* U.S. is the world's largest services exporter
* Talks include mix of developed, developing countries
* China, India, Brazil have shunned services trade talks
By Doug Palmer
WASHINGTON, Jan 15 The United States said on
Tuesday it plans to negotiate an agreement with the European
Union, Japan and 18 other economies to remove trade and
investment barriers in services ranging from finance to express
Washington, the 27-nation EU and a mix of other developed
and developing countries have been exploring the idea of
launching talks on an International Services Agreement for
nearly a year.
Big emerging countries like China, India, Brazil and Russia
have shunned the talks. They say services negotiations should be
part of a bigger discussion that includes agriculture and
manufacturing trade barriers.
The Doha round of world trade talks, which began in 2001 and
includes all three components, remains hopelessly deadlocked.
That has prompted the United States to explore other options.
"Every $1 billion in U.S. services exports supports an
estimated 4,200 U.S. jobs in America," U.S. Trade Representative
Ron Kirk said in a letter notifying Congress of U.S. plans to
launch services talks. "If business services achieved the same
export potential as manufactured goods globally, U.S. exports
could increase by as much as $800 billion."
Services account for about 80 percent of U.S. employment and
the United States is already the world's largest services
exporter, with international sales of about $1.7 trillion
annually, an amount equal to about 11 percent of U.S. gross
Even so, "international services markets remain heavily
restricted and U.S. service suppliers face a wide range of
barriers to doing business in overseas markets," said Mike
Ducker, president of international operations for FedEx Express.
Senior congressional lawmakers also welcomed the launch of
"As the global economy evolves, services exports like
tourism and transportation must be an important part of our
trade agenda to create jobs and strengthen our economy here at
home," Senate Finance Committee Chairman Max Baucus said.
The Geneva-based services negotiations will include
Australia, Canada, Chile, Colombia, Costa Rica, the EU, Hong
Kong, Iceland, Israel, Japan, Mexico, New Zealand, Norway,
Pakistan, Panama, Peru, South Korea, Switzerland, Taiwan, Turkey
and the United States, Kirk said in the letter to Congress.
The group represents nearly two-thirds of global services
and the United States hopes other countries will eventually
decide to join the talks, Kirk said.
Washington intends to begin talks on the pact within the
next 90 days and will press for rules to promote services trade
over the Internet as part of the talks, he said.
The Peterson Institute for International Economics
conservatively estimated in April that the proposed agreement
could increase annual services exports among 16 core members by
$78 billion. Since that study, four more countries have
expressed interest in joining the talks.
"In absolute terms, the United States and the European Union
would see the largest export gains, around $14 billion and $21
billion, respectively," the Peterson report said.
If Brazil, China and India were to join the talks, the trade
gains would expand by about 30 percent, the report said.