Femise

In this report, we argue that, to better understand how business services can contribute to competitiveness and growth in Morocco and Tunisia, decomposing trade flows in terms of value added can be a useful first step. We use the OECD-WTO Trade in Value Added database (OECD, 2016) to decompose the value added exports of business services from Morocco and Tunisia to the EU-28 and the rest of the world.

This decomposition is used to calculate several indicators of participation in GVCs. Two business service industries are examined: computer and related activities and R&D and other business activities. Combining adequate trade liberalization with investment policy reform and the promotion of business linkages between foreign and domestic firms would help local firms move upmarket in global value chains through the transfer of knowledge, skills and expertise.