Overview of Services and
Investment in the EPA and
Challenges for Implementation
Ramesh Chaitoo
Head, Services Trade Unit
CRNM - www.crnm.org
rchaitoo@crnm.org
CARIFORUM-EU Business Forum
Barbados, Nov 24-25, 2008
Economic Partnership Agreement
• Comprehensive agreement covering bilateral
trade and investment relationship
• Trade in Goods - tariffs, origin, agriculture, etc.
• Services, Investment, E-commerce
• Trade related issues - sustainable development,
procurement, innovation, etc.
• Dispute settlement & institutional provisions
EU-Cariforum Services Trade Summary
• UK accounted for an average of 33% of services exports
to CARIFORUM between 1999-2003
• UK accounted for an average of 59% of services imports
from CARIFORUM between 1999-2003
– A major proportion of this was due to UK residents traveling to
CARIFORUM countries, especially Barbados and Jamaica
EU Versus UK Services Imports from
CARIFORUM 1999-2003
2,500
2,000
EUROS
MILLIONS
1,500
1,000
500
-
1999
2000
2001
2002
2003 Average
UK SERVICES IMPORTS FROM ALL CARIFORUM
EU SERVICES IMPORTS FROM ALL CARIFORUM
EU Versus UK Services Exports to
CARIFORUM 1999-2003
900
800
700
600
Euros
Millions
500
400
300
200
100
0
1999
2000
2001
2002
2003 Average
UK Services Exports to CARIFORUM
Total EU Services Exports to CARIFORUM
EU Services Imports from CARIFORUM as % Total
Services Imports (Average1999-2003)
Other business
services
9%
Royalties and
licence fees
0%
Personal, cultural
and recreational
services
0%
Government
services, n.i.e.
1%
Undisclosed
14%
Transport
7%
Computer and
information
services
0%
Financial services
1%
Insurance
services
4%
Construction
services
1%
Communication
services
3%
Travel
60%
EU Services Exports to CARIFORUM as % Total
Services Exports (Average1999-2003)
Personal,
cultural and
recreational
services
0%
Undisclosed
18%
Transport
7%
Communication
services
0%
Travel
15%
Government
services, n.i.e.
0%
Other
business
services
34%
Construction
services
7%
Insurance
services
12%
Royalties and
licence fees
0%
Computer and
information
services
3%
Financial
services
4%
Service categories where EU imports
from CARIFORUM exceed exports
(average 1999-2003)
•
•
•
•
Travel
Transport
Communication services
Government services
CARIFORUM
SERVICES
TRADE
SURPLUS
Service categories where EU exports
to CARIFORUM exceed imports
(average 1999-2003)
•
•
•
•
•
•
•
Other business services
Insurance
CARIFORUM
SERVICES
Financial
TRADE
DEFICIT
Construction services
Computer & Information services
Royalties & licence fees
Personal, cultural and recreational
services
Total FDI Flows to Cariforum by Source 1997-2003
Total EU
Total USA
Other/Undisclosed
% Share of Total EU FDI in Cariforum by Source 1997-2003
UK
Spain
France
Dutch
Italy
Germany
Basic Structure of S& I provisions
1. Rules or disciplines on Services &
Investment
2. Market access commitments (Schedules)
3. Protocol on Cultural cooperation
4. Link with other parts of EPA - dispute
settlement, competition, etc.
Key Points
1. Services supplied by government
excluded
2. Subsidies not covered by Agreement
3. Government free to regulate
4. Government procurement not covered
5. Immigration policies & procedures not
covered
Structure of Services & Investment
Title
• Chap 1 - General provisions
• Chap 2 - Commercial Presence
(Investment)
• Chap 3 - Cross Border Supply of services
• Chap 4 - Temporary Presence of Natural
Persons for Business Purpose
• Chap 5 - Regulatory Framework (with
sectoral rules)
Sectoral provisions
• Computer
• Courier
• Telecoms
• Financial services
• Maritime transport
• Tourism
6. E-commerce
7. Cooperation
Investment Interests
• Address the declining interest of EU firms in
Caribbean by a new complete framework
• CF wanted comprehensive Investment
provisions: EC had limited mandate
• Create a regime for investment & trade in EPA
to attract EU & 3rd country firms to CF states
• Eliminate the need to negotiate new bilateral
investment treaties
Investment Rules
1. Market access
2. National Treatment and MFN
3. Excludes - nuclear materials; arms;
audiovisual; cabotage; air traffic rights
4. Forbids corruption by investors
5. Maintains core labour standards
6. Safeguards the environment
7. Forbids lowering of environmental, labour or
occupational health & safety standards to
attract investment
Market Access for investment
1. EC - commitments very broad and deep except
for a few sectors such as energy, health,
education
2. EC - limitations on landholding, and other
restrictions in mainly new Members
3. CF - commitments in manufacturing, mining,
etc but limitations re landholding, type of
corporate entity, SMEs, etc.
