Somedelegations andexpert advisers cautioned, however, thatinsomesituations service transnational corporations mightbringlesstohostdeveloping countries -53- thantheyactually tookout.Therefore, inthefurther analysis oftheirimpact, thecost··benefit approach should beemphasized; thatis,positive effects should be weighed against possible negative consequences ofthepresence oftransnational corporations inhostdeveloping countries. Whileseveral delegations noticed a linkbetween thecomplete, free-standing natureofforeign service affiliates (as compared tomanufactur.ing affiliates) andtheirpositive contributions tothehost countries, onedelegation warnedthattheexpansion oftransborder dataflowsmight insomecasesreducethoseaffiliates toterminal affiliates producing littlevalue added. 149.Anumberofdelegations suggested thatthebestwaytoachieve acompetitive services sectorwouldbethrough apOlicyofliberalization" including liberalization oftradeandforeign directinvestment. Theyspokeoutinfavourof policy review bycountries aimedatmoreliberal regulatory framework. One delegation stressed theneedtoundertake astudyoftheeffectiveness ofcurrent regulations fromthepointofviewoftheattainment ofdevelopment goals. Other delegations statedthat,giventheheterogeneity ofservices, norigidpOlicy options shouldbeprescribed andthataflexible approach basedonacareful consideration ofcostsandbenefits wouldbethemostappropriate. Another delegation expressed theviewthattheissueofincreasing indigenous capabilities ofservice industries indeveloping countries andprotecting theirinfant industries wasmuchmoreimportant thanthatofliberalization. Manydelegations agreedthat,giventhelimited knowledge oftheactivities oftransnational service corporations andservices ingeneral, itwouldbepremature atthatstagetodecide onspecific changes inpolicies, particularly indeveloping countries. 150.Mostdelegations stressed theneedtointensify research inservices, taking intoaccount theworkoftherelevant UnitedNations organizations inthatarea,in ordertoincrease thecapacity ofdeveloping countries toformulate andevaluate policies towards transnational service corporations. Anumberofspecific proposals forfurther research weremade,including research ontransfer of technology bytransnational service corporations; effects oftechnology transferred bytransnational corporations onconsumption patterns ofhostdeveloping countries; adaptation oftechnology tolocalneedsanditsdissemination inhosteconomies; theimpactofnewtechnologies ontheinformal sectorinurnanandruralareasof developing countries; theroleandimpactoftransnational corporations inthe provision ofsocial andinfrastructural services inhostcountries, particularly in thecontext oftheprivatization ofsuchsarvices; andthenatureofcontractual arrangements andrestrictive business practices inhostcountries. Itwasalso suggested thatinitsfurther research andresulting policy recommendations the Centre shouldpaymoreattention todifferentiation ofdeveloping countries with regardtotheirlevelsofdevelopment, aswellastoheterogeneity ofservice industries whichmightsometimes require anindividual industry approach. One delegation emphasized theneedtostudytheimpactofservice activities offoreign affiliates onexports andthebalance-of-payments difficulties ofdeveloping countries, theeffects oftransnational service corporations onthenumberofjobs offered indeveloping countries ascompared totransnational industrial corporations, andthetendency oftransnational service corporations toreproduce abroadfactorpropensities usedathomewithout dueregardforlocalconditions. Thesamedelegation stressed theneedtostudytheimpactoftransnational service corporations onthecapacity oflocalcompanies tocompete withthem. 151.Several delegations stressed theneedtocontinue andexpandtheCentre's technical co-operation programme intheareaofservices, aimedatassisting -54- ----':--::::1 _ideveloping countries inobtaining abetterunderstanding oftheroleofservices in :j economic development andactivities oftransnational corporations inservices. rl Somedelegations suggested thattheCentreshouldstrengthen itslinkswiththe Vi
**Analysis**
The text discusses the impact of transnational corporations on developing countries, specifically in the context of services such as foreign service affiliates and transborder data flows. It highlights the need for a cost-benefit approach to assess the effects of these corporations and emphasizes the importance of research and policy review to achieve a competitive services sector. The text also touches on the need to protect infant industries and promote local capabilities, as well as the role of technology transfer and adaptation in host economies.

**Category**
Economic development, International trade