Overview of Services and Investment in the EPA and Challenges for Implementation

1. Overview of Services and Investment in the EPA and Challenges for Implementation Ramesh Chaitoo Head, Services Trade Unit CRNM - www.crnm.org rchaitoo@crnm.org CARIFORUM-EU Business Forum Barbados, Nov 24-25, 2008

2. Economic Partnership Agreement • Comprehensive agreement covering bilateral trade and investment relationship • Trade in Goods - tariffs, origin, agriculture, etc. • Services, Investment, E-commerce • Trade related issues - sustainable development, procurement, innovation, etc. • Dispute settlement & institutional provisions

3. EU-Cariforum Services Trade Summary • UK accounted for an average of 33% of services exports to CARIFORUM between 1999-2003 • UK accounted for an average of 59% of services imports from CARIFORUM between 1999-2003 • A major proportion of this was due to UK residents traveling to CARIFORUM countries, especially Barbados and Jamaica

4. EU Versus UK Services Imports from CARIFORUM 1999-2003

5. EU Versus UK Services Exports to CARIFORUM 1999-2003

6. EU Services Imports from CARIFORUM as % Total Services Imports (Average1999-2003)

7. EU Services Exports to CARIFORUM as % Total Services Exports (Average1999-2003)

8. Service categories where EU imports from CARIFORUM exceed exports (average 1999-2003) • Travel • Transport • Communication services • Government services CARIFORUM SERVICES TRADE SURPLUS

9. Service categories where EU exports to CARIFORUM exceed imports (average 1999-2003) • Other business services • Insurance • Financial • Construction services • Computer & Information services • Royalties & licence fees • Personal, cultural and recreational services CARIFORUM SERVICES TRADE DEFICIT

12. Basic Structure of S& I provisions • Rules or disciplines on Services & Investment • Market access commitments (Schedules) • Protocol on Cultural cooperation • Link with other parts of EPA - dispute settlement, competition, etc.

13. Key Points • Services supplied by government excluded • Subsidies not covered by Agreement • Government free to regulate • Government procurement not covered • Immigration policies & procedures not covered

14. Structure of Services & Investment Title • Chap 1 - General provisions • Chap 2 - Commercial Presence (Investment) • Chap 3 - Cross Border Supply of services • Chap 4 - Temporary Presence of Natural Persons for Business Purpose • Chap 5 - Regulatory Framework (with sectoral rules)

15. Sectoral provisions • Computer • Courier • Telecoms • Financial services • Maritime transport • Tourism 6. E-commerce 7. Cooperation

16. Investment Interests • Address the declining interest of EU firms in Caribbean by a new complete framework • CF wanted comprehensive Investment provisions: EC had limited mandate • Create a regime for investment & trade in EPA to attract EU & 3rd country firms to CF states • Eliminate the need to negotiate new bilateral investment treaties

17. Investment Rules • Market access • National Treatment and MFN • Excludes - nuclear materials; arms; audiovisual; cabotage; air traffic rights • Forbids corruption by investors • Maintains core labour standards • Safeguards the environment • Forbids lowering of environmental, labour or occupational health & safety standards to attract investment

18. Market Access for investment • EC - commitments very broad and deep except for a few sectors such as energy, health, education • EC - limitations on landholding, and other restrictions in mainly new Members • CF - commitments in manufacturing, mining, etc but limitations re landholding, type of corporate entity, SMEs, etc. • CF - Reservations in agriculture, forestry, fishing, mining, food & beverage, furniture, in some states; Only Dominican Republic liberalized electricity & gas

19. Rules on Services • Mainly GATS approach • National Treatment, MFN • Similar exclusions of sectors as investment chapter • Mutual recognition of qualifications • Special categories of natural persons for temporary entry: • Key personnel (managers, specialists) & graduate trainees • Business services sellers • Contractual services suppliers • Independent professionals • Short term visitors for business purposes

20. Short term visitors for business purposes EC and CF states to facilitate temporary entry for the following activities for up to 90 days: • Research & design • Marketing • Training seminars • Trade fairs and exhibitions • Sales & purchasing • Tourism personnel

