Transcript « The voice of the European Service Industries for International Trade Negotiations in Services » COMESA (Common Market for Eastern and Southern.

« The voice of the European Service Industries for
International Trade Negotiations in Services »
COMESA (Common Market for Eastern and Southern Africa) Business
Forum for the Signing of Interim EPA
Mauritius – 27-28 August 2009
Trade in services, trading into the future in the region
“Trade and Investment in
Services Sector in
COMESA: the view of the European companies
and opportunities for ESA companies to link up
with European investors”
Pascal Kerneis, Managing Director
ESF (European Services Forum)
« The voice of the European Service Industries for
International Trade Negotiations in Services »
CONTENT
• WHAT IS ESF
• THE IMPORTANCE OF SERVICES IN THE
ECONOMIES AND OF INTERNATIONAL
TRADE IN SERVICES
• THE IMPORTANCE OF FDI IN SERVICES
SECTORS
• THE PARTICIPATION OF ESA & EAC
COUNTRIES TO TRADE IN SERVICES
NEGOTIATIONS
« The voice of the European Service Industries for
International Trade Negotiations in Services »
ESF covers most services
sectors, including:
• Insurance
• Banking
• Business services: IT &
Computer; consulting,
advertising, after-sales services
• Professional services:
legal services, accountants,
architects, engineers
• Construction services
• Distribution services
• Postal & Express
Delivery services
•
•
•
•
Audio-visual services
Energy related services
Environmental services
Telecommunication
services
• Tourism
• Air Transport
• Maritime Transport
But no members in
Education or Health
services
For more information, see www.esf.be
« The voice of the European Service Industries for
International Trade Negotiations in Services »
ESF MEMBERS INCLUDE:
For more information, see www.esf.be
« The voice of the European Service Industries for
International Trade Negotiations in Services »
Services share of total
employment in the EU
Services Share of World Trade - 2007
Agriculture
Services
24%
4,2
28,6
Industry
Agriculture &
Industry
76%
67,2
Services
Services Share of FDI
Agric. &
Industry
40%
Services
60%
The Services sector generates 90% of new jobs in the EU15
« The voice of the European Service Industries for
International Trade Negotiations in Services »
World Economy:
Percentage of GDP by Sector, 2006
77,6
80
65
70
59,5
60
51,2
16,7
50
40
30,2 3230
23,8
20
20,4
14,8
30
20
10
3
50
45,2
34
24,7
2
0
Agriculture
Industry
Services
Developed
Developing
EU
China
Kenya
Uganda
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
Importance
of the Services Sector
« The voice of the European Service Industries for
in the Eastern and
Southern
Africa
Region*
International
Trade
Negotiations
in Services »
Burundi
Comoros
Djibouti
Eritrea
Ethiopia
Kenya
Malawi
Mauritius
Madagascar
Rwanda
Seychelles
Sudan
Tanzania
Uganda
Zambia
Zimbabwe
services: 34.1% (2006 est.)
services: 56% (2001 est.)
services: 59.6% (2003 est.)
services: 64.6% (2006 est.)
services: 40.4% (2006 est.)
services: 65% (2004 est.)
services: 47% (2006 est.)
services: 69.7% (2006 est.)
services: 27.2% (2006 est.)
services: 37.3% (2006 est.)
services: 66.7% (2006 est.)
services: 39.7% (2006 est.)
services: 38,7% (2007 est.)
services: 48.5% (2006 est.)
services: 51.2% (2006 est.)
services: 59.4% (2006 est.)
(EAC)
(EAC)
(EAC)
(EAC)
(EAC)
* except Tanzania = EAC + SADC Source: CIA – The World Fact book
« The voicetrade
of the European
Service Industries for
EU International
in
Services
International Trade Negotiations in Services »
(Trends in volume – Bio €)
« The voice of the European Service Industries for
International Trade Negotiations in Services »
Trade between Member States exceeds Extra-EU trade
€ 679.6bn
€ 498.5bn
Source: Eurostat
TOTAL EXPORT (intra + extra: 1178.1 Bio €)
International
Trade
Services
« The voice
of thein
European
Service Industries for
International Trade Negotiations in Services »
28.9%
42.2%
ACP countries export«already
inService
the EU
The voice ofservices
the European
Industries for
International
Trade Negotiations
Services
EU-25 International Trade in Services
with non-EU
Countries in
2004,
EUR»bn
Ra
nk
1
2
3
4
5
6
7
Country
USA
Trade
Volume
Exports
Imports
Balance
221,394
116,284
105,110
11,173
Switzerland
77,016
43,934
33,082
9,921
Japan
29,255
18,927
10,328
3,798
Norway
22,125
12,961
9,164
2,758
China
16,050
8,786
7,264
1,522
Canada
15,287
8,062
7,225
8,37
Russia
14,872
8,222
6,650
1,572
7,151
3,552
3,599
-48
30,722
15,759
14,963
796
12 South Africa
All ACP Countries
« The voice of the European Service Industries for
International Trade Negotiations in Services »
What International Trade in Services (ITS) does not include?
