AZERBAIJANS ACCESSION TO THE WTO: ITS PROPOSALS ON THE SERVICE SPHERE ARE MORE LIBERAL THAN THE COMMITMENTS OF WTO MEMBERS

Adalat MURADOV


Adalat Muradov, D.Sc. (Econ.), Professor at the Academy of Public Administration under the President of the Republic of Azerbaijan (Baku, Azerbaijan)


Introduction

The service sector is developing dynamically in the world and its share in GDP is growing from year to year. According to the IMF, the share of services in world GDP amounts to 63.2%, whereby the U.S. accounts for 80% and the EU for more than 70% of world GDP. World practice also shows that the share of added value in the service sphere is much higher than in industry and agriculture.

The total volume of exported services is also increasing at a rapid rate. For example, the volume of exported services in world trade increased from $155 billion in 1975 to $2.5 trillion in 2005, i.e., it has risen more than 15-fold in thirty years.

The export of services in the world amounts to approximately 20% of the entire commercial export of goods and services. Banking services, insurance, operations in the securities market, construction, and telecommunication services have long extended beyond national boundaries. Approximately 75% of the services (in value terms) is exported by developed countries, 24% by developing countries and the countries with a transition economy, and 1% by international organizations. At the same time, it should be emphasized that most developing countries are characterized by a negative balance of foreign trade in services.

This article analyzes Azerbaijans service market and its development characteristics and makes a comparative analysis of Azerbaijans proposals on the service sphere and the service commitments of the WTO member countries.

Development Characteristics of Azerbaijans Service Sector

Azerbaijans service market began to emerge in the 1990s after Azerbaijan gained its state independence. Prior to this time, the activity of most service sectors was strictly regulated by the state, and in some of them the state was the main supplier of services. Since the 1990s, the domestic service market has been in a state of expansion. The greatest momentum is seen in construction, transportation, banking, insurance, telecommunications and communications, trade, catering, and tourism.

Some service sectors are developing with particular dynamism. For example, in just the past 10 years, construction has increased 7.6-fold, communications9.5-fold, trade3.2-fold, and transportation2.9-fold. As a result, the share of certain service sectors in Azerbaijans GDP has been increasing with each passing year. For example, as of today, this index amounts to 7.5% in construction, 6.6% in trade, 6% in transportation, and..


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