Trade in Services: How to Move Forward?

Transcription

1 2017/SOM3/CTI/WKSP5/009 Trade in Services: How to Move Forward? Submitted by: Pontifical Catholic University of Chile Workshop on Free Trade Area of the Asia-Pacific Building Blocks: The Pacific Alliance Contribution to APEC Work in Services, MSMEs and Trade Facilitation Ho Chi Minh City, Viet Nam 26 August 2017

2 TRADE IN SERVICES: HOW TO MOVE FORWARD? Jorge Sahd K. Director Center for Internacionales Studies UC August,

3 AGENDA I. CONTEXT II. TRADE IN SERVICES IN THE PACIFIC ALLIANCE III. IMPORTANCE (AND COMPLEXITY) OF TRADE IN SERVICES IV. MOVING FORWARD III. Conclusiones

4 THE CONTEXT CHALLENGES TRADE Source: Edelman Trust Barometer, 2017.

5 THE CONTEXT CHALLENGES TRADE Source: Edelman Trust Barometer, 2017

6 TRUMP S TPP WITHDRAWAL HAS OPENDED NEW POSSIBLE PATHWAYS Trans-Pacific Partnership Agreement Possible pathways FTAAP Pacific Alliance and Associated States RCEP TISA (under pressure?)

7 BUT THE PACIFIC ALLIANCE IS A REMARKABLE EFFORT OF INTEGRATION

8 IMPORTANCE OF TRADE IN SERVICES 14% 12% 10% Trade in Services (% of GDP) 13% 8% 6% 6% 4% 2% 0% Source: World Bank

9 SERVICES IN TRADE AS % OF GDP 4.2% México 5.2% Colombia 6.3% Peru 10.2% Chile Source: Deloitte, 2016

10 TRADE IN SERVICES IN THE PACIFIC ALLIANCE Trade in services in PA has grown 70% between Source: WTO. MM dollars

11 AP ADDITIONAL PROTOCOL (CHAPTER 9): CROSS-BORDER TRADE IN SERVICES Definitions Scope of Application National Treatment Most-favorednation Treatment Local Presence Access to Markets Non-conforming Measures Transparency National Regulation Recognition Subsidies Complementary Services Transfers and Payment Service Trade Statistics Service Subcommittee Denial of Benefits

12 THERE IS A ROOM FOR IMPROVEMENT Chile Barriers to trade of services Accounting Engineering Motion Picture Sound Recording Air Transport Rail Freight Transport Courier Commercial Banking Logistic Cargo-Handling Logistic Freight Transport Construction Source: Services Trade Restrictiveness Index, OECD Architecture Legal Broadcasting Telecom Maritime Transport Road Freight Transport Distribution Insurance Logistics Storage and Warehouse Logistics Custom Brokerage Computer = more trade-friendly = less trade-friendly = around all country average

13 THERE IS A ROOM FOR IMPROVEMENT Mexico Barriers to trade of services Accounting Engineering Motion Picture Sound Recording Air Transport Rail Freight Transport Courier Commercial Banking Logistic Cargo-Handling Logistic Freight Transport Construction Source: Services Trade Restrictiveness Index, OECD Architecture Legal Broadcasting Telecom Maritime Transport Road Freight Transport Distribution Insurance Logistics Storage and Warehouse Logistics Custom Brokerage Computer = more trade-friendly = less trade-friendly = around all country average

14 THERE IS A ROOM FOR IMPROVEMENT Colombia Barriers to trade of services Accounting Engineering Motion Picture Sound Recording Air Transport Rail Freight Transport Courier Commercial Banking Logistic Cargo-Handling Logistic Freight Transport Construction Source: Services Trade Restrictiveness Index, OECD Architecture Legal Broadcasting Telecom Maritime Transport Road Freight Transport Distribution Insurance Logistics Storage and Warehouse Logistics Custom Brokerage Computer = more trade-friendly = less trade-friendly = around all country average

15 TAXATION EXPORTATION IMPORTATION Barriers Income Calification Direct Taxes Chile Mexico Peru Colombia Chile Mexico Peru Colombia ALIANZA DEL PACÍFICO CDI Indirect Taxes Formalities CDI existence with the other countries Barriers: Low level of barriers in international provisional services Medium level of barriers in international provisional services High level of barriers in international provisional services CDI: Existence of agreement to avoid double international taxation Non-existence of agreement to avoid double international taxation

16 IMPORTANCE (AND COMPLEXITY) OF TRADE IN SERVICES SERVICES SECTOR Diversity Telecommunication Financial services Transport Tourism Professional services Construction, etc. Regulations and Restrictions General Agreement on Trade in Services (GATS): cross border trade consumption abroad commercial presence movement of natural persons.

17 OECD SERVICES TRADE RESTRICTIVENESS INDEX (STRI)

18 RESTRICTIONS

19 INTERNATIONAL ORGANIZATIONS AGREE ON THE TARGETS APEC Services Competitiveness Roadmap ( ) OECD FTAAP Promotion of open services markets Regulatory principles: To enhance transparency and predictability To facilitate services delivered electronically To facilitate services delivered through the presence of natural persons Open a well regulated services market Global value chains Regulatory cooperation Movement of professionals Domestic regulation (including competition telecom) and transparency Weneedtorecognizethatservices liberalization is an important facilitator of foreign investment, which in turn drives overall investment in the APEC region. An eventual FTAAP s treatment of services trade and investment could have a critical role in growing trade in services in the region. Liberalization of services is challenging, requires sequencing and warrants support through technical assistance

20 HOW TO FOCUS? OECD SERVICES TRADE RESTRICTIVENESS INDEX (STRI) Restriction of Foreign Entry Restriction on Movement of People Other Discriminatory Measures Barriers to Competition Regulatory Transparency

21 MOVING FORWARD 1. CONVERGENCE PA-APEC Financial integration Business travel card Qualifications and visas Joint Roadmap to facilitate services trade among AP and APEC

22 MOVING FORWARD 2. REGULATORY COOPERATION Coherence Predictability Transparency Set of good practices on domestic regulations on service sectors

23 MOVING FORWARD 3. TAXATION Broader concept of services Double taxation agreement Harmonization of tax regulation Focus: how to avoid double taxation

24 MOVING FORWARD 4. FREE MOVEMENT ON PEOPLE Flexibility for business visitors Degrees recognition Initiative: create de PA Business Card

25 MOVING FORWARD 5. PUBLIC AGENCIES TS promotion programs Administrative procedures (digital certificate of residence, single window) Public agencies need to change the paradigm

26 FINAL THOUGHTS Trade in services needs to be more visible in public policies PA, APEC and FTAAP can sustain these efforts over time

27 TRADE IN SERVICES: HOW TO MOVE FORWARD? Jorge Sahd K. Director Center for Internacionales Studies UC August,