« The voice of the European Service Industries for

International Trade Negotiations in Services »

Séminaire sur les commerce des services

Organisé par IsDB

Casablanca, 15 – 18 juin 2009

"The trend of International Services

Trade & Investment"
Pascal Kerneis
Managing Director
ESF (European Services Forum)
 « The voice of the European Service Industries for
International Trade Negotiations in Services »

1. Presentation of the European Services

Forum
2. What are we talking about, what kind of
services?
3. Place of services in the world economy
and world trade
4. What does international trade in
services includes?
5. Where the majority of FDI goes?
 « The voice of the European Service Sectors
for International trade Negotiations in Services »

WHO ESF DOES REPRESENT?

• 30 European services companies, most of them
major multinational companies
(represented at CEO or Chairman level in the
European Services Leaders Group – ESLG)
• 37 European trade federations of various
services sectors (e.g. banking, insurance,
telecommunications, express, architects,
engineers, accountants, shipping, tourism, etc.)
 « The voice of the European Service Industries
for International Trade Negotiations in Services»

ESF covers most services • Postal & Express Delivery

sectors, including:
• Insurance
• Banking
• Business services: IT &
Computer; consulting, advertising,
after-sales services
• Professional services: legal
services, accountants, architects,
engineers
• Construction services
• Distribution services
• Publishing services (incl.
Music)
services
• Audio-visual services
• Energy related services
• Environmental services
• Telecommunication services
• Tourism
• Air Transport
• Maritime Transport
But no members in Education
or Health services

For more information, see www.esf.be

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

ESF MEMBERS INCLUDE:

• BARCLAYS BANK • PRICEWATERHOUSE-
• BT (British Telecom) COOPERS
• CLIFFORD CHANCE • ROYAL AHOLD NV
• COMMERZBANK • SIEMENS AG
• DEUTSCHE BANK • STANDARD CHARTERED
• DHL BANK
• FRANCE TELECOM • TELEFONICA
• GOLDMAN SACHS • TNT
• IBM EUROPE • TUI
• LLOYD’S • VEOLIA ENVIRONMENT

For more information, see www.esf.be

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

ESF MEMBERS INCLUDE:

For more information, see www.esf.be

 « The voice of the European Service Sectors
for International trade Negotiations in Services »

WHAT DOES ESF DO?

1. It represents the interests of European services
companies that export (or wish to export) their
services and that do (or wish to do) business outside
the EU.
2. As an important and well recognised Forum in its
scope of activity, ESF is an appropriate interlocutor
for the briefings done by services negotiators from
Brussels (DG Trade) and from Geneva (WTO),
reaching a large panel of the interested sectors in one
place.
3. It informs its members on the GATS negotiations and
regional and bilateral trade negotiations, on the
offensives and/or defensives positions of the other
trading parties.
 « The voice of the European Service Industries
for International Trade Negotiations in Services»

Agriculture

Industry

Services

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

 World Economy:
Percentage of GDP by Sector, 2006
 « The voice of the European Service Industries for
International Trade Negotiations in Services»

Source: WTO International Trade Statistics – 2008

* : Includes significant re-exports or imports for re-export.

 « The voice of the European Service industries in international trade in services negotiations »

International Trade in Services: what does it include?

• Services exports in the balance of payment include
commercial transactions that involve the crossing of
borders.
• It comprise the cross-border services (mode 1) like
electronic commerce transactions, architectural plans sent
by fax, legal consultancy provided by e-mail,
• Payment of a tourism package (all inclusive trip), payment
of yearly university fees (mode 2), payment of licence or
franchise fees (royalties), payment of transport fees
(shipping, air cargo & express), etc.
• The repatriation of profits of affiliates (mode 3);
• The payment of the contract between the companies who
agreed to get an accountant (natural person) moving to the
Trends in World Trade in Services
International Trade in Services

28.9
42.2%
 « The voice of the European Service industries for the International
trade in services negotiations »
EU-27 International Trade in Services with non-EU Countries 2007, EUR bn
Rank Country Trade Exports Imports Balance
Volume
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 in 2006 (EUR bn)
Rank Country Trade Volume Exports Imports Balance
11 Hong Kong 13.584 6.896 6.688 0.207
12 India 12.526 6.978 5.548 1.430
13 Korea 10.367 6.339 4.028 2.341
14 Brazil 9.777 5.162 4.615 0.548
15 South Africa 9.662 5.305 4.357 0.948
16 Egypt 7.320 2.294 5.026 -2.732
17 Croatia 7.045 2.283 4.762 -2.478
18 Mexico 6.778 4.091 2.687 1.403
19 Thailand 6.517 1.999 4.518 -2.519
20 Israel 5.501 33.112 2.389 0.723
21 Morocco 5.172 1.672 3.500 -1.828
22 Taiwan 5.116 3.066 2.050 1.016
23 Argentina 4.049 2.395 1.654 0.741
24 Malaysia 3.888 2.078 1.810 0.268
25 New Zealand 3.138 1.809 1.329 0.480
26 Indonesia 2,483 1.412 1.071 0.341
Trends of the EU International Trade in Services
EU International trade in Services
(Trends in volume – Bio €)
 « The voice of the European Service
Industries for the GATS negotiations »
Trade between Member States exceeds Extra-EU trade

€ 679.6bn

€ 498.5bn

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

 « The voice of the European Service
Industries for the GATS negotiations »
What ITS does not include?
• The activities of the foreign affiliates within the country in
which they are established are not taken into consideration
(= part of local GDP), nor the self financed investments
through benefits (reinvested earnings/income) (also local).
• The flow of capital involved in mode 3 operations, i.e. the
financing of the establishment of a new commercial
presence in a foreign country; This is included in the
Foreign Direct Investment (FDI) accounts, not in the
balance of payment, hence not considered as services
exports.
• More than 65% of global FDI flows are invested in services
sectors (see hereafter).
What does FDI include?
• FDI Capital Flows
• FDI income
• FDI stocks in a
country at the end
of the year
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)
 « The voice of the European Service
Industries for the GATS negotiations »

86% of the investment coming to the EU are

done in the Services sectors;
 « The voice of the European Service
Industries for the GATS negotiations »

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: esf@esf.be

Website: www.esf.be