A New Growth Paradigm –The Services Economy in the Pacific Alliance

The aim of this report is to assess the performance, key challenges and policy implications of enhancing the service economy, including the collaborative economy, within the members of the Pacific Alliance and at the regional level.

The report explores the role that services are playing in the PA’s evolving economic landscape, both at the level of individual member countries and regionally between them.

The report is organized as follows. Section II proposes a conceptual framework to understand the strategic role that services play in underpinning four key dimensions of the growth process: (i) boosting competitiveness and allocative efficiency; (ii) promoting inclusiveness and inequality reduction; (iii) contributing to SME growth and enhancing their access to international markets; and (iv) a source of product and process innovation.

Section III of the report maps the services landscape in the Pacific Alliance from an economic and regulatory stance. The section depicts salient trends in services trade and investment at the intra-regional level and for individual PA members. It subsequently explores the regulatory regimes governing trade and investment in services in the PA through the lens of two key region-wide legal instruments: the Framework Agreement and in particular the Commercial Protocol. The section closes with an examination of various soft law initiatives that PA members are undertaking in the services realm.

Section IV attempts a conceptualization of the collaborative economy and advances a number of conjectures on what the growth of the collaborative economy portends for policy initiatives in the PA region. The report’s closing section recalls core findings and puts forward a number of recommendations to move the PA services agenda forward.

The report includes an annex section that deepens the analysis of service sectors performance for individual PA members by considering two core issues. It first assesses the performance of backbone services and the regulatory environments in place within the individual PA members. It describes the domestic liberalization patterns through (unilateral) regulatory reforms and their contribution to region-wide regulatory convergence and growth. Second, it examines current national strategies to support export diversification opportunities for PA members in the services field and the degree to which they converge or overlap.

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Authors: Ana María Palacio Valencia & Pierre Sauvè
Full document: 2017, Palacio & Sauve, A New Growth Paradigm. The Services Economy in the Pacific Alliance