1. « The voice of the European Service Industries for International Trade Negotiations in Services » Séminaire sur les commerce des services Organisé par IsDB Casablanca, 15 – 18 juin 2009 “Regionalism Vs Multilateralism: The case of EU/African countries: Point of view of EU businesses" Pascal Kerneis - Managing Director ESF (European Services Forum)

2. « The voice of the European Service Industries for International Trade Negotiations in Services » In addition of the multilateral trade negotiations in the WTO framework, the EU has started a large number of Regional or Bilateral Trade Negotiations (RTA, FTA) but has concluded only one so far:  EU/GCC (Gulf Cooperation Council) (1991 - 2009?)  EU/Mercosur (negotiations since 1999)(?)  EU/ACP (6 Economic Partnership Agreements = 12/2007?)  EU/Mediterranean countries (EuroMed)(2008)  EU/Central America (5 +1 countries)  EU/Andean Countries (down to 3 countries: Columbia, Peru & Ecuador)  EU/ASEAN 7 - (?) (“suspended”)  EU/Canada (launched in May 2009)  EU/China  EU/India  EU/Libya  EU/South Korea (2007-2009?)  EU/Ukraine

3. « The voice of the European Service Industries for International Trade Negotiations in Services » European Partnership Agreements (EPA) between the EU & ACP countries: the Theory (1)  A full Regional agreement with 6 regions, regrouping 75 ACP countries (+ SA): 1.EU-CARIFORUM: 15 countries: Antigua and Barbuda, Bahamas, Barbados, Belize, Dominica, the Dominican Republic, Grenada, Guyana, Haiti, Jamaica, Saint Lucia, Saint Vincent and the Grenadines, Saint Christopher and Nevis, Suriname, and Trinidad and Tobago. 2.EU-West Africa – ECOWAS + Mauritania: Benin, Burkina faso, Cape Verde, Côte d’Ivoire, Gambia, Ghana, Guinea, Guinea Bissau, Liberia, Mali, Mauritania, Niger, Nigeria, Senegal, Sierra Leone, Togo: 16 countries 3.EU-Central Africa – CEMAC + STP: Cameroon, Central Africa Republic, Chad, Congo, Congo DR, Equatorial Guinea, Gabon, Sao Tome & Principe: 8 countries 4.EU-Pacific: 14 countries: Cook Islands, Fiji, Kiribati, Marshall Islands, Micronesia, Nauru, Niue, Palau, Papua New Guinea, Samoa, Salomon Islands, Tonga, Tuvalu and Vanuatu,

4. « The voice of the European Service Industries for International Trade Negotiations in Services » European Partnership Agreements (EPA) between the EU & ACP countries: the Theory (2) 5.EU-East Africa: a)East Southern Africa – ESA: ESA is a diverse EPA group including Indian Ocean islands (Comoros, Madagascar, Mauritius and Seychelles), countries from the Horn of Africa (Djibouti, Ethiopia, Eritrea and Sudan) and some countries of Southern Africa (Malawi, Zambia and Zimbabwe): 11 countries. b)Eastern African Community – EAC: Burundi, Kenya, Rwanda, Tanzania, and Uganda: 5 countries 6.EU-SADC: The Southern African Development Community consists of 15 members. Seven of them are negotiating an EPA with the EU as the SADC EPA Group. These countries are Angola, Botswana, Lesotho, Mozambique, Namibia, Swaziland and South Africa: 7 countries

5. « The voice of the European Service Industries for International Trade Negotiations in Services » European Partnership Agreements (EPA) between the EU & ACP countries: the practice! A.Full EPA signed with 14 CARIFORUM countries. The EU still works with Haiti to join the EPA soon. B.To date, interim agreements have been concluded with: 1.Central Africa: A regional agreement with Cameroon (other countries in the region finally opted not to join the agreement) 2.Southern Africa (SADC region): A regional agreement with Botswana, Lesotho, Swaziland, Mozambique and Namibia (But only 3 signed in June 09) 3.West Africa: Individual agreements signed with Ivory Coast and Ghana 4. East Africa: A regional agreement with the East African Community (Kenya, Uganda, Tanzania, Rwanda and Burundi) 5.Eastern and Southern Africa (ESA region): A regional agreement with Comoros, Madagascar, Mauritius, Seychelles, Zambia, 6.The Pacific: A regional agreement with Papua New Guinea and Fiji. I.e. we have only signed agreements with 35 countries out of 76, and services commitments has been taken only by 14 countries!

6. « The voice of the European Service Industries for International Trade Negotiations in Services » Interests of European Services Sectors in EPA Region’s countries  EPA Region’s countries should open services negotiations with the EU in the EPA framework, with the aim a)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. b)To increase the cooperation with European services companies: – Joint-ventures, subsidiaries, branches, back offices, transfers of skills in both ways, etc.  But, What countries have agreed instead 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.”

