Largest chunk of economy seen neglected in WTO talks

By Laura MacInnis

GENEVA (Reuters) - Countries pushing for a new global trade pact should pay more attention to the risks and rewards of encouraging cross-border telecommunications, banking and other service businesses, officials said on Thursday.

Major economies have clashed openly over how much to cut tariffs and subsidies on goods such as steel, cotton and rice, in the more than six-year-old drive for an export-boosting World Trade Organisation (WTO) accord.

Such disputes have largely overshadowed negotiations about opening up the slightly more amorphous services sector, despite the fact that it makes up the bulk of the global economy, World Bank lead economist Aaditya Mattoo said.

"Services do not even seem to be part of the main political discourse," he told a seminar at the WTO's Geneva headquarters.

About 80 percent of U.S. and European Union economic output comes from services, a category including engineering, tourism, architecture, computing, education and transport. The United States and EU account for 60 percent of world services exports.

But developing nations such as India, Brazil and Costa Rica have significantly boosted their service exports in past years, and many poorer countries are intensely interested in cutting barriers to skilled-worker mobility, another area of in the WTO's Doha Round of talks.

Chinese trade official Xie Cheng said the reluctance of rich countries to ease restrictions on the temporary migration of doctors, lawyers and other professionals was an impediment to clinching a new accord.

"That is a big problem for the future negotiations in services," he told the Geneva meeting of diplomats and analysts.