BUILDING AN EGYPTIAN
SERVICES COALITION
This publication was produced for review by the United States Agency for
International Development. It was prepared by the USAID-funded TAPR II project in
collaboration with the USAID-funded Trade Related Assistance Center (TRAC) at the
American Chamber of Commerce in Egypt.
BUILDING AN EGYPTIAN
SERVICES COALITION
TECHNICAL ASSISTANCE FOR POLICY REFORM II
CONTRACT NUMBER: 263-C-00-05-00063-00
BEARINGPOINT, INC.
USAID/EGYPT POLICY AND PRIVATE SECTOR
OFFICE
AUTHORS: VICTORIA WAITE (NATHAN ASSOCIATES)
RICHARD SELF
SO 16
DISCLAIMER:
The author’s views expressed in this publication do not necessarily
reflect the views of the United States Agency for International
Development or the United States Government.
Contents
Executive Summary
v
Introduction
1
Coalition Objectives
3
Value-added aspects for the private sector
3
Value-added aspects for the Government of Egypt
4
Coalition Activities
7
Manage relationships among the membership and with public officials
7
Establish subgroups to address specific issues and sectors
7
Build knowledge and understanding on services issues
8
Develop trade barriers lists
8
Collaborate with global services organizations
8
Challenges in the Creation of a Services Coalition
9
Addressing procedural challenges
9
Competing business associations
10
Tackling issues related to sensitive sectors
10
Assuring broad participation in Government consultations
10
Services Coalitions Worldwide
13
New association or entity
13
Partnership with an existing entity
14
Combined Government and Private Sector Initiative
15
Donor Initiated
16
Establishing a Services Coalition in Egypt
Next steps
References
17
19
21
Executive Summary
As trade in services continue to exhibit steady growth rates in the global economy, more and
more developing countries are realizing the important role the services sectors play in their
economic development and are including services to further deepen their economic
integration into the world marketplace. This is evident by the increasing number of
developing countries currently negotiating binding services provisions in regional and
bilateral trade agreements, and includes, inter alia, European-Mediterranean Partnership
Agreement, COMESA, GAFTA, SADC, and ASEAN. While trade negotiations are
Government to Government proceedings, the private sector also has a considerable stake in
the development and expansion of the services sector, particularly as the implications of trade
agreements can have both direct and indirect impact across the economy. In several
developing and developed countries, private sector services firms have chosen to formalize
their services sector advocacy efforts by establishing umbrella associations dedicated to
advancing the services sector’s trade-related interests both domestically and abroad.
Currently, Egypt finds itself in a situation in which comprehensive private sector input on
trade in services issues does not exist. The services sector in Egypt accounts for large
percentages of its GDP and overall workforce, in addition to spanning a wide range of
services, from tourism to port facilities, from telecommunications to construction services,
and from Arabic movie and television programming to financial services, among others. The
Government is involved in multiple trade negotiations that encompass services components,
and the private sector is in the best position to advise the Government on issues affecting their
sector. Moreover, Egyptian service providers have a stake in the outcome of trade
negotiations and other policies affecting their sectors. In order to organize their efforts as an
industry group, the Egyptian services sector is in the process of developing a plan to establish
an Egyptian services coalition.
The objective of the Egyptian services coalition is twofold: 1) for trade negotiation purposes;
and 2) for internal competitiveness purposes and regulatory reform. The private sector needs
to better communicate its trade negotiation and export market interests to Government
officials and can provide analysis and input on existing policies that do not meet the needs of
the services sector, identify policies that inhibit growth or serve as obstacles to exporting,
formulate the right policies to enhance services trade, and help facilitate better access to
knowledge and information on services. In addition, the Egyptian services coalition would
work to bridge the internal gap between services providers through an internal dialogue; push
for regulatory reform in key sectors, while developing relationships with relevant regulatory
bodies and Syndicates to facilitate dialogue among all stakeholders; and strongly encourage
the Government to improve services data.
Although services coalitions tend to focus on activities related to trade negotiations or export
market interests, they also serve to accomplish a number of important initiatives at home. For
VI
BUILDING AN EGYPTIAN SERVICES COALITION
example, initial activities of the Egyptian services coalition could consist of advocating for
regulatory reform, including the publication of all regulations affecting services sectors;
pushing for improved services data, including through sectoral surveys and improved data
collection by the Central Bank and CAPMAS; raising awareness of services sectors and
issues constraining their competitiveness; guiding Government efforts to attract investment in
specific sectors; and making services competitiveness the center of the country’s
competitiveness drive.
There are several challenges that Egypt will likely face as they move forward in establishing a
unified forum for its service industries. First, it must find a capable, dynamic leader to act as
the Chairperson of the entity. This is extremely important as the Chairperson has the
capability of raising the services coalition to a visible stature both within the Government and
in the private sector. The coalition will need to engage in an aggressive public awareness
campaign that highlights the very specific objectives of the coalition, which will primarily
