Séminaire sur les commerce des services Organisé par IsDB Casablanca, 15 – 18 juin 2009 "The trend of International Services Trade & Investment" Pascal Kerneis Managing Director ESF (European Services Forum) « The voice of the European Service Industries for International Trade Negotiations in Services »

1.Presentation of the European Services Forum 2.What are we talking about, what kind of services? 3.Place of services in the world economy and world trade 4.What does international trade in services includes? 5.Where the majority of FDI goes?

« The voice of the European Service Sectors for International trade Negotiations in Services » WHO ESF DOES REPRESENT? 30 European services companies, most of them major multinational companies (represented at CEO or Chairman level in the European Services Leaders Group – ESLG) 37 European trade federations of various services sectors (e.g. banking, insurance, telecommunications, express, architects, engineers, accountants, shipping, tourism, etc.)

« 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 Publishing services (incl. Music) 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

« The voice of the European Service Industries for International Trade Negotiations in Services» BARCLAYS BANK BT (British Telecom) CLIFFORD CHANCE COMMERZBANK DEUTSCHE BANK DHL FRANCE TELECOM GOLDMAN SACHS IBM EUROPE LLOYD’S PRICEWATERHOUSE- COOPERS ROYAL AHOLD NV SIEMENS AG STANDARD CHARTERED BANK TELEFONICA TNT TUI VEOLIA ENVIRONMENT ESF MEMBERS INCLUDE: For more information, see

« The voice of the European Service Industries for International Trade Negotiations in Services» ESF MEMBERS INCLUDE: For more information, see

« The voice of the European Service Sectors for International trade Negotiations in Services » WHAT DOES ESF DO? 1.It represents the interests of European services companies that export (or wish to export) their services and that do (or wish to do) business outside the EU. 2.As an important and well recognised Forum in its scope of activity, ESF is an appropriate interlocutor for the briefings done by services negotiators from Brussels (DG Trade) and from Geneva (WTO), reaching a large panel of the interested sectors in one place. 3.It informs its members on the GATS negotiations and regional and bilateral trade negotiations, on the offensives and/or defensives positions of the other trading parties.

« The voice of the European Service Industries for International Trade Negotiations in Services» The Services sector generates 90% of new jobs in the EU15 Services Agriculture Industry

World Economy: Percentage of GDP by Sector, 2006

« The voice of the European Service Industries for International Trade Negotiations in Services» * Source: WTO International Trade Statistics – 2008 * : Includes significant re-exports or imports for re-export.

« The voice of the European Service industries in international trade in services negotiations » International Trade in Services: what does it include? Services exports in the balance of payment include commercial transactions that involve the crossing of borders. It comprise the cross-border services (mode 1) like electronic commerce transactions, architectural plans sent by fax, legal consultancy provided by , Payment of a tourism package (all inclusive trip), payment of yearly university fees (mode 2), payment of licence or franchise fees (royalties), payment of transport fees (shipping, air cargo & express), etc. The repatriation of profits of affiliates (mode 3); The payment of the contract between the companies who agreed to get an accountant (natural person) moving to the customer to make an audit for six weeks (mode 4), etc.

Trends in World Trade in Services

International Trade in Services 28.9% 42.2%

RankCountryTrade Volume ExportsImportsBalance 1USA Switzerland Japan China Russia Norway Canada Singapore Turkey Australia EU-27 International Trade in Services with non-EU Countries 2007, EUR bn « The voice of the European Service industries for the International trade in services negotiations »

EU-27 International Trade in Services with non-EU Countries in 2006 (EUR bn) RankCountryTrade VolumeExportsImportsBalance 11Hong Kong India Korea Brazil South Africa Egypt Croatia Mexico Thailand Israel Morocco Taiwan Argentina Malaysia New Zealand Indonesia2,

Trends of the EU International Trade in Services

EU International trade in Services (Trends in volume – Bio €)

« The voice of the European Service Industries for the GATS negotiations » Trade between Member States exceeds Extra-EU trade Source: Eurostat TOTAL EXPORT (intra + extra: Bio €) € 679.6bn € 498.5bn

« The voice of the European Service Industries for the GATS negotiations » What 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).

What does FDI include? FDI Capital Flows FDI income FDI stocks in a country at the end of the year

Services contribute to the largest share of FDI (1) 444,1 Bn € were invested in Services sectors by the EU in 4 years (63,6 % of total 697,5 Bn €) (extra EU)

Services contribute to the largest share of FDI (2)

86% of the investment coming to the EU are done in the Services sectors; « The voice of the European Service Industries for the GATS negotiations »

THANK YOU FOR YOUR ATTENTION! Pascal KERNEIS Managing Director European Services Forum – ESF 168, Avenue de Cortenbergh B – 1000 – BRUSSELS Tel: Fax: Website : « The voice of the European Service Industries for the GATS negotiations »