Services are an important and growing part of the global economy and account for the largest share of output and employment in developed and developing countries alike. Yet many developing countries are not benefiting from this growth because their service sectors are underdeveloped, inefficient, and costly. Liberalizing both knowledge-based and labor-intensive services can significantly stimulate growth. Assistance should help countries identify service sectors that suffer constraints and help them remove those constraints, either through market access negotiations or domestic reform.

In this paper we describe services, sector-specific challenges that inhibit growth, and multilateral and regional donor assistance programs related to services. We suggest strategies and objectives for USAID missions pursuing trade capacity building in the services sector.