focus on macro level trade in services issues, and therefore, will not impede upon the territory
of sector specific trade associations. In fact, in many countries, sector specific trade
associations can play an active role in the umbrella services coalition and reach out to an even
broader group of stakeholders.
In recent years, a number of developing countries have formed their own services coalitions
from which Egypt can learn from, and there are several developed country services coalitions
as well. Typically, services coalitions tend to develop into a brand new association as in the
United States; as part of an existing association as is the experience in Hong Kong, Chile, and
Malaysia; or in collaboration with the Government as is the case in Trinidad and Tobago and
Barbados. And in Uganda, the Uganda Services Exporter’s Association was initiated by the
donor community. Each example can provide valuable information for Egypt to consider as it
moves forward in realizing its services coalition.
Finally, Egypt already has a critical mass of interested services sectors. It should not worry
about the structure at this point, but it needs to take advantage of this current momentum and
organize activities for potential membership to demonstrate the strength and utility of a
services coalition. At the same time, a concrete proposal should be presented to the Minister
of Trade and Industry to solicit Government support and buy-in, which is also a critical aspect
of ensuring a successful outcome and future work program for the services coalition.
Introduction
In July 2006 at a one-day Trade Related Assistance Center (TRAC) seminar entitled “Trade in
Services: Egypt’s Experiences”, the group recommended the creation of an Egyptian
Coalition of Service Industries with the objective to develop a private sector led industry
group dedicated to addressing trade in services issues in Egypt. This short paper 1) outlines
the primary objectives of a services coalition; 2) lists the types of activities that could be
promulgated on a day-to-day basis; 3) addresses challenges to establishing such an entity, and
particularly in Egypt; 4) describes developing country experiences in organizing services
coalitions; and 5) concludes with a general elements to establishing a services coalition.
The growing importance of trade in services cannot be ignored. In 2005, global exports of
commercial services1 totaled $2.42 trillion, registering a 10 percent annual increase from
$2.19 trillion in 2004. Services were first introduced in trade negotiations at the launch of the
GATT Uruguay Round in 1986. Such an initiative was the direct result of service industry
organization and pressure from groups in the United States and Europe. Services are now part
of almost every multilateral, regional, and bilateral trade negotiation.
With a population of approximately 70 million, services in the Egyptian economy accounted
for over 50 percent of the GDP and 54 percent of the workforce in 2004. Moreover, services
are being traded on a larger scale, propelled by modern technologies, such as the Internet, and
more open foreign investment regimes. Thus, the stakes are huge for Egyptian services
providers, many of whom have strategic export interests or otherwise face increasing
competition from abroad. For all of the private sector entities devoted to agriculture and
manufactures, there is no group that focuses solely on trade-related issues affecting the
services sectors in Egypt.
Egyptian service providers need to build upon the current momentum generated by the
TRAC-organized roundtable discussions in January and April and move forward to establish
an Egyptian services coalition. Egypt is an active member in the World Trade Organization
(WTO), representing the developing country perspective, and has become a demandeur in the
Doha multilateral negotiations. Concurrently, Egypt is expanding its own trade policy agenda
to include regional trade in services negotiations in COMESA and GAFTA, and the European
Union Economic Partnership Agreement. It is imperative that the services sector organize
itself in a manner that ensures its ability to uphold its own interests in Egypt while promoting
its wellbeing in other markets. The services sector must understand its rights and obligations
so that it can take advantage of the very trade agreements its Government is negotiating on its
1
Commercial services are defined as transportation, travel, and other commercial services. Other
commercial services include: communication services, construction services, insurance services,
financial services, computer and information services, royalties and license fees, other business
services, and personal, cultural, and recreational services. WTO, 2006.
2
BUILDING AN EGYPTIAN SERVICES COALITION
behalf. At the same time, a services coalition presents a crucial opportunity for the private
sector to build its own capacity and knowledge on trade in services issues by engaging in
activities that examine specific aspects of the services sector in the Egyptian economy while
enhancing public awareness in general.
In the following sections, coalition objectives, potential activities, and challenges will be
addressed, followed by a discussion of examples of services coalition worldwide, and
concluding with key elements to creating a services coalition in Egypt.
Coalition Objectives
A service coalition (or coalition of service industries) is an umbrella organization that brings
service providers and associations together to represent a collective voice on, among other
things, commercial policies and export promotion issues. While goals can vary from country
to country, one primary objective of a services coalition is to organize the private sector so
that it can better communicate its trade negotiating and export market interests to Government
officials. By identifying and defining issues of common interest among members and working
together through a unified voice and consensus building, a services coalition can have an
impact on how trade issues are addressed within the Government and its regulatory agencies.
Other important objectives include:

