenges. Guyana and GoInvest must seek foreign
investment in the key infrastructure services urgently.
While binding governments to keep their trade policies within agreed
limits, the purpose of trade agreements is to help producers of goods
and services, exporters and importers to conduct business in a
transparent and predictable manner and to have recourse to dispute
settlement if the commitment is not honored. Simply making commitments
in services will not automatically open the flood gates of increased
flow of investment in the services sector. The commitments are simply a
tool to demonstrate that the country is open for international business.
Guyana is already quite open to foreign activity and has few barriers to
market access or national treatment and should make requests and offers
accordingly. Participation in services negotiations should match the de
facto situation of a relatively open economy. Nevertheless, an
investor’s decision will not be solely guided by the degree of
“liberalization” or commitment in the WTO but on other conditions that
are conducive to conducting business in the target country.
The USAID/Guyana Trade and Investment Support (GTIS) project is
actively increasing exports in non-traditional agriculture products,
wood products aquaculture, and tourism hence there are synergies from
these activities that are expected to stimulate additional growth for
these service providers.
As the key agricultural, aquaculture and wood products industries
grow, the demand for ancillary services such as marketing, packaging,
financing and transport services will also grow. In transport, important
maritime and inland waterways upgrades are needed in dredging,
equipment, road transport and warehousing. If the new port is built in
Linden, the entire transport sector is expected to experience growth and
foreign investment will be necessary.
With a view to implementing some the recommendations espoused in the
GTIS report, the Government of Guyana has begun to seek funding to
better capture service data. Furthermore, the Commonwealth Secretariat
is supporting the development of a Strategic Plan for the export
promotion of professional services from Guyana. The aim of the activity
is to build national capacity to facilitate the export of professional
services.
Guyana has been quietly operating with a vibrant and growing services
sector. This report will help inform decision making by government trade
negotiators on possible commitments that can be made in the overall
services sector. The private sector must be engaged to continue to the
next level and match services export interests and capabilities with
trading opportunities abroad. Continuing support to the private sector
will be required in order to meet this objective.
- Guyanese services with high export potential where the focus is
opening trading partner’s markets.
- Guyanese services with
high export potential, but requiring foreign direct investment.
- Non-sensitive
services in Guyana with low export potential or that can be liberalized
in exchange for concessions from trading partners.
- Sensitive services, as per the criteria provided.
2007-3-20 Services Report Part 1 Rev1
2007-3-20 Services Report Part 2
Annex C - Negotiations Framework Tool
Annex D - Mailing List of Services Firms2
2007-3-19 GY Services Presentation Final rev1