Simon Knott – DG Trade European Commission - DG Trade Trade in Services and Investment EPA Seminar 14 June 2005 Simon Knott Simon Knott

Simon Knott – DG Trade European Commission - DG Trade Cotonou Agreement l Recognises growing importance of trade in services and its contribution to development l Takes account of the provisions of the General Agreement on Trade in Services (GATS) l Stresses the need for capacity building in services, linked to enhanced competitiveness and increased trade in goods and services

Simon Knott – DG Trade European Commission - DG Trade Cotonou Agreement l Recognises the need to promote and protect investment l EPAs to set out general principles l Investment finance important

Simon Knott – DG Trade European Commission - DG Trade Services lFast growing element of international trade and domestic economy lOver 50% of GDP in many developing countries lEconomy-wide benefits: jobs, new technology, links to industry lImports can strengthen economy and increase exports

Simon Knott – DG Trade European Commission - DG Trade Key services sectors lFinancial services lTelecoms lTransport (including maritime) lEnvironmental services lTourism lBusiness services (including computers) lConstruction lDistribution lOthers? lModes of supply: (1) cross border; (2) consumption abroad; (3) commercial presence; (4) temporary movement of people

Simon Knott – DG Trade European Commission - DG Trade Services trade restrictions lLimits on the number of foreign service suppliers, through numerical quotas, monopolies, exclusive rights or economic needs tests; lLimits on type of legal entity, e.g. through the exclusion of branches of foreign firms or requirements for joint- ventures; lLimits on foreign share-holding in individual companies or by sector; lDiscriminatory licensing or other administrative requirements.

Simon Knott – DG Trade European Commission - DG Trade GATS lArticle V: Trade agreements must have substantial sectoral coverage and provide for the elimination of substantially all discrimination. lThere is flexibility for developing countries and account may be taken of the wider process of economic integration.

Simon Knott – DG Trade European Commission - DG Trade Progressive liberalization lPositive list approach lAsymmetry lTransition periods lRegulatory environment lSafeguarding public services l Respect for national policy objectives

Simon Knott – DG Trade European Commission - DG Trade Investment l Rate of investment linked to growth l Risks and returns l Improving the investment climate lEncouraging domestic and foreign investment l Regional integration and market size

Simon Knott – DG Trade European Commission - DG Trade Investment Principles l Transparency l Stability and predictability l Non-discrimination: national treatment and market access l Movement of key personnel l Freedom of FDI-related capital movements

Simon Knott – DG Trade European Commission - DG Trade EU Investment Agreements l EC and Member States competences l Bilateral Investment Promotion Agreements (BITs) l Other EU agreements l EPA negotiations