• The activities of the foreign affiliates within the country in
which they are established are not taken into consideration
(= part of local GDP), nor the self financed investments
through benefits (reinvested earnings/income) (also local).
• The flow of capital involved in mode 3 operations, i.e. the
financing of the establishment of a new commercial
presence in a foreign country; This is included in the
Foreign Direct Investment (FDI) accounts, not in the
balance of payment, hence not considered as services
exports.
• More than 65% of global FDI flows are invested in services
sectors (see hereafter).
Services contribute« The
to voice
the oflargest
share
ofIndustries
FDI (1)
the European
Service
for
International
Trade
Negotiations
444,1 Bn € were invested in Services
sectors by
the EU
in 4 years in Services »
(63,6 % of total 697,5 Bn €) (extra EU)
« The voice of the European Service Industries for
International Trade Negotiations in Services »
93% of the investment coming to the EU are
done in the Services sectors;
« The voice of the European Service Industries for
International Trade Negotiations in Services »
The importance of private Foreign Direct
Investment in Developing Countries
1400
1400
1200
950
1000
ODA
800
FDI
600
Incl. FDI to
DC
Workers
Remittances
400
200
0
400
200
65
32 60
30
1990
Bio US $/Year -
250
100
90
2000
145
2007
Source: UNCTAD FDI Report & World Bank
« The voice of the European Service Industries for
International Trade Negotiations in Services »
IMPORTANCE OF SERVICES IN A SUSTAINABLE DEVELOPMENT
 Attract FDI in Infrastructure
services:
• Telecoms, Express Courier
• Logistics (transports,
distribution, etc.),
• Energy distribution network,
• Water and Waste
management,
• Financial services System,
etc.
Experience shows that
foreign service suppliers
that invest in a country do it
for a long period.
Attract transfers of expertise
and of know-how of foreign
service suppliers, which in
turn initiate:
•Local jobs creations
•Staff vocational training, etc.
•Better quality of the services,
•Cheaper services,
•More choice for the
consumers
•Reduction of the cost of doing
business for local SMEs.
« The voice of the European Service Industries for
International Trade Negotiations in Services »
Why FDI is not coming to Africa? What is
missing?
• Legal security for all investment is missing.
• This can be achieved through the binding of the
domestic/autonomous legislation in the framework of a
multilateral trade agreement (WTO) or a Regional (EPA
or Bilateral trade agreement.
• This legal security is a crucial element for the services
companies, but too often ignored by the governments.
• Foreign companies are reluctant or hesitant to invest
time and money if the conditions of establishment or of
doing business can be changed without notice (change
of government, corruption, military coup, etc.).
« The voice of the European Service Industries for
International Trade Negotiations in Services »
•
•
•
•
•
•
•
•
List of criteria that a CEO looks at when taking
a decision to invest in a developing countries:
Potential market (size, income per capita, follow the demand, i.e. corporate
customers)
Existing competition, special treatment for local players
Benefits prospects at short, medium and long terms
Good governance (level of corruption, transparency of the legislation, etc.)
State of the regulation (existing barriers at all levels, independent
regulatory authority, implementation of the regulations, i.e. Regulatory
Certainty)
FDI incentives (special zones, tax incentives, corporate tax, etc.)
Business Environment (incl. availability of human capital, level of education)
Country Risk Assessment: political stability, GATS/Trade agreement sector
specific binding commitments, i.e.
the GATS/EPA are only additional criterion for companies to tick. But they
can often make the difference. For the Developing countries, it is an
additional opportunity to seize as to attract FDI.
WHAT THE EUROPEAN
SERVICES
WANTS
FROM
« The
voice of the SECTOR
European Service
Industries
for
International
Trade Negotiations
in Services
»
THE GATS NEGOTIATIONS,
OR FROM
ANY OTHER
TRADE
NEGOTIATIONS (INCL. EPA) ?
•Improved market access via Commercial Presence
Abroad Mode 3 of the GATS – i.e. joint ventures;
subsidiaries; branching: Removal of equity cap to
allow 100% ownership of FDI
•Commitments for Cross-Border Supply via Mode 1 of
the GATS, i.e. e-commerce, internet, sending
electronic data to call centers, back offices, etc.
•Movement of Natural Persons via Mode 4 of the
GATS, i.e. moving skilled business personnel within a
company (intra-corporate transferees) and to a
company’s clients on a temporary basis
« The voice of the European Service Industries for
International Trade Negotiations in Services »
Hierarchy of European Interests
in Trade Negotiations
What EU companies
=>What is happening
want:
in the reality:
1. WTO DDA
1. Autonomous No Legal
Security !
