Progress coming on International Services Agreement
U.S. trade advocates said Friday they are encouraged by early progress on an International Services Agreement currently being discussed between 47 nations.
The voluntary agreement is intended to align the nations within the framework of the WTO, with a focus on rules and market access for service industries.
Coalition of Service Industries President Peter Allgeier and National Foreign Trade Council Vice President for Global Trade Issues Jake Colvin spoke at an NFTC luncheon April 5 about the positive signs they saw during a trip to Geneva in mid-March.
“The last international agreement on services was 20 years ago,” Allgeier said. “Think about how much has changed, especially in the digital age.”
Allgeier noted the indelible impact on the U.S. and global economies that services have, with 70 percent of the U.S. GDP tied to service industries. The NFTC said that every $1 billion in U.S. service exports supports an estimated 4,200 U.S. jobs.
The countries participating in the ISA discussions, including the United States and EU members, agreed in March to return in June with proposals on rules and market access.
Allgeier said the principal issues are “digital issues” that affect data flows across borders. The discussion will likely center around competitiveness, especially as it relates to private enterprises competing against state-owned enterprises. Allgeier gave an example of express companies competing against state-owned Japan Post.
“There are more state-owned enterprises competing in the field,” he said. “We have to make sure these state-owned service providers don’t have an unfair advantage.”
He also pressed the importance of the agreement on supply chain activities, noting that the participating countries recognized that supply chains are cross-border service entities that underlie nearly every facet of global trade.
“There’s a recognition that you can’t have the manufacturing, and legal, and express industries governed by one set of rules, and the finance governed by another,” Allgeier said. “We should negotiate the chain, not just the pieces of economic activity.”
Notably missing from the discussions, however, are Brazil, India, and China, part of the BRIC bloc. China, with its own burgeoning services industry, is said to be following the discussions closely.
NFTC President Bill Reinsch pointed out that the ISA benefits only apply to those negotiating the agreement, somewhat like a bilateral free trade agreement. Typically, the benefits of global trade frameworks tend to get applied globally (whether a country has participated in negotiations or not) under the most-favored-nation provision. Not so in this case.
“We see people seeking other mechanisms because we aren’t getting anywhere in Doha,” Reinsch said, pointing to ongoing U.S.-EU and Trans-Pacific Partnership talks.
Colvin said he saw those two negotiations, for better or worse, shaping the future of Doha talks. He also said the positive progress on the ISA represented a boost in morale given the poor progress of wider WTO trade negotiations, which have stalled on trade facilitation and agriculture goods access issues.
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