European Commission proposes to open plurilateral trade negotiations on servicesEuropean Commission

The European Commission today asked the Council to give its green light for negotiations on a new international agreement on trade in services. To begin with, 21 WTO Members will be at the negotiating table, but the EU is keen to encourage others to join. The EU is also pushing for the agreement to dovetail with WTO rules so it can be later folded into the WTO system.

EU Trade Commissioner Karel De Gucht said: "The perspective of a new broad-based trade in services agreement is excellent news - for jobs and for economic growth. I encourage all WTO members who support market opening and strong rules for trade in services to join this initiative."

The negotiations will cover all services sectors, including information and communication technology (ICT) services, logistics and transport, financial services and services for businesses. But the EU, like the other participants, is looking for the negotiations to go beyond simply further opening up markets for services. The aim is also to develop new rules on trade in services, such as those applying to government procurement of services, licensing procedures or access to communication networks.

Background

Together, the 21 initial countries participating in the negotiations1 represent more than two thirds of world trade in services. For the EU, trade in services is of strategic importance, the sector accounting for some three-quarters of EU gross domestic product (GDP) and of EU jobs. Within the EU, cross-border trade in services accounts for around 30% of EU trade, and Foreign Direct Investment in Services (to be covered by the scope of the future agreement) represents around 70% of the EU's FDI flows and around 60% of our FDI stock.

The agreement will initially be negotiated between 21 WTO members (48 when counting EU Member States). Both during and after conclusion of the negotiations, the agreement will be open to all other WTO members who want to liberalise international trade in services. The hope is that, eventually, the agreement will be integrated into the WTO system. In the exploratory talks ahead of the launch of the negotiations, the EU has advocated shaping the future agreement in a way that makes it compatible with the WTO General Agreement on Trade in Services (GATS).

The negotiations are expected to start in spring 2013.

The European Commission will now submit its proposal to the Council for adoption.

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