Advocacy. Services coalitions advocate on behalf of their membership, especially
when there is a need to advise the government about 1) existing policies that do not
meet the needs of the services sector; 2) policies that inhibit growth or serve as
obstacles to exporting; and 3) formulating the right policies to enhance services trade.
Reaching out with a harmonized voice is an effective way to influence policy
decisions and to better inform the government, the private sector, NGO’s, and civil
society of the types of issues that concern the coalition. Governments are more likely
to respond to a united voice that represents a dynamic and cross cutting section of its
economy, than a single company or an individual. In addition, services coalitions
have the capability to develop and maintain relationships at different levels in
Government Ministries (e.g., Minister, Undersecretaries, Department Managers, etc.),
which is key to facilitating successful private-public sector communication.

Better access to services sector knowledge and information. Services coalitions
are resources of information for their membership. They establish internal (i.e.,
membership-oriented) and external (other services coalitions) networks that
communicate and share information about what is occurring domestically and
internationally. This is particularly important in trade negotiations, where there are a
multitude of services issues over which the industry has a strategic interest. Sharing
knowledge and information will benefit coalition members as a whole. For example,
members can assemble data on barriers they face when operating in other markets
that negatively impact the ability to provide inexpensive, efficient, and quality
services to international clients.
VALUE-ADDED ASPECTS FOR THE PRIVATE SECTOR
Service providers are busy running the day-to-day business and may not be aware of the
trade-related policies affecting their sectors, nor can they always dedicate the time to research
and monitor the activities of the government as it formulates negotiating positions that will
affect the welfare of Egypt’s services industries. A services coalition can provide a focal point
4
BUILDING AN EGYPTIAN SERVICES COALITION
for identifying any problems the industry may have with the Government’s positions and
proposals affecting services. It can form specific responses to the Government that will
improve or otherwise facilitate the interests of the industry. It also serves as a convenient,
central point for the Ministry of Trade and Industry (MTI) to consult with the services
industries as it encounters new issues in negotiating services provisions with other countries.
The coalition management would assume the role of coordinating with the affected services
companies and forming an initiative based on the more informed views of persons and
companies who are experienced in doing business under specific regulatory regimes. In the
final analysis, no government can effectively formulate a negotiating agenda for a set of
sectors as diverse and inherently complicated as the services sectors without the practical
knowledge and experience that services providers themselves bring to the equation. It is the
services providers who fully understand the most egregious regulatory restrictions and who
are in the best position to help set the Government’s negotiating priorities.
VALUE-ADDED ASPECTS FOR THE GOVERNMENT OF EGYPT
Although a services coalition initiative should be organized and managed by the private
sector, the value that such an organization can bring to the government is quite significant,
particularly for MTI. MTI is responsible for formulating, negotiating, and implementing
international trade policy, including trade negotiations covering a broad range of issues, inter
alia, manufactured goods, agricultural products, textiles and apparel, services, intellectual
property rights, and technical barriers to trade. It is impossible for trade negotiators to be
technical experts in each of the areas of negotiation. They must rely on colleagues in other
government Ministries, regulatory agencies as well as the private sector for input and
knowledge. With the services sector, it is even more complicated because services encompass
a wide range of economic activities, differing forms and degrees of regulation (i.e., virtually
none to heavily regulated), and an operating climate where barriers are engrained in legal and
regulatory measures. Regulatory responsibility is borne by numerous ministries and
regulatory bodies. Inevitably, different regulatory measures and philosophies govern the
services sectors, in contrast to goods, which are usually governed by a single instrument of
protection, the tariff, to address foreign entry at the border.
Egypt is engaged in a number of trade negotiations, nearly all of which have or will have
provisions covering the services sectors. To accurately represent Egypt’s services sectors,
MTI must engage those who are in the best position to know the intricacies of measures
affecting services sector, in particular those government laws and regulations that may be the
object of requests by trading partners demanding their removal or change. To manage these
issues, the negotiators ordinarily rely on two sources: the regulatory body or Ministry
responsible at the government level, and the private sector itself. While the government
regulatory body or Ministry is able to provide expertise and knowledge on domestic laws,
regulations, decrees, measures, etc. affecting the relevant services sectors, the private sector
can advise on how domestic commercial policies (good and bad) affect their businesses as
well as inform MTI about trade barriers that act as impediments in important export markets.
In addition, the services coalition (i.e., private sector) can interact with independent regulatory
bodies (e.g., Syndicates) and/or other entities to access the right individuals within an
organization. Inevitably, there are differences of opinion between trade negotiators and
ministries and regulators responsible for a service sector, especially where the regulator fears
that its own prerogatives are being undermined by a trade negotiation. (In some instances,
such as financial services, the Finance Ministry may have the negotiating lead.) The private
COALITION OBJECTIVES
5
sector can help bridge these differences, using its frequent relationship with the regulatory
body to point out the larger objectives of commercial policy that are at stake in a negotiation,
and the overall welfare of the service itself. Or, they can help explain why the position of the