4. CF - Reservations in agriculture, forestry,
fishing, mining, food & beverage, furniture, in
some states; Only Dominican Republic
liberalized electricity & gas
Rules on Services
1. Mainly GATS approach
2. National Treatment, MFN
3. Similar exclusions of sectors as investment
chapter
4. Mutual recognition of qualifications
5. Special categories of natural persons for
temporary entry:
– Key personnel (managers, specialists) & graduate
trainees
– Business services sellers
– Contractual services suppliers
– Independent professionals
– Short term visitors for business purposes
Short term visitors for business
purposes
EC and CF states to facilitate temporary
entry for the following activities for up to 90
days:
– Research & design
– Marketing
– Training seminars
– Trade fairs and exhibitions
– Sales & purchasing
– Tourism personnel
Services Market Access Granted
•
•
•
CF - Positive list for services commitments like
GATS template; limited sectoral coverage to
65% of services sectors; Some OECS states
are just about 50%. (Dom Rep is 76 %). Some
opening in the future. Very limited Mode 4
commitments.
EC - Different structure but positive list
Very broad sectoral coverage - more than 90
%; much greater access granted for Mode 4 to
CF suppliers than in WTO; Limitations in new
member states & starting in 2011 & 2014
Tourism
• Rules to prevent anti-competitive
behaviour by large tourism operators
• Support for SMEs
• Cooperate re mutual recognition of tourism
requirements. qualifications, licences
• Development support for training,
standards, environmental management
Cultural Industries
• Major gains - in market access and Cultural
Protocol which provides for collaboration,
support, movement of artists and cultural
practitioners and special provisions for audiovisual collaboration
• 26 EU states granted access for Contractual
Service suppliers in Entertainment services
• First time ever for EC in a sector that is very
sensitive and for which trade commitments are
not normally taken
Entertainment Services
CPC 9619
96191
96192
96193
96194
96195
96199
Entertainment services (other than audio-visual)
Theatrical producer, singer group, band and
orchestra entertainment services
Services provided by authors, composers, sculptors,
entertainers and other individual artists
Ancillary theatrical services n.e.c.
Circus, amusement park and similar attraction
services
Ballroom, discotheque and dance instructor
services
Other entertainment services n.e.c.
Temporary entry access for CF
Contractual Service Suppliers (CSS) in 29
sectors in EU
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
12.
13.
Legal advisory services in respect of international public law and foreign
law
Accounting and bookkeeping services
Taxation advisory services
Architectural services
Urban planning and landscape architecture services
Engineering services
Integrated Engineering services
Medical and dental services
Veterinary services
Midwives services
Services provided by nurses, physiotherapists and paramedical personnel
Computer and related services
Research and development services
Temporary Entry for CSS in EU
14.
15.
16.
17.
18.
19.
20.
21.
22.
23.
24.
25.
26.
27.
28.
29.
Advertising services
Market Research and Opinion Polling
Management consulting services
Services related to management consulting
Technical testing and analysis services
Related scientific and technical consulting services
Maintenance and repair of equipment
Chef de cuisine services
Fashion model services
Translation and interpretation services
Site investigation work
Higher education services (only privately-funded services)
Environmental services
Travel agencies and tour operators' services
Tourist guides services
Entertainment services other than audiovisual services
Access for Independent
Professionals in EU
1.
Legal advisory services in respect of international public law
and foreign law (i.e. non-EU law)
2. Architectural services
3. Urban planning and landscape architecture services
4. Engineering services
5. Integrated Engineering services
6. Computer and related services
7. Research and development services
8. Market Research and Opinion Polling
9. Management consulting services
10. Services related to management consulting
11. Translation and interpretation services
Technical Cooperation
1. Improve ability of CF suppliers to meet
regulations and standards in EU
2. Improve export capacity of CF suppliers
(culture, tourism, SMEs, MRAs)
3. Interaction & dialogue between CF and EC
firms
4. Address quality and standards in CF
5. Develop & implement regulatory regimes
6. Establish mechanisms for promoting
investment & joint ventures
7. Other activities
EPA Implementation and follow up
1. Official/govt process - legislative
or regulatory changes; information
dissemination; support to business
initiatives; seeking and programming
of funding at national and regional
levels
Business side of implementation
• Private sector process - learn about
market access; organize by sector;
interface with Europeans; develop
standards and credentials; position
firms to get contracts by using entry
provisions for business purpose in
EPA
Joint initiatives for services
1. Aid for Trade for services plan
2. Need to develop proposals to get support
under Development Cooptn provisions of
the EPA. Article 121
Professional services
• Have to discuss mutual recognition
regionally in order to have common
position for bilateral discussions with EU
services associations
• Need common standards
• What is status of Profess services regime
in Cbbean (CSME)?
Entertainment services
• Need to understand the provisions and
figure out how to take advantage of them
• Use contacts in UK, Belgium, France,
Guadeloupe, Martinique, etc.
• ICT - CF needs to plug into global value
chains in ICT sector
Animation sector
• Tremendous potential as it is global
industry - outsourcing contracts
• CF would like to develop animators in
Cbbean. Need partners in government and
industry
• Develop animation studios - attract young
people in activities they like