“Using Trade Agreements to Obtain Market Access for Legal and Other Services” World Services Group Annual Meeting September 17, 2004 By Robert Vastine President, U.S. Coalition of Services Industries

Coalition of Service Industries Association of US private companies Advocates services trade expansion By removing market barriers complex and diverse substantially regulatory Works mainly with governments to achieve goals Leverages relationships with business in other countries Financial Leaders Group Global Services Network Friends of Services

ABC’s of Services Trade Four elements Cross-border trade trade conducted electronically Consumption abroad Tourism, health care, education Trade through US foreign affiliates Commercial presence Movement of natural persons Temporary entry is not immigration These are the four “Modes of Supply” of the GATS

US is Highly Competitive in Services Trade Cross-border services trade was almost $50 billion in surplus in 2003 Services exports were $307 billion in 2003 Affiliates sales of services were $432 billion (in 2001) affiliate sales have special significance for services Global services trade totals $1.8 trillion Only 20% of overall trade of $9 trillion Because the effort to remove barriers began in 1994 Barriers are substantially regulatory As in legal and financial services

Removing Barriers to US Services Trade US brought services into global trade system GATS 1994 Framework of rules for liberal trade in services Major element of the WTO Few commitments Much work to liberalize services trade remains This work is now focused on the “Doha Round” of negotiations under WTO and in FTAs based on same principles

Using Trade Negotiations to Break Down Barriers Multilaterally – the “Doha Round” Negotiations Bilateral Free Trade Agreements Singapore, Chile, and Morocco have been implemented Australia, Bahrain, CAFTA, and Dominican Republic have been completed, but not implemented Andean countries, Panama, Southern African Customs Union (SACU) and Thailand are being negotiated Regional efforts like Asia-Pacific Economic Cooperation (APEC) and Free Trade Area of the Americas (FTAA)

Legal Services Trade ” “Trade” in legal services occurs in all the four “modes” mentioned above “Trade” occurs when a foreign client consults a San Francisco law firm or when a US lawyer provides advice to clients in Bangkok from his branch office or his hotel room US cross-border exports of legal services were $3.3 billion in 2002 Imports were $768 million, surplus $2.5 billion Trade through affiliates was $918 million in 2001 Removing restrictions will permit more growth

What CSI Wants for Legal Services Foreign lawyers and law firms should be able to establish and practice in any business form available to host country firms Foreign firms should be able to use the name used in their home country Foreign lawyers and law firms should be able to perform services in a host country that they are allowed to perform in their home country Except litigation in local courts and other services unique to home country law (e.g., probate)

What US Wants for Legal Services (continued) Foreign firms should be able to supply legal services relating to the host country law IF those services are provided by a qualified local lawyer affiliated with, or retained by a foreign firm Foreign lawyers who want to qualify as a host country legal professional should have a reasonable opportunity to do so Foreign firms should be able to choose forms of association with local lawyers Foreign lawyers should be able to use their home country professional titles Or any title authorized for use by a host country lawyer, if qualified (e.g., Queen’s Counsellor) Foreign lawyers should be able to participate in arbitration CSI has submitted a negotiating proposal to USTR USTR has provided all WTO members available at

Transparency Is a Top Priority for All Sectors Regulatory and licensing transparency An overriding US objective in the WTO and FTAs Authorities should make administrative regulations publicly available Prior comment is essential Transparent, impartial registration procedures Regulators should process applications within a reasonable period Written statement of reasons if registration is denied Reasonable opportunity to appeal and re-apply

Liberalization in Other Sectors Doha Round covers all services except air transportation And maritime Financial services are an important focus Also telecommunications, express delivery, energy services US has ambitious agenda To secure meaningful liberalization across all sectors

Financial Services Liberalization CSI has led the private sector effort to secure liberalization Supported Treasury and USTR in 1997 negotiations, and in current Doha Round Developed the Financial Leaders Group Lobby foreign governments to liberalize Develop detailed lists of barriers in important ‘developing’ countries [India, Brazil, Korea, Egypt, ASEAN] Ask US, EU, Japanese and Canadian government negotiators to secure removal of these barriers

Examples of Financial Services We Seek to Remove Examples of Financial Services Barriers We Seek to Remove Example: Brazil 170 million people, biggest Latin American market Tradition of state ownership and heavy regulation Substantial protectionism Banking [commercial presence] Case-by-case authorization (with conditions) by Presidential decree Restricted to acquisition of domestic bank, or establishment of a subsidiary branch or rep office Foreign subs can’t provide “universal” banking service Discretionary limits on number of branches (including ATMs) No accounts in foreign currencies Restrictions on foreign bank rep office personnel

Need YOUR help to Motivate Trade Liberalization Efforts Support the US government effort in WTO And FTAs Lobby other governments Services trade liberalization will massively benefit the US University of Michigan computational analysis shows elimination of barriers would have $466 billion welfare effect on US alone $1662 billion effect on global welfare