U.S. to Enter Services Agreement Talks

Will enter into negotiations with 20 countries on a new international services agreement, which could have implications for retailers.

WASHINGTON — U.S. Trade Representative Ron Kirk notified Congress on Wednesday that the U.S. plans to enter into negotiations with 20 countries on a new international services agreement, which could have implications for retailers.

This story first appeared in the January 17, 2013 issue of WWD.  Subscribe Today.

The negotiations will begin in Geneva within the next 90 days with 20 trading partners that represent nearly two-thirds of global trade in services. The initial group of trading partners will include the European Union, Australia, Canada, Chinese Taipei, Colombia, Costa Rica, Hong Kong, China, Iceland, Israel, Japan, South Korea, Mexico, New Zealand, Norway, Pakistan, Panama, Peru, Switzerland and Turkey.

“Every $1 billion in U.S. services exports supports an estimated 4,200 U.S. jobs in America,” Kirk said in a letter to lawmakers on Capitol Hill. “If business services achieved the same export potential as manufactured goods globally, U.S. exports could increase by as much as $800 billion. 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. An ambitious, high-standard international services agreement presents a tremendous opportunity to remove these impediments and boost U.S. economic growth and support additional jobs.”

It is a new path forward for World Trade Organization member nations, which have been deadlocked for more than a decade over a broader global trade accord aimed at liberalizing billions of dollars in trade, including services, manufacturing and agriculture products.

WTO talks on the broader accord have been stalled since negotiations were launched in Doha, Qatar, in November 2001, primarily over vast differences between rich and poor nations over how to cut agriculture subsidies.

The new international services agreement launch is considered a greatly scaled back objective that will not include manufacturing or agriculture.

But it could bring new opportunities for retailers.

“Retailers welcome the launching of negotiations on a services agreement, and hope that it can be the catalyst for a more comprehensive WTO agreement that would include the large emerging retail markets of China, India and Brazil,” said Erik Autor, vice president and international trade counsel at the National Retail Federation. “Consumer spending in these markets is growing at a much higher rate than in the mature markets in the U.S. and Europe that are still struggling to overcome the effects of the global recession and high unemployment. An agreement would include market opening in distribution services, which includes retail. As U.S. retailers increasingly look beyond American borders to reach foreign customers through brick-and-mortar, Internet and other retail channels, the opportunities to address restrictions to foreign direct investment by retailers and other barriers hindering retail operations become ever more important.”