regulator is important to preserve in such a negotiation.
Coalition Activities
There is a wide range of activities that services coalitions can engage in to meet the needs of
their membership. The following illustrative list includes management, public outreach,
information dissemination, and other activities.
MANAGE RELATIONSHIPS AMONG THE MEMBERSHIP AND
WITH PUBLIC OFFICIALS
For all of the economic diversity in the services sectors, there are common points of view that
can and should be established. For instance, supporting a transparent system of publishing
regulations is something that each member can support. Building collective positions
facilitates stronger relationships among the membership, and this helps to establish common
priorities and strategies for the coalition. The coalition staff, as well as representatives of
individual members, is responsible for reaching out to their constituency to facilitate dialogue
and build consensus on official coalition position papers and letters. It is also important that
they disseminate information to keep members abreast of current events in the services sector.
Senior management will be essential to connecting with members and helping to develop
ideas that will form the foundation of the coalition’s work as well as to hold meetings, where
appropriate, with more senior government officials on particular issues. Unavoidably, there
will be differences of opinion about liberalization in a particular sector. It is important,
however, for the membership to understand these differences so that they can be managed
when presenting a position to the Government.
In addition to managing relationships with members, a critical responsibility of a services
coalition is to maintain relationships with public officials in relevant Ministries and regulatory
agencies, facilitating better coordination and dialogue on issues that involve MTI, other
government ministries and regulatory bodies, and coalition members. In several cases, it is the
coalition that brings these two groups together. For example, when a trade negotiator needs
input from the private sector, he/she can call the services coalition and request a meeting with
its membership. This is also a more efficient way of conducting business as it reaches a broad
range of private sector stakeholders, or when necessary, to gain the position of representatives
of an individual service sector. This also helps to guarantee a certain amount of policy
ownership by both parties.
ESTABLISH SUBGROUPS TO ADDRESS SPECIFIC ISSUES
AND SECTORS
Services coalitions often formulate working groups according to a specific sector (e.g., a
Financial Services Working Group or Legal Services Working Group) or a horizontal/cross-
8
BUILDING AN EGYPTIAN SERVICES COALITION
cutting topic (e.g., a Mode 42 Working Group or GAFTA Negotiations Working Group)
issues. Meetings are organized to discuss and define the issue by the industry (i.e., members)
experts, develop consensus driven positions, and devise a strategy for advocacy. Working
groups are key to facilitating the work of the coalition because they organize the topics and
allow members with particular interests to focus their time and energy. In addition to
meetings, emails are just as important to keep the Working Group members updated on
issues, and can also help facilitate the consensus building process.
BUILD KNOWLEDGE AND UNDERSTANDING ON SERVICES
ISSUES
The concept of trading a service is still relatively new to the public, especially the linkages to
trade agreements. A coalition can focus outreach to academia, policy experts, think tanks,
media, and similar outlets so that there is a broader understanding in the public for the role
these sectors play in economic growth, development, and in international relations. Joint
initiatives can be undertaken to conduct a program of research in think tanks or academic
institutions that will explore in greater depth the role these sectors play in the Egyptian
economy. These efforts become tools to public outreach, where eminent persons and
journalists address the important role that services plays in Egypt’s economy and its role in
the international economy.
DEVELOP TRADE BARRIERS LISTS
Trade negotiators need help in having a full inventory of trade barriers their industries face in
doing business abroad. The coalition can help form this list and present foreign trade barriers
with a sufficient amount of detail (including foreign regulatory provisions) so that negotiators
are comfortable with putting forward their list of problems to counterparts in other countries.
Industry cannot count on the Government to have all of the information it needs to negotiate
away foreign obstacles to doing business. It must take the initiative to prepare all of the
necessary information. A coalition can serve as a point of coordination and assistance in
putting such an inventory together.
COLLABORATE WITH GLOBAL SERVICES ORGANIZATIONS
There are several services coalitions around the world and many of them work in partnership
to develop statements and press releases that reinforce their mutual objectives. For example,
ten different services coalitions released a joint press statement in February 2007 calling for
progress in services to be made in the Doha Round of trade negotiations if the overall
outcome is to receive the support of the Global Services Coalition. Another example of
collaboration is that the Global Services Network tends to organize services related activities
in Geneva and at WTO Ministerials to demonstrate and reiterate the importance of services
sector in the global economy and to meet with key officials for updates on negotiations.
Mode 4 is a term used in the WTO’s General Agreement on Trade in Services (GATS) that
describes the supply of a service through the presence of natural persons, i.e., when the service provider
travels to the host country to deliver the service, or in other words, the movement of labor.
2
Challenges in the Creation of a
Services Coalition
Establishing a services coalition is never a simple task. For developing countries, it is even
more difficult because of the number of procedural and substantive challenges it must first
overcome. It is easy to talk to services providers to gauge their interest and discuss the value
of forming such an entity. The more daunting task for developing countries is to 1) discover a
way to build the financial soundness of a services entity as stakeholders tend to have limited
access to monetary funds; 2) build awareness in an economy that has a host of other worries,