2. Regional Trade
Liberalisation
Agreements (with
2. FTAs
Integrated Markets)
3. RTAs
3. Bilateral Agreements
4. RTAs (EPAs) without
4. Autonomous
Services !!!
Liberalisation… BUT
5. WTO ?? !!!
« The voice of the
Service Industries
Participation
ofEuropean
ACP countries
in for
International Trade Negotiations in Services »
DDA GATS negotiations
14 ACP countries have tabled an initial offer =
Barbados; Dominica; Gabon; Grenada; Guyana; Fiji,
Jamaica; Kenya; Mauritius; St. Chris & Nevis; St.
Lucia; St Vincent & Grenadine; Senegal; Trinidad &
Tobago
46
4 African Countries;
50
9 Caribbean Countries;
40
1 Pacific Region;
30
20
8,6
1 ESA Region;
10
1 EAC Region;
0 SADC (1: S.A.)
0
ACP
% pays de l'OMC
% des offres déposées
EAC Specific
Commitments
in theIndustries
U. R. for
« The voice
of the European Service
International Trade Negotiations in Services »
Sectors
Max Poss.
1
46
Burundi (LDC
9
2
26
3
5
4
5
5
3
5
5
6
4
7
23
8
4
9
4
10 11 Total
5 35 162
2
3
22
& LLDC)
Kenya
Rwanda (LDC
3
2
10
1
1
3
1
7
1
24
6
& LLDC)
Uganda
5(?)
2
7
1
1
(LDC & LLDC)
Tanzania
LDC= Least Developed Country; LLDC: Landlocked Developing Country; SIDS = Small Island Developing State
1: Business Services; 2: Communication Services; 3: Construction & Related
Engineering Services; 4: Distribution Services; 5: Education Services; 6: Environmental
Services; 7: Financial Services; 8: Health Services, etc.; 9: Tourism, etc.; 10:
Recreational Services, etc.; 11: Transport Services; 12: Other Services (Kenya: 1
commitment)
ESA (- EAC) Specific
Commitments
in the
U. R.for
« The voice
of the European Service
Industries
Sectors
1
2
Negotiations
3 International
4
5 Trade
6
7
8
9in Services
10 11»
Max Poss.
46
26
5
5
5
4
23
4
4
5
35
Total
162
Not a WTO Member – LDC & SIDS
Comoros
Djibouti (LDC)
8 (?)
1
1
10
Eritrea
Not a WTO Member – LDC
Ethiopia
Not a WTO Member – - WTO Observer (Accession) - LDC & LLDC
Kenya
3
Madagascar (LDC)
2
Malawi (LDC & LLDC)
5
Mauritius
10
5
8
24
12?
2
8
4
3
28
2
21
Not a WTO Member - WTO Observer
Sudan
Zimbabwe
7
2
Seychelles
Zambia (LDC & LLDC)
3
Not a WTO Member - WTO Observer - LDC
5
5
10?
2
7
4
16
3
20
1: Business Services; 2: Communication Services; 3: Construction & Related Engineering Services; 4:
Distribution Services; 5: Education Services; 6: Environmental Services; 7: Financial Services; 8: Health
Services, etc.; 9: Tourism, etc.; 10: Recreational Services, etc.; 11: Transport Services; 12: Other Services
« The voice of the European Service Industries for
International Trade Negotiations in Services »
EPA Negotiations with ESA & EAC: WHICH ARE THE COUNTRIES
CONCERNED?
• EU: Austria, Belgium, Bulgaria, Czech Republic, Cyprus,
Denmark, Estonia, Finland, France, Germany, Greece, Hungary,
Ireland, Italy, Latvia, Lithuania, Luxembourg, Malta,
Netherlands, Poland, Portugal, Romania, Slovenia, Slovakia,
Spain, Sweden, United Kingdom
• EAC: Kenya, Uganda, Tanzania, Burundi, Rwanda *
An interim EAC EPA was initialed by EC and all five countries.
EAC is a customs union operational since 2005 and has the
ambition of a common market (2009) and later political union.
• ESA initial configuration: Burundi, Comoros, Djibouti, Eritrea,
Ethiopia, Kenya, Malawi, Madagascar, Mauritius, Rwanda,
Seychelles, Sudan, Uganda, Zambia, Zimbabwe *
An Interim ESA EPA was initialed by the EC and Comoros,
Madagascar, Mauritius, Seychelles, Zimbabwe and Zambia.
Interests «ofThe
European
Services Sectors in EPA with
voice of the European Service Industries for
ESA
& EAC Region’s
countries
International
Trade Negotiations
in Services »
• ESA – EAC Region’s countries should participate more
actively to the services negotiations of the WTO (To table
initial offers opening market access to key services
sectors for the countries and giving national treatment.