21. Services Market Access Granted • CF - Positive list for services commitments like GATS template; limited sectoral coverage to 65% of services sectors; Some OECS states are just about 50%. (Dom Rep is 76 %). Some opening in the future. Very limited Mode 4 commitments. • EC - Different structure but positive list • Very broad sectoral coverage - more than 90 %; much greater access granted for Mode 4 to CF suppliers than in WTO; Limitations in new member states & starting in 2011 & 2014

22. Tourism • Rules to prevent anti-competitive behaviour by large tourism operators • Support for SMEs • Cooperate re mutual recognition of tourism requirements. qualifications, licences • Development support for training, standards, environmental management

23. Cultural Industries • Major gains - in market access and Cultural Protocol which provides for collaboration, support, movement of artists and cultural practitioners and special provisions for audio-visual collaboration • 26 EU states granted access for Contractual Service suppliers in Entertainment services • First time ever for EC in a sector that is very sensitive and for which trade commitments are not normally taken

24. Entertainment Services CPC 9619 Entertainment services (other than audio-visual) 96191 Theatrical producer, singer group, band and orchestra entertainment services 96192 Services provided by authors, composers, sculptors, entertainers and other individual artists 96193 Ancillary theatrical services n.e.c. 96194 Circus, amusement park and similar attraction services 96195 Ballroom, discotheque and dance instructor services 96199 Other entertainment services n.e.c.

25. Temporary entry access for CF Contractual Service Suppliers (CSS) in 29 sectors in EU • Legal advisory services in respect of international public law and foreign law • Accounting and bookkeeping services • Taxation advisory services • Architectural services • Urban planning and landscape architecture services • Engineering services • Integrated Engineering services • Medical and dental services • Veterinary services • Midwives services • Services provided by nurses, physiotherapists and paramedical personnel • Computer and related services • Research and development services

26. Temporary Entry for CSS in EU • Advertising services • Market Research and Opinion Polling • Management consulting services • Services related to management consulting • Technical testing and analysis services • Related scientific and technical consulting services • Maintenance and repair of equipment • Chef de cuisine services • Fashion model services • Translation and interpretation services • Site investigation work • Higher education services (only privately-funded services) • Environmental services • Travel agencies and tour operators' services • Tourist guides services • Entertainment services other than audiovisual services

27. Access for Independent Professionals in EU • Legal advisory services in respect of international public law and foreign law (i.e. non-EU law) • Architectural services • Urban planning and landscape architecture services • Engineering services • Integrated Engineering services • Computer and related services • Research and development services • Market Research and Opinion Polling • Management consulting services • Services related to management consulting • Translation and interpretation services

28. Technical Cooperation • Improve ability of CF suppliers to meet regulations and standards in EU • Improve export capacity of CF suppliers (culture, tourism, SMEs, MRAs) • Interaction & dialogue between CF and EC firms • Address quality and standards in CF • Develop & implement regulatory regimes • Establish mechanisms for promoting investment & joint ventures • Other activities

29. EPA Implementation and follow up • Official/govt process - legislative or regulatory changes; information dissemination; support to business initiatives; seeking and programming of funding at national and regional levels

30. Business side of implementation • Private sector process - learn about market access; organize by sector; interface with Europeans; develop standards and credentials; position firms to get contracts by using entry provisions for business purpose in EPA

31. Joint initiatives for services • Aid for Trade for services plan • Need to develop proposals to get support under Development Cooptn provisions of the EPA. Article 121

32. Professional services • Have to discuss mutual recognition regionally in order to have common position for bilateral discussions with EU services associations • Need common standards • What is status of Profess services regime in Cbbean (CSME)?

33. Entertainment services • Need to understand the provisions and figure out how to take advantage of them • Use contacts in UK, Belgium, France, Guadeloupe, Martinique, etc. • ICT - CF needs to plug into global value chains in ICT sector

34. Animation sector • Tremendous potential as it is global industry - outsourcing contracts • CF would like to develop animators in Cbbean. Need partners in government and industry • Develop animation studios - attract young people in activities they like