and may not fully understand nor appreciate the role of the services sector in their economy;
and 3) manage issues to reach and address the members concerns in a way that every firm or
association recognizes the utility of the coalition.
ADDRESSING PROCEDURAL CHALLENGES
Initial start-up can pose the biggest obstacle as proponents must address decisions related to
the structural formation, financial sustainability, and competent leadership. First, there must
be a cross-section of companies who share a common interest in furthering their position in
other markets and protecting their own interests at home. This includes a willingness to offer
the time of company officials to participate in meetings that address these issues and to form
creative approaches that represent the common needs of the participating industries. This
includes, of course, an interest to engage the Government on these issues, which is not always
a simple task. It also requires some patience, as some issues of greater strategic interest to
other participants can become a large part of the agenda. Second, an effective coalition needs
to have a strong Chairman; someone with stature and a commitment to the effort so that the
membership has direction, zeal, and a collaborative environment. Third, funding the coalition
may also be an issue; whether to hire full or part-time staff or otherwise pay for the
administrative expenses associated with holding meetings and publishing positions.
There is no question that Egypt needs to organize its services sectors, but it should do so
while taking into account its unique socioeconomic culture. Sustainability, both at an activity
level and a financial level, will be an issue if careful attention is not paid to the eventual
structural organization of the services entity and its ability to meet the needs of all of its
membership. As Egyptian services stakeholders begin to identify and prioritize their needs,
they should also be able to determine to what degree services related issues are important.
Developing an organizational structure can take place over time, allowing the services
coalition to evolve with its membership and cross-cutting and sectoral issues.
10
BUILDING AN EGYPTIAN SERVICES COALITION
COMPETING BUSINESS ASSOCIATIONS
Often times business associations are more broadly focused (e.g., Chambers of Commerce or
the Federation of Egyptian Industries) or concentrate on sector specific issues (e.g., tourism,
banking, or telecommunications). However, these types of business/trade associations and an
umbrella services coalition need not be mutually exclusive. In fact, almost all services
coalitions in other countries include sector specific business/trade associations in their
membership structure, which can expand the outreach to a broader audience. Respective
relationships and roles of associations must inevitably be reconciled, but what is clear is that
there is no business association in Egypt that is devoted exclusively to a cross-section of
services industries alone.
In addition, it is important to keep in mind that sector specific business/trade associations
usually tend to address the “micro” issues affecting their sectors, while an umbrella services
organization will focus more on the “macro” interests of its membership, including trade in
services negotiations, identifying domestic and international obstacles inhibiting growth in the
Egyptian services sectors, advocating for regulatory reform in services sectors, and raising
awareness about the services sector generally and its competitiveness both domestically and
abroad.
TACKLING ISSUES RELATED TO SENSITIVE SECTORS
Every country has to deal with addressing sensitive trade-related issues, especially as trading
partners put pressure on the Government to liberalize and/or reform sensitive sectors and open
them up to competition. Service industries are no different. This may lead to different
positions among coalition members, as some members seeking open markets feel that
protectionism in other sectors impedes their objectives. A coalition may not be capable of
breaching such fundamental differences, but it can work in concert to help manage such
issues that minimizes damage to other services sectors. In any event, it is critical that there is
full information and understanding among the membership about problems facing a particular
sector. Communication among the membership is critical in these situations.
A services coalition can also serve to create a dialogue with other service sector entities, e.g.,
the Syndicates, which may not wish to support the objectives of a services coalition. For
example, the coalition could establish a dialogue with the Lawyers’ Syndicate to discuss their
respective views on the sector in Egypt and perhaps engage in a broader undertaking of
informing the Syndicate’s constituency about the WTO and the GATS to explain the
intricacies of the Agreement, how legal services fits within the scope of the Agreement, and
how making commitments (or not) could potentially affect the Egyptian legal services sector.
This kind of dialogue does not obligate anyone to do anything, but it does build awareness on
the issues facing the Government and the sector as well as provide an opportunity for
constructive discussions among all stakeholders.
ASSURING BROAD PARTICIPATION IN GOVERNMENT
CONSULTATIONS
While Egypt does have a sub-committee on trade in services as part of the High National
Committee, it represents a limited number of service providers and most likely only the
largest firms. A services coalition helps assure that a more expansive range of companies that
make up the Egyptian services economy contribute to its Government’s trade negotiating
position. No formal Government consultative mechanism can assure this level of
CHALLENGES IN THE CREATION OF A COALITION
participation. A well organized coalition, that has combined its energies and creativity in
putting forward complete and relevant information to the Government, can best assure a
stronger Government position on services at the negotiating table.
11
Services Coalitions Worldwide
Services coalitions around the world provide different examples of various ways to organize a
services coalition. As we will see below, some services coalitions have started out on a more
informal basis to allow time to develop relationships with potential members and to build
awareness on the value of such an entity within the services community while others
established a formal structure from the beginning.
Exhibit 1
Coalitions of Services Industries Worldwide
National Services Coalitions

