“Using Trade Agreements to

ObtainMarket Access for Legal and Other

Services”World Services Group Annual Meeting

September 17, 2004

By Robert VastinePresident, U.S. Coalition of Services

Industrieswww.uscsi.org

Coalition of Service Industries Association of US private companies Advocates services trade expansion

By removing market barriers complex and diverse substantially regulatory

Works mainly with governments to achieve goals Leverages relationships with business in other

countries Financial Leaders Group Global Services Network Friends of Services

ABC’s of Services Trade

Four elements Cross-border trade

trade conducted electronically Consumption abroad

Tourism, health care, education Trade through US foreign affiliates

Commercial presence Movement of natural persons

Temporary entry is not immigration

These are the four “Modes of Supply” of the GATS

US is Highly Competitive in Services Trade

Cross-border services trade was almost $50 billion in surplus in 2003 Services exports were $307 billion in 2003

Affiliates sales of services were $432 billion (in 2001) affiliate sales have special significance for services

Global services trade totals $1.8 trillion Only 20% of overall trade of $9 trillion

Because the effort to remove barriers began in 1994 Barriers are substantially regulatory

As in legal and financial services

Removing Barriers to US Services Trade

US brought services into global trade system GATS 1994

Framework of rules for liberal trade in services Major element of the WTO Few commitments

Much work to liberalize services trade remains

This work is now focused on the “Doha Round” of negotiations under WTO and in FTAs based on same principles

Using Trade Negotiations toBreak Down Barriers

Multilaterally – the “Doha Round” Negotiations

Bilateral Free Trade Agreements Singapore, Chile, and Morocco have been

implemented Australia, Bahrain, CAFTA, and Dominican Republic

have been completed, but not implemented Andean countries, Panama, Southern African

Customs Union (SACU) and Thailand are being negotiated

Regional efforts like Asia-Pacific Economic Cooperation (APEC) and Free Trade Area of the Americas (FTAA)

Legal Services Trade “Trade” in legal services occurs in all the

four “modes” ” mentioned above “Trade” occurs when a foreign client

consults a San Francisco law firm or when a US lawyer provides advice to clients in

Bangkok from his branch office or his hotel room US cross-border exports of legal services

were $3.3 billion in 2002 Imports were $768 million, surplus $2.5 billion Trade through affiliates was $918 million in 2001 Removing restrictions will permit more growth

What CSI Wants for Legal Services

Foreign lawyers and law firms should be able to establish and practice in any business form available to host country firms Foreign firms should be able to use the

name used in their home country Foreign lawyers and law firms should be able

to perform services in a host country that they are allowed to perform in their home country Except litigation in local courts and other

services unique to home country law (e.g., probate)

What US Wants for Legal Services (continued)

Foreign firms should be able to supply legal services relating to the host country law IF those services are provided by a qualified local lawyer affiliated with, or retained by a foreign firm Foreign lawyers who want to qualify as a host country legal professional

should have a reasonable opportunity to do so Foreign firms should be able to choose forms of association with local

lawyers Foreign lawyers should be able to use their home country

professional titles Or any title authorized for use by a host country lawyer, if qualified (e.g.,

Queen’s Counsellor) Foreign lawyers should be able to participate in arbitration CSI has submitted a negotiating proposal to USTR

USTR has provided all WTO members available at www.uscsi.org

Transparency Is a Top Priority for All Sectors

Regulatory and licensing transparency An overriding US objective in the WTO and FTAs

Authorities should make administrative regulations publicly available Prior comment is essential

Transparent, impartial registration procedures Regulators should process applications within a

reasonable period Written statement of reasons if registration is

denied Reasonable opportunity to appeal and re-apply

Liberalization in Other Sectors

Doha Round covers all services except air transportation And maritime

Financial services are an important focus Also telecommunications, express delivery,

energy services

US has ambitious agenda To secure meaningful liberalization across all

sectors

Financial Services Liberalization

CSI has led the private sector effort to secure liberalization Supported Treasury and USTR in 1997

negotiations, and in current Doha Round Developed the Financial Leaders Group

Lobby foreign governments to liberalize Develop detailed lists of barriers in important

‘developing’ countries [India, Brazil, Korea, Egypt, ASEAN]

Ask US, EU, Japanese and Canadian government negotiators to secure removal of these barriers

Examples of Financial Examples of Financial Services Services Barriers We Seek We Seek

to Removeto Remove Example: Brazil 170 million people, biggest Latin American market Tradition of state ownership and heavy regulation Substantial protectionism

Banking [commercial presence] Case-by-case authorization (with conditions) by

Presidential decree Restricted to acquisition of domestic bank, or

establishment of a subsidiary branch or rep office Foreign subs can’t provide “universal” banking service Discretionary limits on number of branches (including

ATMs) No accounts in foreign currencies Restrictions on foreign bank rep office personnel

Need YOUR help to Motivate Trade Liberalization Efforts

Support the US government effort in WTO And FTAs

Lobby other governments Services trade liberalization will

massively benefit the US University of Michigan computational analysis

shows elimination of barriers would have $466 billion welfare effect on US alone

$1662 billion effect on global welfare