Services and Investment in the CariforumEC Economic Partnership Agreement EPA

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Services and Investment in the Cariforum-EC
Economic Partnership Agreement (EPA)

• Ramesh Chaitoo
• Head, Services Trade Unit
• rchaitoo_at_crnm.org
• CE/CAIC/CRNM Workshop
• Trinidad, July 23-24, 2008

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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

See following two slides
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EU Versus UK Services Imports from CARIFORUM
1999-2003
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EU Versus UK Services Exports to CARIFORUM
1999-2003
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EU Services Imports from CARIFORUM as Total
Services Imports (Average1999-2003)
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Composition of Caricoms Global Services Exports
1997-2002
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EU Services Exports to CARIFORUM as Total
Services Exports (Average1999-2003)
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Composition of Caricoms Global Services Imports
1997-2002
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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 (competition,
  dispute settlement, etc)

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Cariforum Services Objectives

• Professional services, tourism, business services
• Entry for Short term Visitors for Business
  Purposes temporary entry (Mode 4)
• Market access for cultural industries in spite of
  EC sensitivities - Cultural protocol
• Development support for dealing with
• Information asymmetries, EU regulatory regimes,
  interface with EC firms, capacity building, etc.

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Key Points

• Services supplied by government excluded
• Also excluded - nuclear trade in arms
  audio-visual cabotage air transport services
• Subsidies not covered by Agreement
• Government free to regulate
• Government procurement not covered
• Immigration policies procedures not covered

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Structure of Title II on Investment, Trade in
Services E-commerce (Arts. 60-121)

• Chap 1 - General provisions (Arts. 60-64)
• Chap 2 - Commercial Presence (Investment - Arts.
  65-74)
• Chap 3 - Cross Border Supply of services (Arts.
  75-79)
• Chap 4 - Temporary Presence of Natural Persons
  for Business Purpose (Arts. 80-84)
• Chap 5 - Regulatory Framework (with sectoral
  rules)

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Regulatory Framework (Chapter 5)

• General provisions - mutual recognition (Art.
  85), Transparency (Art. 86), Procedures (Art. 87)
  
• Computer (Art. 88)
• Courier (Arts. 89-92)
• Telecoms (Arts. 94-102)
• Financial services (Arts. 103-108)
• Maritime transport (Art. 109)
• Tourism (Arts. 110-118)
• Chap 6 - Electronic commerce (Arts. 119-120)
• Chap 7 - Cooperation (Art. 121)

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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 to
  supply EU market
• Eliminate the need to negotiate new bilateral
  investment treaties

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Rules on Commercial Presence or Investment (Arts.
65-74)

• Market access
• National Treatment and MFN
• Excludes - nuclear materials arms audiovisual
  cabotage air traffic rights
• Forbids corruption by investors
• Parties must maintain core labour standards
• Parties must safeguard the environment
• Forbids lowering of environmental, labour or
  occupational health safety standards to attract
  investment

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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

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Rules on Services

• Only open what you schedule
• 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

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Short term visitors for business purposes

• EC and CF states to facilitate temporary entry
  for the following activities for up to 90 days
  (no work permits needed)
• Research design
• Marketing
• Training seminars
• Trade fairs and exhibitions
• Sales purchasing
• Tourism personnel

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Services Market Access Granted

• CF - Positive list for services commitments like
  GATS template aimed for sectoral coverage to
  65-75 of services sectors but fell far short.
  (Dom Rep is higher). Some opening in the future.
  Very limited Mode 4 commitments.
• EC - Different structure of schedule 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 commitments start in 2011 (EC-10) and
  2014 (Bulgaria Romania)

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Rules on E-commerce

• Parties recognize e-commerce increases trade
  opportunities in many sectors
• agree to promote the development of electronic
  commerce between them, in particular by
  co-operating on the issues raised by electronic
  commerce
• the development of electronic commerce must be
  fully compatible with the highest international
  standards of data protection, in order to ensure
  the confidence of users of electronic commerce
• deliveries by electronic means shall be
  considered as the provision of services and not
  subject to customs duties.

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Dialogue on E-commerce

• (a) the recognition of certificates of electronic
  signatures issued to the public and the
  facilitation of cross-border certification
  services,
• (b) the liability of intermediary service
  providers with respect to the transmission, or
  storage of information,
• (c) the treatment of unsolicited electronic
  commercial communications,
• (d) the protection of consumers in the ambit of
  electronic commerce,
• (e) any other issue relevant for the development
  of electronic commerce.

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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

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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.

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Computer and related services

• The EU opened all of the following
• a. Consultancy services related to
  the installation of computer hardware (841)
  
• b. Software implementation services (842)
• c. Data processing services (843)
• d. Data base services (844)
• e. Other

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Contractual Service Suppliers (CSS)

• Individuals (natural persons) from an EU state or
  CARIFORUM state employed by a company (juridical
  person) of that EU or Cariforum state which has
  no company in the territory of the other Party
  and which has concluded a bona fide contract to
  supply services with a final consumer in the
  latter Party requiring the presence on a
  temporary basis of its employees in that Party in
  order to fulfil the contract to provide services.

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Conditions for CSS

• Must have university degree (except entertainers,
  models, chefs)
• Stays for up to 6 months in a year or length of
  contract in each EU state or each CF state
• Must have worked for at least one year for
  company have 3 years experience
• CSS must be paid by employer in home country
• Can only do work stipulated in service contract
• Limited to the number of persons necessary to
  supply the contract.

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Temporary entry access for professionals (CSS)
from Cariforum 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

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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 (university degree not
  required)
• Fashion model services (university degree not
  required)
• 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 (university degree not
  required)

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Independent Professionals

• Individuals (natural persons) engaged in the
  supply of a service and established as
  self-employed in the territory of an EC Party or
  Signatory Cariforum State who have no firm or
  company in the territory of the other Party and
  who have concluded a bona fide contract to supply
  services with a final consumer in the latter
  Party requiring their presence on a temporary
  basis in that Party in order to fulfil the
  contract to provide services.

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Access in EU for Independent Professionals (IPs)
from CF

• 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

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Protocol on Cultural Cooperation

• Deals with artists cultural practitioners not
  selling services but collaborating, training,
  etc.
• EU states will each grant temporary entry for up
  to 90 days in a 12-month period - artists,
  actors, technicians and other cultural
  professionals and practitioners involved in the
  shooting of films or TV programmes
• Artists and other cultural professionals and
  practitioners such as visual, plastic and
  performing artists and instructors, composers,
  authors, providers of entertainment services and
  other similar professionals and practitioners

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Cultural Protocol

• Art V - audio visual provides for co-productions
  between EU and CF with 80-20 formula to qualify
  as European content in all 27 states. Can
  cumulate project value across CF
• Technical assistance through other means -
  training, exchange of information, expertise and
  experiences, etc.

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Development Cooperation (Chap 7)

• 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 to be proposed