Free Trade Area of the Americas - FTAA


Trade Negotiations

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August 12, 2003

Original: Spanish
Translation: FTAA Secretariat





The Trade Negotiations Committee (TNC), at its Ninth Meeting, held in Managua, Nicaragua, from 26 to 28 September 2001, instructed the Consultative Group on Smaller Economies and the Tripartite Committee to draft a proposal for a Hemispheric Cooperation Program (HCP), taking into account the needs of the countries and the negotiating groups.

This project proposal describes the service-related needs of the member countries of the Andean Community and is consistent with the objectives of the Hemispheric Cooperation Program, which were drawn up by the Consultative Group on Smaller Economies on instruction from the TNC and set forth in documents FTAA.sme/04 and FTAA.sme/06.

The proposal takes into account the fact that the Hemispheric Cooperation Program is to serve as a key support component for the FTAA, which will make it possible to respond effectively to the development requirements and challenges arising from trade liberalization, in general, and the implementation of the FTAA, in particular.

Specifically, the HCP seeks to strengthen countries’ capacities to implement the FTAA and participate fully in it, with the goal of promoting equitable growth and inclusive economic development, enhancing institutional strengthening, and building capacities to formulate policies, develop negotiating strategies, and implement the FTAA.

  1. Project Title

    Building the Andean Community’s negotiating capacity: Enhancing the statistical information databases on available services in the Andean countries

  2. Background

    The service sector plays an important role in the socioeconomic development of countries, while also contributing to the development of other productive sectors. Consequently, when drafting public policy, governments should pay special attention to the sector, as, indeed, they have by incorporating services into their international negotiating agendas.

    Notwithstanding the above and due to conditions inherent in the provision of services, including the fact that they are intangible and can be traded internationally without physically crossing a border, preventing customs agencies from registering them as they would goods, it is difficult to ensure the reliability and comparability of statistics on services.

    These characteristics make it difficult to use statistics as an important tool for shaping and monitoring policies and commitments deriving from agreements on services.

    Internationally, progress has been made in compiling statistics on services, and some countries, including some FTAA members, have set up advanced databases. For their part, the Andean Community member countries are undertaking major efforts to apply the guidelines set out in the fifth edition of the International Monetary Fund’s Balance of Payments Manual, which establishes a basic classification for eleven categories of services, with expanded and detailed classifications tailored to the international trade reality of the Andean Community. Consideration should also be given to the recommendations of the World Trade Organization (WTO) and other international organizations that deal with services, with a view to creating a statistical system that meets all the aforesaid needs. However, these efforts are hindered by the lack of technical assistance and limited resources.

    As the FTAA evolves, it will have a significant impact on the service sector for the member countries of the Andean Community. The creation of a database with reliable and uniform information will enable the countries to make the most of the service-related opportunities presented by the FTAA.

  3. Rationale

    The rationale for the project is that, as explained earlier, it will strengthen the ability of the Andean Community countries to formulate policies and commitments in a sector that is covered by the FTAA and allow them to reap the benefits it offers.

  4. Objectives of the project:

    The general objective of the project is to develop a system that enables statistical information to be used for drafting policies on trade in services.

    The specific objectives of the project are to develop a system for compiling and analyzing statistics on the international trade in services by type of service and trading country and design the proper tools for applying the information.

  5. Inputs: resources needed for the project

    1. Assessment conducted by two experts hired with international cooperation funds, to describe, through fact-finding missions to individual countries, the sources and methods used to calculate exports and imports of services. These experts will also have to identify other sources of information on the supply and demand of services that supplement the sources already in use and make it possible to determine the origin and destination of traded services. In addition, they should meet with FTAA negotiators from the Andean Community countries to familiarize themselves with the countries’ requirements for statistical information and the specific types of services that should be incorporated in the Andean Community proposal. Lastly, the experts will present a proposal for an Andean Community methodology that includes recommendations on changes to be made to data survey systems currently in use and the new systems each country should adopt to meet the project objectives. It is worth mentioning that many national institutions are involved in this project.

    2. Meeting of government experts to discuss the methodology proposal presented by the international experts Three experts for each country, the two international experts, and the FTAA negotiators on trade in services will participate in a three-day working meeting.
      Country studies to determine the viability of applying methodology that entails a commitment from institutions to conduct surveys and prepare statistics on the international trade in services by type of service and trading country. An expert from the Andean Community will draft a consolidated proposal for the Community based on the methodology proposal and national studies.

    3. Distribution of the Andean Community proposal to the countries for their approval and to identify the financial resources needed to implement and sustain the project

    4. Securing the financial resources and technical assistance that are needed to support national institutions in their initial efforts to conduct surveys and prepare statistics on the international trade in services These resources should finance two meetings of government experts, who will evaluate and monitor the project by sharing their experiences. International experts should attend both meetings to provide support.

    5. Identification of a mechanism to ensure that statistics on trade in services will continue to be prepared in accordance with the Andean Community proposal and the agreements forged at the meetings of government experts.

  6. Expected Results

    As a result of the project, a permanent database of reliable and uniform information on trade in services is expected to be in operation within two years.

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