Servicing Trade in Services through Proper Government Policies
With ongoing digital innovation (entailing evolving information and digital technology), trade in services is exploding globally. The Asia-Pacific Region (APR), in particular, is now exposed to a flood of digital technology and related services.
These services are not only an integral part of the supply side of the economy (through productivity-raising innovation), but also enhance the demand side by creating good paying jobs for the middle class, which allows higher levels of consumption. This more inclusive growth, in turn, creates more sustainable growth which will benefit multinational corporations (MNCs) in APR nations. While it is not easy, to encourage trade in services, governments need to dismantle, restructure, and/or harmonize their domestic economic laws and regulations since excessive and inconsistent laws and regulations suffocate the development of trade in services and prevent its full blossoming. In addition, governments need to consider the situation regarding small- to medium-sized enterprises which are not just active in trade in services but, in fact, represent an overwhelming majority of the players. Furthermore, governments need to design adequate policies to prevent unfair competition. Of course, domestic competition policy has to be harmonized with international law, regulations, and norms for it to function well and gain acceptance. Beyond the above, a critical and daunting task for governments is to establish sensible international rules for the protection of consumer data that may cross national borders. To achieve an open and stable market that allows MNCs to reach their potential requires attention to these challenges, not just resistance against the nationalistic and protectionist sentiments spreading over globe these days. It is critical to make politicians aware of the realities and benefits of economic globalization without which we would be much poorer. Otherwise, MNCs will face a shrinking market even in the dynamic APR, a locomotive of world economic growth.