Published by Post and Parcel

FedEx and UPS have hailed the US government’s intention to join international negotiations in Geneva later this year, designed to bring down services trade barriers.

The negotiations for a new International Services Agreement are expected to take place within the next three months, ahead of a ministerial meeting of the World Trade Organisation in December.

It will involve nations including Australia, Canada, Chile, Chinese Taipei, Colombia, Costa Rica, Hong Kong China, Iceland, Israel, Japan, Korea, Mexico, New Zealand, Norway, Pakistan, Panama, Peru, Switzerland and Turkey.

The talks will also include the European Union negotiating on behalf of its member countries.

The countries involved in the talks account for nearly two-thirds of global trade in services.

The White House wrote to Congress yesterday to confirm the US will participate in the talks, describing the international trade agreement on the supply of exportable services as a “tremendous opportunity”.

United States Trade Representative Ron Kirk told US lawmakers: “If business services achieved the same export potential as manufactured goods globally, U.S. exports could increase by as much as $800bn. To begin to realize this potential, we need to surmount a range of barriers that lock out, constrain, or disrupt the international supply of services.”

Trade talks under the World Trade Organisation’s General Agreement on Trade in Services (GATS) mandates have stalled since negotiations began in the year 2000.

“Tremendous opportunity”

FedEx and UPS, whose own trading performances are closely linked to the state of the US and global economies, since much of their business is focussed on facilitating trade through shipping services, are strongly supportive of the US involvement in the trade talks.

UPS said the deal would open up new trading opportunities for businesses large and small.

Dan Brutto, the UPS International President, said the US had to be a leader in trade negotiations at this “critical point” in the global economic recovery.

“Services are the lifeblood of our economy and of global commerce,” said Brutto. “It you want to make it, move it, buy it, or sell it, you need services – professional, financial, retail services and, of course, the delivery and logistics services to get products to market.”

FedEx said the trade talks, and the US intention to participate, were “great news” for the US economy and world trading system.

The Memphis-based shipping giant said services account for 75% of US economic output, yet the country exports only 3% of its gross tradable output “largely because international services markets remain heavily restricted”.

FedEx said potentially the international trade negotiations could remove many of the investment and other market access barriers that the shipping industry faces around the world, as well as being good for customers in making it easier to use services across the globe.

“Engineers, architects, accountants, healthcare providers, and of course transportation companies will all benefit from new opportunities to expand their businesses internationally,” the company said.

Ralph Carter said the liberalisation of international trade services market had “stalled” under the World Trade Organisation’s effort over the last decade, and suggested this year’s ISA could prove a “unique opportunity”.

“Existing rules on trade in services have many shortcomings and the also don’t address many of the issues that services companies face in the 21st Century,” he said.

“The ISA would seek to open up new services markets by removing barriers to service investment and it would also strengthen and modernise the rules for services trade to ensure that service companies have a level competitive playing field.”

Carter suggested that if the 21 major trading partners sign up to the ISA, other countries could join later to set up a global standard