August 12, 2003
Translation: FTAA Secretariat
FTAA – CONSULTATIVE GROUP ON SMALLER ECONOMIESPROJECT PROPOSAL IN THE FRAMEWORK
OF THE HEMISPHERIC COOPERATION PROGRAM
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.
- Project Title
Building the Andean Community’s negotiating capacity: Enhancing the
statistical information databases on available services in the Andean countries
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
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.
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.
- 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.
- Inputs: resources needed for the project
- 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.
- 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.
- Distribution of the Andean Community proposal to the countries for their
approval and to identify the financial resources needed to implement and sustain
- 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.
- 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.
- 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