Services Trade Benefits Americans
• Services – such as accounting,
finance, insurance, education, medicine, engineering, travel, tourism, construction, express delivery, advertising, retailing,
telecommunications, computer services, environmental services – accounts for approximately 64
percent of total output in the United States.
• In 2002, U.S. exports of
commercial services totaled $276 billion, doubling since 1990 and contributing to a commercial services trade surplus of more than $58 billion. U.S. services account for approximately 28 percent of the value of America’s exports.
• Service industries account for 8
out of every 10 jobs in the United States, and provide more new jobs than the rest of the U.S. economy combined. Over the past two decades, the services
sector has added almost 40 million employees across the full range of services: doctors,
nurses, lawyers, bankers, insurance adjusters, software engineers, tour operators, teachers, pilots,
and many other professions.
Services Trade Benefits Developing Countries
• Services liberalization enhances
the gains from liberalization in goods and agriculture by making the infrastructure of modern economies – express delivery
services, reliable communications, financial services, transportation services and others – more
• For poor countries, the services
trade offers innovative opportunities to jump-start growth and development, and to tackle endemic poverty. Services promise
poorer countries a chance to leap over the industrial revolution and directly enter the information
• The World Bank has reported that
services typically account for around 54 percent of GDP in developing countries, and that services are the fastest growing
sector in many of the least developed economies.
The U.S. Approach to Services Negotiations
• The United States is seeking
broad removal of foreign barriers in sectors such as financial services, legal services, telecommunications, express delivery,
energy services, healthcare, higher education, and environmental services. In line with WTO
rules, the U.S. requests of foreign countries are mindful of other countries' desire to
protect consumers, the environment, and other vital domestic interests. The U.S. offer is the result
of a detailed consultation process with state and local governments and regulatory authorities in the
• In previous rounds of
negotiations on the General Agreement on Trade in Services (GATS), the United States made commitments in services well beyond those of
most nations. America’s WTO partners have asked the U.S. to continue this trend with
additional market opening measures. The U.S. intends to do so – if others are willing to catch up to
our current levels of openness.
• The U.S. services offer is part
of a long-term process of expanding choice and opportunity for U.S. consumers of commercially important services. The offer
addresses some of the requests of trading partners by incorporating new liberalization, filling gaps
in the current U.S. schedule, expanding our current GATS commitments, and offering to undertake
new regulatory disciplines if others do the same. Highlights of the U.S. offer:
· Insurance: The U.S. offer demonstrates the willingness of the U.S. to
build on its already substantial GATS commitments for insurance. The U.S. offer
provides more expansive access for insurance brokers and agents. Foreign brokers are
offered broader access to handle large U.S. contracts. In addition, the U.S. offer build on
existing entry rights for insurance branches.
· Banking and Other Financial
Sectors: Reduces registration requirements
that may discriminate against foreign-owned banks and establishes a
framework for financial modernization so that non-U.S. entities can provide a variety of
competitive financial services.
· Telecommunications and
Information Services: Allows foreign
ownership of cable television networks and allows non-U.S. satellite companies to broadcast
directly to American viewers. Expanded ability for foreign companies to provide information
services, such as Internet, directly to U.S. customers.
· Environmental Services:
The U.S. proposes to enhance U.S.
environmental services commitments by reflecting today’s focus on pollution prevention
services, and emphasizing the importance of further liberalization in this
· Energy Services:
The U.S. is proposing to offer foreign
companies market access for services incidental to mining and energy distribution, and new
commitments for pipeline storage of fuels, storage and warehouse services, bulk storage of
liquids and gases, and some technical testing and analysis services. The U.S. offer does
not contain any commitments on production of energy, mining, or ownership of
Delivery: New commitments to provide access
the U.S. market and give equal treatment to foreign-owned express delivery
companies are extremely competitive in these activities
What the U.S. is NOT Offering
• Government Monopolies
Supplying Services: The U.S. offer applies
only to services open to private sector participants and does not give foreign service
suppliers the right to acquire or invest in government monopolies supplying services. For example,
the U.S. offer proposes no commitments in the monopoly area of the U.S. Postal Service and
would in no way privatize any aspect of U.S. postal activity.
Interests: The United States and sub-federal
governments will continue to be able to establish, maintain, and fully enforce domestic laws protecting
consumers, health, safety, and the environment.
• U.S. Citizen- and Minority-
Specified Programs: The offer does not
require changes to federal and sub-federal assistance programs that are available only to
U.S. citizens or U.S.-owned companies, such as Small Business Administration loans, Overseas
Private Insurance Corporation (OPIC) insurance, Trade and Development Agency
financing, and other programs.
• Non-Interference with U.S.
Education Institutions: Nothing in the offer
will interfere with the ability of individual U.S. education institutions to maintain autonomy in
admissions policies, setting tuition rates, and developing curricula or course content. The
offer does not apply to public elementary or secondary schools, or to public funding. There is no
intention to promote the privatization of public educational institutions.
• No Privatization or
Deregulation of Water Distribution: The GATS
does not require privatization or deregulation of any public service, including water supply or
distribution services. The U.S. offer does not include water supply or distribution. GATS is not the
appropriate vehicle for pursuing privatization of U.S. public services.