US Coalition of Service Industries

HK Coalition of Service Industries

European Services Forum

Australian Services Roundtable

International Financial Services, London

Japanese Services Network (Keidanren)

Irish Coalition of Service Industries

South Asian Service Industries Forum (India)

NASSCOM (India, software industry)

Argentina Coalition of Service Industries

Chilean Coalition of Service Exporters

Canadian Coalition of Service Industries

Ugandan Services Exporters’ Association

Guyana Coalition of Service Providers

Antigua and Barbuda Coalition of Service
Industries

Trinidad & Tobago Coalition of Services
Industries

Barbados Coalition of Service Industries

St. Lucia Coalition of Service Industries

Coalition of Service Industries Malaysia
Multilateral and Regional Services Coalitions

Global Services Network

REDSERV (Americas)

Global Services Coalition

Financial Leaders Group (FLG)

Caribbean Coalition of Service Industries
Network
NEW ASSOCIATION OR ENTITY
Establishing a brand new association will involve the greatest degree of effort from the
private sector because the coalition will be built from the bottom up. This process is probably
the most time consuming, particularly for developing countries, and services firms and
associations tend to struggle with the start-up activities. But it also affords the organization
the ability to start from a clean palette and mold the institution to meet the interests and needs
of stakeholders.
14
BUILDING AN EGYPTIAN SERVICES COALITION
The U.S. Coalition of Service Industries (CSI) was formed in 1982 solely by the initiative of
private sector services firms that believed services had a stake in trade negotiations and
belonged on the multilateral trade agenda. CSI started out as a relatively small organization
with minimal staff representing a small group of services providers. CSI has fluctuated in size
through the years (in membership and staff), but has grown significantly since the early 80’s
to include a diverse membership of services sectors at both the firm and the association level.
Today, CSI has seven staff that manage activities; a Board of Directors that includes senior
officers (e.g., President or CFO) from member companies; and, primarily operates through
working groups that have either a sectoral focus (e.g., financial services, logistics, and legal
services) or a functional focus (e.g., China, tax, and services trade and investment
negotiations). CSI members pay annual dues, which vary depending on the level of
participation or affiliation.
PARTNERSHIP WITH AN EXISTING ENTITY
In some cases, the most efficient way to launch a services coalition is to establish a committee
or task force within an existing chamber of commerce or other business association. By doing
so, champions of services issues can take advantage of the pre-existing economies of scale
within in the chamber/association as well as utilize resources and staff to 1) help build
awareness and capacity on services issues among all stakeholders (including non-members),
and 2) take time to develop the eventual structure, membership and work program without
feeling immediate pressures related to sustainability and financing.
Hong Kong has evolved into a services-oriented economy, i.e., 96.4 percent of GDP (2004)
and 94.4 percent of the workforce (2005).3 The Hong Kong Coalition of Service Industries
(HKCSI) was formed in 1990 by the Hong Kong General Chamber of Commerce and
currently represents more than 50 service sectors as the Chamber’s services policy think tank.
HKCSI is organized into committees: the executive committee and four advisory committees
that address issues specific to that sector (i.e., Financial Services Committee, Travel/Tourism
Committee, Real Estate Committee, and Information Services Committee). The committees
hold regular meetings to discuss issues and make recommendations. Each committee has its
own terms of reference and is chaired by a HKCSI member who has expertise in that
particular field. HKCSI’s activities are designed to undertake a wide range of activities and
events to promote the services sector locally and internationally; to conduct research projects
and studies on the development of the Hong Kong economy and services sectors; and to
publish a quarterly newsletter “Hong Kong: The Servicing Economy,” an annual publication
Hong Kong’s Yearly Services Statistics, as well as other publications on specific topics.
HKCSI is also an active player in the global services arena, frequently participating in
activities with other CSI-like organizations in Europe, the Americas and the Asia-Pacific.
In Chile, the Coalición de Exportadores de Servicios (CES) was created in 1996,4 and started
in line with the beginning of the negotiations on services between Chile and Canada. The
Santiago Chamber of Commerce (CCS) was invited along with other associations (mainly
from the professional services, banking, software and telecommunications sectors) to the
negotiations. Today, CES operates as a factual association, i.e., its members do not pay an
annual fee to participate in CES activities. While supported by the Chilean Government, it
3
These percentages include construction and utilities services.
4
CES’s original name was "Comité de Exportadores de Servicios" (Service Exporters Committee).
SERVICES COALITIONS WORLDWIDE
15
does not participate in the financing of these activities. There are, though, some activities that
are co-funded between the CCS and the public sector entity in charge of the exports
promotion (ProChile). The CCS Research Department is in charge of the CES permanent
secretary office, which manages the daily activities of the Coalition.
The Coalition of Service Industries Malaysia (CSIM) was launched in June 2007 as an
unincorporated independent forum of interested services associations. It was recognized that
the Malaysian services sector has remained relatively closed when compared to the
manufacturing sector, and, furthermore identified the necessity of liberalizing the sector if
future growth is to be realized. The 2006 Malaysian Third Industrial Master Plan (IMP3) has
targeted the Malaysian services sector setting growth rate objectives of 7.5 percent per annum
(2006-2010) and contribute 59.7 percent to GDP by 2020. To accomplish these goals, the
IMP3 identifies the need to establish services related forums, specifically the Malaysian
Logistics Council (MLC) and the Malaysian Services Development Council (MSDC), both
comprising private and public sector representatives, as well as a need for a private sector
umbrella organization for the services sectors. The Malaysian International Chamber of
Commerce and Industry (MICCI) has taken the lead to initiate, launch and support a platform
for the services sector, forming CSIM. CSIM membership consists only of sector-centric
associations. The reasoning behind this approach is to focus on the value that CSIM can
