USTR Discusses Services Trade for Pending FTAs, TPP & China
The Office of the U.S. Trade Representative has posted the July 20, 2011 remarks of USTR Kirk at the third annual Global Services Summit. USTR Kirk discussed the need to pass the three pending free trade agreements to ensure access to the services markets of South Korea, Colombia, and Panama (worth a total of $766 billion). He also discussed services markets relative to the TPP talks and China.
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Market Access Under the Three FTAs to Exceed the WTO Services Agreement
Once the agreements are passed and fully implemented, each country will be required to maintain a level of openness in its services market on par with the U.S. And in order to match the U.S. level of openness, the market access commitments undertaken by South Korea, Colombia, and Panama far exceed those of the WTO services agreement, extending across substantially all service sectors and provide automatic coverage of new and innovative services that may develop as markets evolve.
The trade agreements’ provisions on cross-border services, telecommunications, and electronic commerce will break new ground and ease the flow of services and products delivered over telecommunications networks. The agreements will also provide strong investor protections to establish a stable framework for investment in accordance with the rule of law.
TPP Talks Taking Broad Aim at Services and IPR Issues
Kirk stated that Trans-Pacific Partnership (TPP) negotiators are developing proposals for the free flow of information across borders, non-discriminatory treatment of digital products, and elimination of local infrastructure requirements. They are also seeking to reduce and eliminate constraints or policies that hinder ‘technology choice,’ or that effectively provide preferences to indigenous technology.
To complement these efforts, negotiators intend to make protection and enforcement of intellectual property rights a cornerstone of TPP. Creating legitimate platforms for content distribution will protect innovation and enable robust responses to consumer demand. TPP negotiations are proceeding, with the U.S. hosting the next round this September.
Asia-Pacific Region, Including China, Looking at Services Development, Reform
In the Asia-Pacific region, producers are seeking increased investment and greater access to more efficient and dynamic services, while at the same time rising incomes are driving consumer demands for more choice and quality in services. As U.S. service providers are well-positioned to serve these growing markets, the U.S. simply needs equal access and a fair chance to compete in most cases.
For instance, if China were to energetically follow up on high level plans to accelerate services sector reform and introduce greater competition, it could benefit Chinese consumers in financial services, telecommunications services, and logistics/express delivery services, just to name a few.
Such follow up would benefit China's auto insurance market, as its government currently prevents foreign companies from selling mandatory third party liability auto insurance in China. The U.S. is working to find a path forward on improved services liberalization in these and other key services sectors.