The Office of the U.S. Trade Representative on Tuesday signaled its intent to begin negotiating an international services agreement
(ISA) with 20 other nations.
In a letter to Congress, U.S. Trade Representative Ron Kirk said the negotiations would be aimed at promoting international trade in services and supporting increased U.S. service exports and jobs. The 20 nations, along with the United States, represent nearly two-thirds of global trade in services.
Kirk noted in the letter to lawmakers a recent study by the Peterson Institute for International Economics estimated that even though the United States is the world’s largest services trader, tradable services are still five-times less likely to be exported than manufactured products.
“Every $1 billion in U.S. services exports supports an estimated 4,200 U.S. jobs in America,” he wrote. “Service industries employ workers in every congressional district across the United States, and approximately three out of every four American workers nationwide. If business services achieved the same export potential as manufactured goods globally, U.S. exports could increase by as much as $800 billion. To begin to realize this potential, we need to surmount a range of barriers that lock out, constrain, or disrupt the international supply of services. An ambitious, high-standard international services agreement presents a tremendous opportunity to remove these impediments and boost U.S. economic growth and support additional jobs.”
The National Foreign Trade Council (NFTC) welcomed the announcement.
“With services industries accounting for four out of five American jobs and nearly 70 percent of U.S. GDP, expanding services trade through an ISA is central to U.S. economic growth,” said NFTC President Bill Reinsch. “We commend the administration for making this important agreement a priority early in the New Year.”
The United States is the world’s largest services exporter – with exports accounting for about $1.7 trillion annually. In 2011, the United States had a $178.5 billion surplus in services trade worldwide.
UPS, meanwhile, said it also strongly supports the implementation of an ISA, adding that will open new trading opportunities to small and large businesses.
“The American services sector generates more than 75 percent of national economic output and provides 80 percent of the jobs in the country, making it imperative that the U.S. government support commercially meaningful trade agreements that allow U.S. companies to compete on a level playing field in the world marketplace," said Dan Brutto, UPS international president, in a statement.
"Services are the lifeblood of our economy and of global commerce - the indispensable enabler of everything from trade in agriculture and manufacturing to the development and sale of high-tech products," he added. "If you want to make it, move it, buy it, or sell it, you need services - professional, financial, retail services and, of course, the delivery and logistics services to get products to market." - Eric Johnson