1. 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 »

2. 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?

3. « 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.)

4. « The voice of the European Service Industries for International Trade Negotiations in Services» ESF covers most services 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) Postal & Express Delivery 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

5. « The voice of the European Service Industries for International Trade Negotiations in Services» BARCLAYS BANK BT (British Telecom) CLIFFORD CHANCE COMMERZBANK DEUTSCHE BANK DHL FRANCE TELECOM GOLDMAN SACHS IBM EUROPE LLOYD’S PRICEWATERHOUSE- COOPERS ROYAL AHOLD NV SIEMENS AG STANDARD CHARTERED BANK TELEFONICA TNT TUI VEOLIA ENVIRONMENT ESF MEMBERS INCLUDE: For more information, see www.esf.be

6. « The voice of the European Service Industries for International Trade Negotiations in Services» ESF MEMBERS INCLUDE: For more information, see www.esf.be

7. « 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.

8. « The voice of the European Service Industries for International Trade Negotiations in Services» The Services sector generates 90% of new jobs in the EU15 Services Agriculture Industry

9. World Economy: Percentage of GDP by Sector, 2006

10. « 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.

11. « 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 customer to make an audit for six weeks (mode 4), etc.

12. Trends in World Trade in Services

13. International Trade in Services 28.9% 42.2%

14. RankCountryTrade Volume ExportsImportsBalance 1USA266 852 139 135127 71711 417 2Switzerland105 490 61 50343 98717 516 3Japan33 183 19 37813 8055 573 6China31 535 17 76613 7693 996 4Russia31 268 19 23812 0307 208 5Norway30 920 19 00811 9127 096 7Canada21 343 11 6959 6482 047 8Singapore18 530 11 3977 1334 264 9Turkey18 517 6 61711 900-5 282 10Australia17 031 10 7476 2844 463 EU-27 International Trade in Services with non-EU Countries 2007, EUR bn « The voice of the European Service industries for the International trade in services negotiations »

15. EU-27 International Trade in Services with non-EU Countries in 2006 (EUR bn) RankCountryTrade VolumeExportsImportsBalance 11Hong Kong13.5846.8966.6880.207 12India12.5266.9785.5481.430 13Korea10.3676.3394.0282.341 14Brazil9.7775.1624.6150.548 15South Africa9.6625.3054.3570.948 16Egypt7.3202.2945.026-2.732 17Croatia7.0452.2834.762-2.478 18Mexico6.7784.0912.6871.403 19Thailand6.5171.9994.518-2.519 20Israel5.50133.1122.3890.723 21Morocco5.1721.6723.500-1.828 22Taiwan5.1163.0662.0501.016 23Argentina4.0492.3951.6540.741 24Malaysia3.8882.0781.8100.268 25New Zealand3.1381.8091.3290.480 26Indonesia2,4831.4121.0710.341

16. Trends of the EU International Trade in Services

17. EU International trade in Services (Trends in volume – Bio €)

18. « The voice of the European Service Industries for the GATS negotiations » Trade between Member States exceeds Extra-EU trade Source: Eurostat TOTAL EXPORT (intra + extra: 1178.1 Bio €) € 679.6bn € 498.5bn

19. « 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).

20. What does FDI include? FDI Capital Flows FDI income FDI stocks in a country at the end of the year

21. 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)

22. Services contribute to the largest share of FDI (2)

23. 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 »

24. 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 « The voice of the European Service Industries for the GATS negotiations »