provide to participants by acting as a supporting organization that supplements/focuses on a
very specific mandate that reaches across all services sectors. In other words, MICCI is
sensitive to the fact that it did not want others to view CSIM as an extension of MICCI or that
CSIM would take away the individual authority of the existing associations. CSIM meets on a
monthly basis and there are no annual fees at this point.
COMBINED GOVERNMENT AND PRIVATE SECTOR INITIATIVE
There are examples where association building is a joint public-private sector initiative.
Funding from the Government may vary depending on the country, but this type of
collaboration also demonstrates the Government’s confidence in the utility of a services
coalition.
Trinidad and Tobago is a semi-rich oil state with energy and gas reserves. Traditionally, the
economy has focused on the energy and manufacturing sectors, but is now looking to
diversify the economy as energy may become more of an uncertain (i.e., scarce) resource in
the future. In August 2006, the Trinidad and Tobago Coalition of Service Industries (TTCSI)
was formally launched by the Prime Minister of the Republic of Trinidad and Tobago. Both
the private and public sectors were involved in the actual development of TTCSI. A task force
was formed to develop a constitution, perform the necessary outreach to stakeholders as well
as develop a business plan and a strategy to become sustainable over the next four years.
TTCSI is a private limited liability company that will receive funding from the Government
for the first three years, which also plays a coordinating role. Currently members pay a one
time ‘token’ amount which is based off of each associations net surplus (allowing the smaller
associations to participate), and in the following years, members will pay an annual
subscription based on the same methodology (net surplus). TTCSI was established as a
coalition of services associations (instead of individual firms) to ensure that TTCSI does not
compete with other associations. If firms have a trade or export-related issues that they would
like addressed within TTCSI, it must be initiated through their association and then the
association will introduce the topic to TTCSI. All services sectors can and should participate
in TTCSI.
16
BUILDING AN EGYPTIAN SERVICES COALITION
The development of the Barbados Coalition of Service Industries (BCSI) followed a slightly
different path than many of the other examples of developing country services coalitions. In
2001, the CARICOM Secretariat encouraged member states to organize national private
sector services coalitions. In 2002, the BCSI was established as a private sector initiative, and
although BCSI is a private entity, it is fully funded by the Government of Barbados. Today,
the CARICOM Secretariat has mandated that each Member State establish its own national
coalition, each of which will then become part of a regional Caribbean Coalition of Service
Industries. The objectives of BCSI focus on promoting the development and competitiveness
of the Barbados’ service sectors; educating stakeholders on relevant aspects of trade
agreements, negotiations, policies, and issues that affect trade in services; lobbying the
Government on legislative and policy issues that support fair rules on trade in services;
promoting export activities of Barbadian service suppliers; and ensuring that Barbadian
service providers are able to meet the highest industry standards. BCSI helps organize the
services sectors into industry associations which then become members of the BCSI—in
effect, an association of service industry associations. In the future, it may be possible for
individual firms to become BCSI Members independent of membership to another
association. An important element of support, BCSI provides templates for the development
of association bylaws and assists with the incorporation/registration of each service
association. While BCSI does represent 36 services associations with services providers in
both the public and private sector, these corporate members do not include tourism or
offshore financial services (although these sectors can be affiliated with BCSI through an
associate membership).
Government Advisory Committee
If establishing a new association or partnering with an existing association or federation
proves to be too much of a challenge initially, another option would be to broach the subject
from a different angle. The private sector could approach MTI with a recommendation to
create a formal private sector advisory committee that would focus on providing input to the
Government on trade-related services issues, similar to the U.S. Industry Trade Advisory
Committee on Services and Financial Industries (ITAC 10). While this could be a starting
point for the mobilization of the services sector as an advisory group, there may be limitations
to the types of activities it is able to implement if there is no umbrella association backing it
up.
DONOR INITIATED
In 1997, the Uganda Services Exporter’s Association (USEA) was formed as a private, nonprofit industry coalition for small and medium-sized enterprises (SMEs) and their associations
through a resolution at an ITC/UNCTAD/WTO sponsored workshop. The workshop was
organized by the Uganda Export Promotion Board. USEA is an advocacy and export support
platform that started with 12 corporate members and seven SMEs. It represents Uganda’s
services industry in multilateral, regional, and bilateral trade negotiations and has been
accredited as Uganda’s National Enquiry Point on international trade in services.
Establishing a Services
Coalition in Egypt
A services coalition is typically comprised of multiple service sectors that have identified
common priorities and causes and thus have joined forces to be heard through a much
stronger and more influential voice that represents a diverse cross-section of service sectors.
An important basis for establishing a services coalition is that it should distinguish itself from
existing business and trade associations, which tend to focus on sector-centric issues. A
services coalition does not have to represent all services sectors, since there may be services
sectors that will not support the broader objectives of the coalition. However, it does need to
represent a critical mass of private sector firms to ensure support for creating such an entity.
Defining critical mass is going to vary from country to country, and in some cases, according
to the legal form of the entity. For example, in Egypt, if the services coalition decides to
organize itself in the form of an association, there must be a minimum of 10 persons (either
natural or juridical) that make up the initial membership.
Several approaches to establishing a services coalition are possible. The key elements to take
into account are the following:

