Almost 40 years ago (July 1986) I had the privilege of attending, at the invitation of my then esteemed professor, Dr. Guillermo Márquez, a seminar sponsored by the Ministry of Foreign Affairs and the Board of the Cartagena Agreement, entitled “Services and the Development of Venezuela”.
Dr. Márquez, now sadly deceased, was one of the most prominent figures on this subject in Latin America, and was one of the important speakers at the event, together with leading figures from UNCTAD (United Nations Conference on Trade and Development), ECLAC (Economic Commission for Latin America) and SELA (Latin American Economic System). They were also accompanied by relevant personalities such as Constantine Vaitsos, at that time former president of the Central Bank of Greece.
Why was so much importance given to this issue? Because the United States had taken an unusual step within the framework of the GATT (General Agreement on Tariffs and Trade, later replaced by the World Trade Organization, WTO) in December 1983 to include services in the negotiations on trade in goods, something that had never been studied in depth in the economies of developing countries. The seminar in question was the first serious step taken by the Venezuelan government at that time to begin national studies on the impact of services on our economy.
And why did the US take this important step? Because the developed world, starting with the USA, was moving by leaps and bounds towards an economy based on the production of services, increasingly supported by the application of new information and communications technologies (ICTs), leaving the production of goods to the less developed countries for the foreseeable future.
And this was merely the natural product of the trends of the moment and the political and practical exploitation of what the theory dictated: “Classical theory regarding the role of services in the economy has tended to suggest that the growth of the services sector has been a consequence of the development process. According to this view, in industrialized countries the development process has involved three main stages; a) the 'pre-industrial' stage, in which the economy is primarily extractive; b) the 'industrial' stage, in which manufacturing plays a dominant role; and c) the 'post-industrial' stage in which the economy becomes primarily a service economy” (3, p. viii). And it is precisely in this last stage that the U.S. finds itself today.
“In fact, in 1979, the service sector represented 60.4% of the global world product, and in the case of developed countries with a market economy, this indicator was over 75%. For developing countries, the share of services in the product was 51% in that year and in the case of Latin American countries this contribution reached 60%” (1, p.3). The USA achieved what it set out to do and in the next round of GATT negotiations in Punta del Este, Uruguay, this Agreement gave way to the creation of the World Trade Organization on January 1, 1995. The General Agreement on Trade in Services (GATS) was born.
“Before negotiations began in 1986, public services such as health care, postal services, education, etc. were not included in international trade agreements. Most of these services were restricted to local companies or public administrations, with difficulties and restrictions to extend beyond national borders. However, foreign participation in services existed in many countries prior to the adoption of GATS. Parts of the services sectors - in particular international finance and maritime transport - had been open for centuries as necessary elements of trade in goods. Other broad sectors had undergone major changes in the previous decades, in the technical and regulatory fields, favoring private participation and reducing barriers to free trade. With the emergence of information technologies, the range of services susceptible to international trade expanded, such as distance learning, engineering services, architecture and advertising” (see in Spanish Wikipedia, Acuerdo General sobre el Comercio de Servicios, in https://es.wikipedia.org/wiki/Acuerdo_General_sobre_el_Comercio_de_Servicios).
After almost 40 years, it was proven that the US was not wrong. They derived the greatest benefits and advantages from the economic policy action carried out by the administration of then President Ronald Reagan, after signing the Tariff and Trade Act of 1984 which gave the President of the United States broad powers to “...stimulate the expansion of: i) international trade in services through the negotiation of agreements (both bilateral and multilateral) that reduce or eliminate barriers to international trade in services; and ii) international services enterprises in foreign trade” (2, p. 4).
Due to the above, the USA is today the world's largest power in the tertiary sector of the economy: “The US economy is essentially based on services: the tertiary sector accounts for more than three quarters of GDP (76.4%) and employs 79% of the country's labor force (World Bank). The United States is home to the world's largest and most liquid financial markets. In 2023, the finance and insurance sector accounted for 7.3% of GDP (U.S. Trade Dept.). At the end of the same period, the U.S. banking system had $23.7 trillion in assets and quarterly net income of $38.4 billion” (see in Spanish, Santander Trade Markets, United States: Politics and the Economy, at https://santandertrade.com/es/portal/analizar-mercados/estados-unidos/politica-y-economia#:~:text=UU.).,grandes%20y%20l%C3%ADquidos%20del%20mundo).
And you may wonder why I bring up this part of the history of international trade. At the same time that the US took advantage of a very well directed policy in international trade in services, and put its economy to rest in that sector, the industrial sector relocated accordingly, precisely because of those same advantages, outside the US, resulting in the low figures shown today in that sector within the country: “the industrial sector contributes to 17.6% of GDP and employs 19% of the working population (World Bank)” (see also above Santander Trade Markets).