7. « The voice of the European Service Industries for International Trade Negotiations in Services » EU-GCC (Golf Cooperation Council): (6 countries: Bahrain, Oman, Qatar, Saudi-Arabia, United Arab Emirates)  Suspended, but discussions going on -Very advanced on all elements of the Agreement, including an interesting set of offers in services -Still a couple of open items that need to be finalised. -Blocking issue: Export Taxes - Objective to conclude negotiations as soon as possible - No dates for the next round agreed, consultations expected

8. « The voice of the European Service Industries for International Trade Negotiations in Services » EU-MEDITERRANEAN COUNTRIES: The EU’s Mediterranean partner countries are: Algeria, Egypt, Israel, Jordan, Lebanon, Morocco, Palestinian Authority, Syria, Tunisia: 9 countries Apart from Syria, every Mediterranean country in the Euro-Mediterranean partnership has concluded Association Agreements with the EU.Association Agreements Associated countries enjoy duty free access to the EU market for manufactured goods and preferential treatment for exports of agricultural, processed agricultural and fisheries products. Tariffs will gradually be dismantled for EU exports to the Mediterranean region – the process has already been completed in Tunisia. The objective is to substantially liberalise trade in goods and services between the EU and its Mediterranean partners, who already enjoy very open access to EU services markets. Further progress, including attracting new investment to the region, is being negotiated. Negotiations on services and establishment: Discussions in 2006-2007 took place at regional Euro-Mediterranean format, for a common framework. In 2008, bilateral negotiations started on voluntary basis with Morocco, Egypt, Tunisia and Israel. But apparently at a rather low path!

9. « The voice of the European Service Industries for International Trade Negotiations in Services » Hierarchy of European Business Interests in Trade Negotiations: What EU companies want: 1.WTO DDA 2.Regional Trade Agreements (with Integrated Markets) 3.Bilateral Agreements 4.Autonomous Liberalisation… BUT =>What is happening in the reality: 1.Autonomous Liberalisation 2.FTAs 3.RTAs 4.WTO ?? !!!

10. « The voice of the European Service Industries for International Trade Negotiations in Services » How Services Commitments in WTO or in Regional Trade Agreements can be beneficial for the sustainable economic development, including to IDB Member Countries? By attracting FDI in the services sectors: Experience shows that a services sector foreign investor which invests in a country do stay for a long period. By participating to financing of pension funding, to long term infrastructures’ projects, etc. (enabling infrastructure services), telecom network, energy network, etc. By attracting transfers of expertise and know-how of foreign services suppliers, which will allow services of:  Better quality, increase competitiveness of SMEs,  Better price, Reduce the cost of doing business.  More choice for the consumers

11. « The voice of the European Service Industries for International Trade Negotiations in Services » Pro’s & Con’s of Regional Trade Agreement: +Stronger Regional Integration : To improve the efficiency of services and of investments & to create economies of scale in the Region…A larger market is a more attractive market. (remember the figures of the EU internal trade! 57%) +Investment in Infrastructure services for the benefit of the whole region: Construction of roads, rails, harbours, etc.; Telecommunication network, Financial Services, Express courier, maritime transport, IT, Environmental Services, etc. _Risk of slowing down the ambitions to the lowest level standard of the region -Risk of slowing down the process at the speed of the least interested country in the region

12. « The voice of the European Service Industries for International Trade Negotiations in Services »  Given the lack of progress in most of the Regional Trade Negotiations, the European Services sectors business community prefers now to push for trade negotiations with countries of the willing, and try to agree on far reaching commitments.  Unfortunately for developing countries, it seems that developed countries are more interested (Korea, Canada, Japan, Taiwan, Singapore, …)  We hope that the Mediterranean neighbours will take the current negotiating opportunities to catch up!

13. « The voice of the European Service Industries for International Trade Negotiations in Services » Main barriers to Services liberalisation : Obligation to enter the market through joint venture Limitations on capital ownership Limitations on licences allotted to foreign companies Restrictions on branching, Limitations in doing business in local currency Lack of National Treatment in many services sectors Local employment requirements Long and burdensome administrative procedures Restrictions on real estate access Lack of transparency in domestic regulation (economic needs tests, etc.)

14. « 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) 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, implementation of the regulations) FDI incentives (special zones, tax incentives, etc.) Country Risk: political stability, WTO/Bilateral-Regional Trade agreement sector specific binding commitments, i.e.  The WTO GATS/RTA trade policy negotiated commitments 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.

15. « 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: esf@esf.be Website : www.esf.be