Build critical mass. The first step to establishing a services coalition is determining
whether or not there is sufficient interest from a cross-section of private sector services
providers. TRAC has taken the initiative to reach out to the AmCham’s membership (and
beyond) in the form of informal and formal (i.e., roundtable discussions) consultations
with services providers to 1) gauge their interest in creating a services coalition, 2)
discuss stakeholder concerns, and 3) build knowledge and understanding among
stakeholders on the objectives and activities of a services coalition. Reaction from
Egyptian service providers, including the financial, telecommunications, management,
and tourism sectors, has been very positive.

Ensure Government buy-in. In Egypt, Government buy-in to creating a services coalition
is important as it sends a message to all stakeholders that it sees the value in having such
an entity and is willing to collaborate with the coalition on trade in services issues.

Identify leader(s). Leadership of the coalition is key, especially during the critical start-up
phase. A dynamic Chairperson will need to be the “champion” of the coalition, lending
time and energy to promote the services coalition, provide direction to the membership,
chair meetings when appropriate, and raise the profile of the coalition. In addition, the
Chairperson will have to have a good working relationship with Government officials.
Once the coalition is up and running, it is equally important to identify a qualified
individual to act as the executive director of the coalition. This person will be
knowledgeable about trade in services and will manage the day-to-day activities of the
coalition, providing leadership in developing and carrying out coalition objectives.
18

BUILDING AN EGYPTIAN SERVICES COALITION
Determine where and how to organize. Because of preliminary financial burdens and a
lack of full-time staff resources that tends to be associated with developing a formal
association in Egypt, it was suggested that a Core Services Committee be established
within the AmCham with the understanding that this should not prejudice any future
proposal to formalize a services coalition outside of the AmCham at a later date. There
are a number of benefits to this approach. First, services coalitions in developing
countries can take several months to a couple of years to establish, primarily because
there may be a need for a certain amount of capacity building among all stakeholders (i.e.,
private sector, government, regulatory bodies, etc.) on the objectives and benefits of a
services coalition. The Core Services Committee can be instrumental in drafting its
mission statement, short- and long-term visions, and functions. Once the coalition appears
to be sustainable, stakeholders should then discuss different options to establishing an
initial structure either keeping it within the AmCham or moving it outside in the form of
an Association, a Council (e.g., the Competitiveness Council), or a Federation. The
potential risk in this approach is that it could potentially be regarded as an “American”
initiative. However, if there is strong leadership coming from a number of large Egyptian
firms, this could mitigate the above mentioned risk.
Alternatively, a task force comprised of an initial group of dedicated service providers
(with support from TRAC or TAPR II) could be formed and charged with a mission to
carefully review the organizational structures of other CSI’s to determine which might be
most appropriate for Egypt. It may be worth inviting an official from one of these
services coalitions to discusses their experiences in more detail and with a broad group of
Egyptian services stakeholders.

Develop an initial work plan of activities. Such activities could include:

Organizing meetings with services negotiators to discuss EU, GAFTA and other
negotiations;

Identifying priorities and drafting position papers on key trade in services issues;

Inventorying and publishing domestic regulatory measures that affect the
provision of services (i.e., cross-border) and services providers in Egypt;

Launching surveys in key services sectors to provide a better understanding of the
impact that these particular sectors contribute to the Egyptian economy;

Examining export markets for Egyptian services and service providers and
identifying obstacles to export growth (both domestically and in the host market);

Creating a strategy to address issues related to the recognition of professional
degrees with key trading partners;

Organizing an international conference with heads of other CSI’s to build
awareness of the impact that these institutions have had in their home market as
well as in the international arena; and

Working with Central Bank and CAMPAS to improve the reporting of services
data to improve services statistics at the national level.
ESTABLISHING A SERVICES COALITION IN EGYPT
19
The above list is illustrative and should be thought of as flexible to adjustments suggested by
committee members. It should be noted that many of these activities could be undertaken in
collaboration with other interested groups such as think tanks, academia, research institutes,
and donor projects (e.g., TAPR II). The Committee should explore options to minimize costs
and maximize collaborative efforts.
NEXT STEPS
Egypt already has a critical mass of interested firms representing several services sectors.
There are a couple of organizational and substantive steps that could be undertaken over the
next few months. First, the proposal should be presented to Minister Rachid to garner his
support and buy-in to the process. He (or his staff) may also have some concrete suggestions
on potential activities that could support ongoing trade negotiations or regulatory reform
efforts. Second, a meeting with the Ministry’s services negotiators should be organized to
present current standings in services negotiations with the EU, GAFTA, and COMESA. MTI
could provide an overview of the negotiations and highlight contentious issues, while at the
same time solicit input from the private sector. This meeting will also provide the private
sector with a preview of the type of work/input that is needed from a services coalition. Third,
an organizational meeting of services stakeholders should be scheduled to review the
organizational options, and to push the identification of a Chair and a Vice-Chair. At this
point, it may be a good idea to form a task force consisting of interested services firms to take
charge of reviewing possible options for organizing either formally or informally. Follow on
activities should also be discussed and a proposed work plan of potential issues should be
identified. It will probably fall upon TRAC and/or AmCham to help facilitate the work of the
services coalition, at least until a long-term plan and a structure are in place.
References
International Trade Centre (ITC), Creating a Services Coalition: an East African Roadmap.
ITC, Trade in Services, Coalition of Service Industries Why and How.
SELECTED WEBSITES
Australian Services Roundtable: www.servicesaustralia.org.au
Barbados Coalition of Service Industries: www.bcsi.org.bb
Coalición de Exportadores de Servicios (Services Exporters Coalition – CES):
www.chilexportaservicios.cl
U.S. Coalition of Service Industries: www.uscsi.org
European Services Forum: www.esf..be
Hong Kong Coalition of Service Industries: www.hkcsi.org.hk
Uganda Services Exporters Association: www.ugandaexportsonline.com/service_exports.htm
The Trade-Related Assistance Center- TRAC/AmCham
33 Soliman Abaza Street, 9th Floor
Dokki, Cairo
Phone: +2 02 338-1050
Fax: +2 02 749-1528
www.egypttrade.org
Technical Assistance for Policy Reform II
BearingPoint, Inc.
8 El Sad El Aali Street, 18th Floor
Dokki, Giza
Egypt
Country Code: 12311
Phone: +2 02 335 5507
Fax: +2 02 337 7684
www.usaideconomic.org.eg