CARIFORUM and UK EPA Study

The contribution of foreign services value added, however, was the same (i.e., 12%) for both developed and developing countries, which implies that the domestic value added for developing countries was much lower than that for developed countries 54 . At the same time, the TiVA statistics indicate that developed countries’ services industry exports include in excess of 80% of domestic services value added, with just about 10% of services value addition being derived from imported services. Finally, a rather important finding of the WTO study is its indication that trade policies and investment promotion can be effective in closing the gap between domestic and foreign services value addition in both manufactured goods and services exports, particularly as it relates to Mode 3 commercial establishment. Indeed, such investments are thought to be beneficial toward increasing the competitiveness and quality of domestic services, particularly in relation to services that are supportive to industry, in its broadest sense, with knock-on effects for productivity and export competitiveness.

ii.

Assessment of UK Performance on Trade in Value Added Services

The importance of services value addition to the UK’s exports is noted in a 2020 study published by the UK Department for International Trade 55 , which showed the degree to which UK services value added is embodied in the country’s total exports, as well as highlighted the extent to which gross exports statistics tend to underestimate the relative importance of services to international trade (See Figure 31 below) .

54 See Lanz, R. and Maurer, A. (2015). 55 Cambridge Econometrics (2020), “Research on Trade in Value Added”, Final Research Report, Department for International Trade, 14 May 2020.

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