The realization of many of the sustainable development goals (SDGs) depends on bolstering the performance of services sectors and improving access to specific services in developing countries. We show that when the level of economic development or the quality of institutions is sufficiently high, openness to services trade and investment is positively related to access to financial, ICT and transport services – three activities that are inputs into several SDGs. An implication is that facilitating trade and investment in services may help realize SDGs that depend on the performance of services sectors. In the absence of comparable cross-country panel data on services trade policies, country-specific analyses are needed to better understand the specific channels through which services trade policies impact on SDGs.
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Introduction

The sustainable development goals (SDGs) are a major focal point for international efforts to promote global welfare for the next decade (United Nations, 2015). The SDGs span 17 broad objectives ranging from poverty reduction to improving public health and protecting the environment.1 International trade and trade policy is one means of implementing the SDGs. A number of goals explicitly reference trade-related measures as instruments that can help to attain the objective concerned. Thus, for instance, Goal 2 (ending hunger) includes a call to correct and prevent distortions in world agricultural markets, including through the elimination of all forms of agricultural export subsidies and measures with equivalent effect. The main link between the SDGs and trade policy is made in Goal 17 (strengthening the global partnership for sustainable development). This stresses the importance of a universal, rulesbased, open, non-discriminatory and equitable multilateral trading system; timely implementation of duty- and quota-free market access on a lasting basis for all LDCs; and respecting national policy space and leadership to establish and implement policies to realize the goals. Implicitly if not explicitly, the conceptualization of the role of trade in the wording of the SDGs emphasizes measures to facilitate merchandise exports by firms in developing countries. In practice, low-income economies may have a revealed comparative advantage in services such as transport, travel and tourism-related activities or business process outsourcing. Services of all types are becoming easier to trade as a result of technological change, creating opportunities for firms in developing countries to expand trade in non-traditional products, services as well as goods. About one quarter of all LDCs are net exporters of services. For the LDCs as a group, services exports grew more rapidly than for the world as a whole during the 2000s. LDCs increased their share of global trade in services from 0.4 percent in 2005 to 0.8 percent in 2015, with commercial services exports growing by 14 percent over this period, more than twice the rate of other countries, and services exports as a whole represented some 20 percent of total LDC exports of goods and services in 2015 (WTO, 2016). Services matter for the realization of the SDGs not just because they are a potential source of exports and associated employment and household income, but because realization of many of the SDGs is conditional on enhancing the performance of a range of specific services sectors in developing countries. Attaining the SDGs is to a significant extent a services agenda. Eliminating poverty and hunger, improving health and educational outcomes, or reducing regional inequalities will require boosting services capacity and the productivity of a range of services activities, including transport, distribution, logistics, ICT, vocational training, medical services and so forth. In this paper we consider the role of trade in services and services trade policy in the effort to attain the SDGs. While there is a growing literature that investigates whether greater openness to services trade may support economic development by fostering performance improvement of firms and industries that use services as intermediate inputs (see for instance Arnold, Mattoo, & Narciso, 2008; Arnold, Javorcik, & Mattoo, 2011; Arnold, Javorcik, & Mattoo, 2016; Barone & Cingano, 2011; Bas, 2014; Bourlès, Cette, Lopez, Mairesse, & Nicoletti, 2013; Hoekman & Shepherd, 2017; Saez et al., 2015), the relationships between services trade policy and SDGs are relatively unexplored.