1. Club of Amsterdam The Summit for the Future Amsterdam, 27 th January 2005 Knowledge Stream: The future of trade/services industry « AN INEVITABLE INCREASE IN INTERNATIONAL TRADE IN SERVICES» Pascal Kerneis, Managing Director ESF (European Services Forum) « The voice of the European Service Industries for the GATS negotiations »

2. 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 www.esf.be

3. « The voice of the European Service Industries for the GATS negotiations » AXA BARCLAYS BANK CLIFFORD CHANCE COMMERZBANK DHL FRANCE TELECOM IBM EUROPE LLOYD’S METRO AG PRICEWATERHOUSE- COOPERS ROYAL AHOLD NV SIEMENS AG TELEFONICA TNT TUI VEOLIA ENVIRONMENT VODAFONE ESF MEMBERS INCLUDE: For more information, see www.esf.be

4. « The voice of the European Service Industries for the GATS negotiations » Percentage of GDP by Sector, 2003

5. « The voice of the European Service Industries for the GATS negotiations » The Services sector generates 90% of new jobs in the EU15 The Services sector generates 90% of new jobs in the EU15 Services Agriculture Industry

6. RankCountryTrade Volume ExportsImportsBalance 1USA 229.937119.355110.5828.773 2 Switzerland71.20138.11933.0825.038 3 Japan26.46517.4718.9948.476 4 Norway20.04011.9078.1333.774 5 Canada14.9167.8097.107701 6 Turkey10.5173.0057.512-4.507 7 Hong Kong10.2304.8305.400-570 8 Australia10.2065.6094.5971012 9 China9.8585.2624.496666 10 Russia9.5244.7474.777-29 EU-15 International Trade in Services with non-EU Countries 2002, EUR bn

7. EU-15 International Trade in Services with non-EU Countries in 2002 (EUR bn) RankCountryTrade Volume ExportsImportsBalance 11Singapore9.0744.5534.52132 12South Africa6.5353.5982.937661 13Brazil6.4593.3503.109242 14Korea6.2364.0732.1631.910 15Mexico5.8413.4862.3551.131 16India5.1512.7372.414322 17Egypt4.7471.7093.038-1.329 18Israel4.5482.5342.014519 19Thailand4.0881.3602.728-1.367 20Taiwan3.7252.0001.725274 21Croatia3.5921.3682.224-856 22Morocco3.5321.2982.234-936 23Malaysia3.0911.6571.434222 24Romania2.2899451.344-400 25Indonesia2.1961.1621.034128

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

10. By attracting FDI in infrastructure services: Telecommunications Logistics (transport, distribution, etc.) Energy network Water and waste network Financial services system,etc. Foreign service suppliers make long-term investments in their host countries By knowledge transfer and expertise from foreign services suppliers, which leads to: Higher quality Competitive pricing Wider choice for consumers How can services liberalisation be beneficial to World Trade?

11. The main barriers to services liberalisation are: Limitations on capital ownership Limitations on licences allotted to foreign companies Restrictions on real estate access Local employment requirements Lack of National Treatment in many services sectors Long and burdensome administrative procedures Lack of transparency in domestic regulation on: –Licensing requirements –Qualification requirements, etc. « The voice of the European Service Industries for the GATS negotiations »

12. The current round of GATS Negotiations ought not only improve market access via Commercial Presence Abroad--Mode 3 of the GATS – i.e. joint ventures; subsidiaries; branching, but WTO Members ought to also expect and demand: 1)Commitments for Cross-Border Supply via Mode 1 of the GATS, i.e. selling services without a commercial presence in the consumer’s country— i.e. e-commerce, internet, sending electronic data to call center, fax, back offices, etc. 2)Movement of Natural Persons via Mode 4 of the GATS, i.e. quickly moving skilled business personnel within a company (intra- corporate transferees) and to a company’s clients on a temporary basis IMPROVING CROSS BORDER TRADE AND MOBILITY OF SKILLED PERSONNEL

13. « The voice of the European Service Industries for the GATS negotiations » State of play of the GATS Negotiations + 400 Initial requests EU= 109 49 Initial offers as of December 2004 Next steps: a) Improved offers by May 2005 b) Draft final offers Final negotiations of the DDA: –December 2005 Hong Kong WTO Ministerial? Unlikely. –Mid 2006? End 2007? US TPA deadline?

14. « The voice of the European Service Industries for the GATS negotiations » Preliminary Assessment of non EU Initial Offers: AssessmentCountriesIssues positive (+) or negative (-) AcceptableJapan, Korea, Norway, Switzerland, Liechtenstein Mode 4 (+), Business services (+), Tourism (+), Telecoms (+), Legal services (+), Courier services (+) AverageNew Zealand, Hong-Kong, Panama Mode 4 (+), Business services (+), engineering (+), Postal (+) Financial services (-), DisappointingUS, Australia, Canada, India, Brazil Mode 4 (-), Telecoms (-), Transports (-), Financial services (-), IT(+), Legal services (+)

15. « The voice of the European Service Industries for the GATS negotiations » TRADE IN SERVICES SHOULD ALSO INCREASE WITHIN THE EU 25 Source: Dutch Bureau for Economic Policy Analysis (CPB) – September 2004

16. « The voice of the European Service Industries for the GATS negotiations » TRADE IN SERVICES SHOULD ALSO INCREASE WITHIN THE EU 25 But EU Member States, companies and citizens (consumers and workers) must embrace the Internal “Single” Market to increase the cross-border supply of services between the 25 (27) countries:  Proposal for a Directive on Services in the Internal Market (country of origin principle, cut “red tape”),  Increase competition in the professional services (mutual recognition of diplomas and qualifications, elimination of corporatist rules, etc.)  Improve all aspects of business-related services (ICT, consulting, after-sale services, advertising, etc.)

17. 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. « The voice of the European Service Industries for the GATS negotiations » Website : www.esf.be