UPS and FedEx have welcomed a move by the US government to hold multilateral talks with 20 majortrading countries on a deal to liberalise international services, which could help the two
companies expand globally.United States Trade Representative Ron Kirk announced yesterday that the US government plannedto enter negotiations with a group of 20 trading partners, which represent nearly two-thirds ofglobal trade in services, for an International Services Agreement (ISA). The group includes Canada,Mexico, the EU, Japan, South Korea, Hong Kong and Australia.
The US is the world’s largest services trader, with a $178.5 billion surplus in 2011, but Kirknoted that tradable services are still five times less likely to be exported than manufacturedproducts. “Every $1 billion in US services exports supports an estimated 4,200 jobs in America. Ifbusiness services achieved the same export potential as manufactured goods globally, US exportscould increase by as much as $800 billion. To begin to realise this potential, we need to surmounta range of barriers that lock out, constrain, or disrupt the international supply of services. Anambitious, high-standard international services agreement presents a tremendous opportunity toremove these impediments and boost US economic growth and support additional jobs,” he stated.
The multilateral initiative comes after slow progress at World Trade Organisation talks onliberalisation of services in recent years under the Doha Round. The WTO’s existing GeneralAgreement on Trade in Services (GATS), dating back to 2000, covers sectors such as banking,telecoms and tourism, and includes business activities such as cross-border supply of services andservices provided by subsidiaries of foreign companies. But there are numerous exceptions andexemptions. One area that an updated GATS agreement could cover is air transport services,including international air traffic rights.
In response to the US government announcement, both UPS and FedEx welcomed the move and stressedtheir strong support for an international services agreement to break down barriers to trade andencourage economic growth.
Dan Brutto, UPS International President, commented: “The American services sector generates morethan 75% of national economic output and provides 80% of the jobs in the country, making itimperative that the US government support commercially meaningful trade agreements that allow UScompanies to compete on a level playing field in the world marketplace.”
He added: “Services are the lifeblood of our economy and of global commerce – the indispensableenabler of everything from trade in agriculture and manufacturing to the development and sale ofhigh-tech products. If you want to make it, move it, buy it, or sell it, you need services –professional, financial, retail services and, of course, the delivery and logistics services to getproducts to market.”
FedEx pointed out that US service suppliers face a wide range of barriers to doing business inoverseas markets. “FedEx strongly supports negotiating the ISA. It will benefit FedEx byremoving many of the investment and other market access barriers that our industry faces around theworld. It will be good for many of our customers as well because they will be able to offer, anduse, more services around the world.”