• ESA – EAC Region’s countries should open services
negotiations with the EU in the EPA framework, with the
aim to reach a « GATS + » agreement, in accordance with
GATS Article 5; The impact of this would be:
– Sending a strong signal to foreign investors (legal security of
investments)
– Contribution to the integration of the region in the world
economy.
• To increase the cooperation with European services
companies:
– Joint-ventures, subsidiaries, branches, back offices, transfers of
skills in both ways, etc.
Interests of European «Services
Sectors in EPA with ESA – EAC
The voice of the European Service Industries for
Region’s
countries
International
Trade Negotiations in Services »
What countries have agreed to commit in the services
sectors in the Full EU-CARIFORUM EPA initialled in
December 2007?
Sectors
Max Poss.
1
46
2
26
3
5
4
5
5
5
6
4
7
23
8
4
9
4
10
5
11
35
15
46+ 26+ 5+ 4 5 4+ 21 3 4+ 5 35+
countries*
*= Antigua & Barbuda; Barbados; Belize; Dominica; Dominican Republic;
Grenada; Guyana; Jamaica; Saint Christopher & Nevis; Saint Lucia; Saint
Vincent & the Grenadines; Suriname; Trinidad & Tobago
Total
162
159
NB: Total represent commitments by at least one country, not all Cariforum
members have taken the same commitments; many have maintained limitations, or
decided to open with a transitional period.
+ = more detailed commitments than the CPC Description
« The voice of the European Service Industries for
International Trade Negotiations in Services »
 What countries have agreed to do in Interim SADC EPA
initialled in December 2007? (Art 67)
• “To liberalise 1 services sector (out of 12) by each of
the participating countries,
• To agree on a standstill clause for all services sectors (as
in Art. V.1.b (ii) of GATS)
• To agree to negotiate progressive liberalisation with
substantive sectoral coverage within a period of 3 years
following the conclusion of a full EPA.”
 What are the provisions in EAC & ESA Interim EPA?
The same or even less… Is this really going to fulfil
European service providers ambitions? Is this really a
big political price to pay by the EAC & ESA countries? Is
this really a difficult challenge to achieve?
WHAT
NEXT
the
EU ? Service Industries for
« The
voicefor
of the
European
International Trade Negotiations in Services »
Bilateral Free Trade Agreements
(FTA)? (RTA)?
EU/GCC (Gulf Cooperation Council) (2008?)
EU/Mercosur (negotiations since 1999)(?)
EU/ACP (6 Economic Partnership Agreements = 1 full EPA with
Caribbean = 12/2007) – 5 other Full EPAs with services
package = 2013?
EU/Mediterranean countries (EuroMed)(2010)?
EU/Central America – 2009?
EU/Andean Countries – 2009?
EU/South Korea - 2009
EU/ASEAN
EU/India - 2010?
EU/China
EU/Ukraine
« The voice of the European
Service Industries for
ESA-EAC REGION’s
Services
International Trade Negotiations in Services »
Providers are Welcome in the EU
• The EU’s Services Market is remarkably open
• World’s largest market for services, valued at
US$7.8 trillion in 2004
• Population of EU 27 = 493 millions
• GDP per capita of US$25,700
• The more the market is open, the more it
attracts FDI, the more it remains competitive.
• Services providers of the region might find
opportunities, notably to serve the exporters of
the region.
• Don’t be ashamed or afraid of your small size!
« The voice of the European Service Industries for
International Trade Negotiations in Services »
• The European Union has adopted in December 2006 a directive on
services in the internal market to improve the single market
(implementation in 2010)
• It is automatically extended to all foreign owned company incorporated
in one of the 27 EU countries
• The Directive 2005/36/EC, adopted on 7 September 2005, consolidates
and modernises the rules currently regulating the recognition of
professional qualifications.
On 20 October 2007, at the end of the transposition period, this
Directive has replaced fifteen existing Directives in the field of the
recognition of professional qualifications.
• But the directive does not apply to non EU Professionals. They must sign
either with each of the 27 EU Member States, or with the EC, a mutual
recognition agreement (MRA), according to Article VII GATS.
• The EC has mandate to negotiate MRA for architects on a pilot phase.
Private sectors associations agreement is a pre-condition to engage in
negotiations. The purpose would then be to transform this private
sector agreement into binding agreement. The profession has first to
agree on the terms of equivalence of the diplomas and qualifications (+ 6
months study to learn local legislation, etc. + training period)
« The voice of the European Service Industries for
International Trade Negotiations in Services »
THANK YOU FOR YOUR ATTENTION !
Pascal KERNEIS
Managing Director
European Services Forum – ESF
168, Avenue de Cortenbergh
B – 1000 – BRUSSELS
Tel: + 32 2 230 75 14
Fax: + 32 2 320 61 68
Email: [email protected]
:
Website
www.esf.be