WHILE addressing the European Business Summit WTO DG Pascal Lamy asked the EU to open up the services sector, which would go a long way in improving its competitiveness.

He pointed out that Europe is favourably positioned in the global economy, and it has so far managed to retain its share of around 20% of world exports while the United States and Japan have seen their shares decline. He further said that its trade balance is positive overall, and it has multiplied by a factor of five since 2005.

""In my view, a big part of the answer to improving European competitiveness lies in a greater and better leveraging of Europe's comparative advantage: the size of its internal market. The EU’s internal market has helped enlarge and deepen European supply chains. Trade is no longer about finished products or services. It is about trade in tasks. In fact, 60% of merchandise trade is in intermediates. It is about adding value by contributing to a stage in the production of a finished product or by providing services. And the European market offers business an excellent setup for value chains to thrive,'' he stressed.

But, Mr Lamy stated that there is an area where the potential of the EU's internal market is not fully exploited and this is in the area of services. ''While services represent about 20% of total trade, their share doubles when we consider their contribution to global “value-added” trade. The services that are incorporated into the value of traded products include, among other things, research and development, and modern logistics. In fact, in a world of value chains, the frontier between goods and services is blurred,'' he added.