RESTORING and increasing the export performance of Least Developed Countries (LDCs) in services trade has taken on greater urgency in light of the COVID-19 crisis, which has seen LDCs suffer the steepest declines in services trade, World Trade Organisation (WTO) Director-General Ms Ngozi Okonjo-Iweala said.

Speaking at a webinar on LDCs and services organised by the WTO’s Council for Trade in Services, she said the pandemic has severely affected services that require in-person contact between suppliers and consumers, most notably the tourism and transport sectors, where LDCs have a relatively high footprint in global trade.

In 2020, LDC exports of travel and tourism fell by 69 per cent and reduced 16 per cent in transport services, with the services export sector seeing revenue losses to the tune of USD 17 billion.

Decreased export revenues mean job losses and economic distress for people, along with increased financial and debt pressures for governments. "Against this background, restoring and increasing the export performance of LDCs in services takes on even greater urgency. Services can help LDCs increase and diversify exports from more traditional agricultural products and commodities, reducing exposure to price volatility," she said.

In 2019, prior to the pandemic, LDCs accounted for 0.3 per cent of total global services exports across all four modes of supply. In comparison, their share in global tourism exports was 1.3 per cent, and 0.6 per cent for transport services — mostly air passenger transport.

With the goal of enhancing LDCs' participation in global services trade, WTO members in 2011 adopted the LDC Services Waiver to allow members to offer preferential market access for services and service suppliers from LDCs, analogous to existing trade preferences for LDC merchandise exports.

To date, 51 WTO members accounting for over four-fifths of global economic output and trade have notified preferences for the benefit of LDC services and services suppliers.

However, "we should not rest on our laurels," Ms Okonjo-Iweala declared. "Our ultimate objective is to enhance LDCs' integration in global services trade. We need to ensure that we are doing enough, that our actions continue to facilitate progress. And we need to ask ourselves if there are other things that we can do that would help us reach our objective."

LDCs have been disproportionately affected by the COVID-19 crisis due to their heavy reliance on travel and transport services. A decline in LDCs' overall services exports ranging between 11-55 per cent was reported in the first three quarters of 2020. For non-LDC countries, the downturn ranged between 7-28 per cent.