« The voice of the European Service Industries for International Trade Negotiations in Services » The New Economic and Free Trade Agreement between the

« The voice of the European Service Industries for International Trade Negotiations in Services »

The New Economic and Free Trade Agreement between the EU and Canada

“The Opportunities from a EU-Canada FTA

for the EU Services Sectors”

Pascal Kerneis

Managing Director

ESF (European Services Forum)


Content

1. The European Services Forum

2. The significance of services to the world economy and world trade

3. EU- Canada trade – Share of Services

4. What does ESF expect from the EU-Canada FTA?


ESF covers the majority of European services sectors that export or do business outside the EU:

• 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 TransportBut no members in Education

or Health services

For more information, see www.esf.be


ESF Members include:


Services; 26

Agriculture

; 7

Manufacturing

Goods; 67

Services Share of World Trade – 2007 - %

The Services sector generates 90% of new jobs in the EU15

Services

Agriculture

Industry


World Economy:Percentage of GDP by Sector, 2007


Trends in World Trade in Services

050

100150200250300350400450

2003 2004 2005 2006


International Trade in Services

28.9% 42.2%


Rank Country Trade Volume

Exports Imports Balance

1 USA 266 852 139 135 127 717 11 417

2 Switzerland 105 490 61 503 43 987 17 516

3 Japan 33 183 19 378 13 805 5 573

6 China 31 535 17 766 13 769 3 996

4 Russia 31 268 19 238 12 030 7 208

5 Norway 30 920 19 008 11 912 7 096

7 Canada 21 343 11 695 9 648 2 047

8 Singapore 18 530 11 397 7 133 4 264

9 Turkey 18 517 6 617 11 900 -5 282

10 Australia 17 031 10 747 6 284 4 463

EU-27 International Trade in Services with non-EU Countries 2007, EUR bn


Trade between Member States exceeds Extra-EU trade

Source: Eurostat TOTAL EXPORT (intra + extra: 1178.1 Bio €)

€ 679.6bn

€ 498.5bn


What does FDI include?

• FDI Capital Flows• FDI income• FDI stocks in a

country at the end of the year

0

500

1000

1500

2000

2500

2003 2004 2005

Total Extra EUoutward flowsTotal Extra EUFDI IncomeTotal Extra EUAssets


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;


EU-Canada Trade - Share of services(2006 - € Bn)

Total Trade Volume 62.2

Total Trade Vol. Ser. 16.0

EU Goods Exports 26.6

EU Goods Imports 19.6

Balance 7

EU Services Exports 8.5

EU Services Imports 7.5

Balance 1

24%

27.7%

2005 2006 2007Outflows 11.9 4.9% 31.1 9.8% 42.9 8.9%

Inflows 8.0 6.2% 10.6 5.3% 10.3 2.8%

EU FDI Flows 2005 -2007 with Canada

If 65% outflows in services = 55,8 € Bn in 3 yearsIf 86% inflows in services = 24.8 € Bn in 3 years


WHAT DOES ESF EXPECTS FROM THESE FTA NEGOTIATIONS (1)

• Removal of FDI restrictions in non sensitive sectors (energy, telecommunications, transport)

• Openness of the automotive insurance sector• Improve access to Canada’s procurement market

(beyond federal level, extension of coverage to include procurement in public services space like health, education, IT, etc.)

• Improvement of Mode 4 access at provincial level• Singing of Mutual Recognition Agreements of diplomas

and qualifications in professional services



• GATS + • DDA + • NAFTA + or NAFTA Parity ! ?• Regulatory Cooperation Dialogue • Early Warning Mechanism • Regulatory alert system • Prior consultation with business community



ESF Preliminary Assessment of Canada’s Revised Offer• A rather weak offer, Lack of leadership A weak offer in the GATS negotiations reflects negatively on

Canada’s image as an open global trading partner. Canada’s offer remains weak in many important services sectors, like Financial Services, Distribution services, postal & courier services, etc.

• Lack of clear-cut new commitmentsThe revised offer does not cover many services sectors. The EU’s requests to the Canadian negotiators - reflecting the requests of the European services industry - have been largely ignored.


WHAT DOES ESF EXPECTS FROM THESE FTA NEGOTIATIONS (4)ESF Preliminary Assessment of Canada’s Revised Offer

1. Horizontal Commitments: Good offer in Mode 42. Professional Services: Very little3. Other Business Services: Disappointing offer4. Postal and courier Services: Very little new5. Telecommunications: Very little new6. Construction: Acceptable offer7. Distribution Services: Disappointing offer8. Environmental Services: Disappointing offer9. Financial Services: Very disappointing offer10. Tourism and Travel-related Services: Very little11. News Agency Services: No offer12. Transport Services: Disappointing offer13. Energy Related Services: No offer – Bad Offer


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]

www.esf.be

Documents

« The voice of the European Service Industries for International Trade Negotiations in Services » The New Economic and Free Trade Agreement between the