WASHINGTON The outline of an international trade deal opening up services markets is in place, U.S. Trade Representative Michael Froman said on Wednesday, ahead of the next round of negotiations next week.
The Trade in Services Agreement (TISA), which seeks to free up trade in services such as communications and banking, is being negotiated among 50 countries that make up nearly two-thirds of global services trade.
"The basic framework of the agreement is in place, initial market access offers have been exchanged, and sector-specific work in areas like telecommunications and financial services is in full swing," Froman said, while cautioning there was still a lot of work to do.
Issues that come under the umbrella of TISA range from cross-border data flows and monopolies by state-owned enterprises to air pollution monitoring, shipping and postal services.
In the United States, services account for 75 percent of economic output and 80 percent of private sector jobs; in the European Union, they account for almost 75 percent of gross domestic product and employment.
But their importance in trade is often under-estimated. The hidden value of services can be almost as much again as raw services export figures suggest, according to calculations from the World Trade Organization (WTO) and the Organisation of Economic Co-operation and Development (OECD).
Taking into account the value added by services such as transport, logistics, finance and communication, the services sector contributes around half the value of total exports in the United States, the United Kingdom, France, Germany and Italy.
In China, where services make up only about 10 percent of gross exports, services value-added amounts are worth nearly one-third of the total.
The WTO estimates that services account for more than 40 percent of world trade, if measured in value-added terms, and two-thirds of the world's foreign direct investment stock.
In 2009, the last year for which value-added data is available, services exports from the Group of Seven advanced economies totaled $1.36 trillion.
But the OECD and WTO data show the value added to all G7 exports from services was more than $1 trillion on top of that, or $2.52 trillion in total.
Assuming no major changes since then, the value that services added to G7 exports in 2013 would be about $3.72 trillion, compared with gross services exports of $1.88 trillion.
The seventh round of TISA talks will take place next week, involving the European Union, the United States, Australia, Canada, Chile, Colombia, Costa Rica, Hong Kong, Israel, Japan, South Korea, Mexico, New Zealand, Norway, Panama, Paraguay, Pakistan, Peru, Switzerland and others.
An official close to the talks said there was no timeline for completing TISA. All but two participants had put up market access offers, he said.