“Services GDP in the United States increased to USD 17,050.50 billion in Q4 2024 from USD 16,949.30 billion in Q3 2024. U.S. Services GDP averaged 12448.44 billion USD from 2005 to 2024, reaching an all-time high of 16949.30 billion USD in Q3 2024 and an all-time low of 9721.70 billion USD in Q1 2005” (see in Spanish, TradingEconomics, Estados Unidos PIB de Servicios, en EEUU: PIB de Servicios 2015-2024, in https://es.tradingeconomics.com/united-states/gdp-from-services).
There is simply no comparison possible. Since 2004, the share of industry in the US GDP has been consistently decreasing, from 20.95% in 2004 to 17.88% in 2021, while the services GDP had the opposite trend, growing from 74.16% in 2004 to 77.6% in 2021.
As indicated in the previous note, the U.S. imports more than it exports, having a structurally negative trade balance (see USA, between genius and madness, in https://ticsddhh.blogspot.com/p/usa-between-genius-and-madness.html). However, “Despite being a net importer of goods, the United States is a net exporter of services: in 2023, exports of services amounted to USD 999.1 billion (+7.6% y-o-y) compared to USD 719.3 billion of imports (+3.2% y-o-y - WTO). According to preliminary figures from the BEA, the goods and services deficit reached USD 918.4 billion in 2024, up USD 133.5 billion from USD 784.9 billion the previous year. Exports totaled USD 3,191.6 billion, up USD 119.8 billion year-on-year, while imports totaled USD 4,110 billion, up USD 253.3 billion” (see in Spanish, Santander Trade Markets, Cifras del comercio exterior de los EEUU, in https://santandertrade.com/es/portal/analizar-mercados/estados-unidos/cifras-comercio-exterior).
In other words, instead of encouraging the growth of the service sector, a sector in which the US has an indisputably superior historical comparative advantage, and with a tendency to become even stronger with astronomical investments in technology and especially in Artificial Intelligence, AI, the trade policy of President Trump's administration is to reverse more than 50 years of trade policy in services, trying to get the industrial sector, whose share in GDP is tiny compared to the tertiary sector of the economy, to recover by returning to the US, with a tariff policy aimed at reversing years of trends and whose results, if successful, will only be seen well beyond the 4 years of his term. All indicators point to the fact that this path will lead to the ravine of recession and a very tough period for Americans.
But my interest in this analysis is rather focused on how we Venezuelans are left in this American tragedy. The different oppositions we have had, from the interim managed by the MUD-PU and the National Assembly of 2015, to the opposition led by María Corina Machado (MCM) and Edmundo González Urrutia (EGU), have hitched the powerless boat that represents our power to do something against the regime of Nicolás Maduro Moros, to the flagship led by the US.
If some of us see that flagship going straight into a terrible storm, what will happen to the fragile Venezuelan boat attached to it? That boat will be the first to be wrecked. The U.S. has a way to survive what will most probably come their way because of that storm, because of their good or bad decisions in economic and political matters, we do not. And Venezuela will never be a priority in the face of the problems they will face. In the present circumstances, the decision to make our future depend on the interests of the United States should at least be reviewed. Our destiny does not have to be tied to the present situation of the United States, no matter how much sympathy we may have for them. Just like them, we Venezuelans must look after our own interests.
Decisions such as not to swear in EGU abroad should be reconsidered, so that the legitimate representation of Venezuelans who voted for a change on July 28, 2024, may decide independently which path to follow, regardless of the course of political and economic events in the U.S. and the world. Let that legitimate government decide which course of action to take in the midst of the storm, seeking the necessary support -including that of the US if it wants to give it to us- aimed at solving our problem -because it is ours, not that of the US- in a world that is convulsing, to recover the freedom of the country. If they fail, at least it will be our failure, because the leadership we elected in Venezuela made a mistake, not those who were elected in another country?
Caracas, April 2, 2025
Blog:
TIC’s & Derechos Humanos, https://ticsddhh.blogspot.com/
Email: luismanuel.aguana@gmail.com
Twitter:@laguana
(1) Acuerdo de Cartagena,
JUN/di 990, 16 de mayo de 1986, “El sector servicios en el desarrollo económico
de los países andinos, en el contexto de la cooperación subregional y en el de
las negociaciones internacionales”.
(2) Acuerdo de Cartagena,
JUN/SEM.SERV/VE/di 107 de julio de 1986, “La internacionalización del sector
servicios: Opciones y riesgos para América Latina y el Caribe.
(3) UNCTAD, TD/B/1008/Rev.1,
Los servicios y el proceso de desarrollo, Naciones Unidas
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