The EU Trade Policy: what s in for accounting firms?

Transcription

1 EGIAN Assembly 19 th November 2018 Hotel Thon Bristol Stephanie - Brussels The EU Trade Policy: what s in for accounting firms? Pascal Kerneis Managing Director ESF (European Services Forum)

2 1) What is ESF? Table of content 2) International trade & investment in services 3) EU Trade Policy for Services and Investments 4) Impact of Brexit on EU Trade Policy for Services and Investment 5) What should EGIAN Members look at in EU Trade Agreements? A. Market access Pillar B. Regulatory disciplines and cooperation C. Movement of natural persons D. Mutual recognition of qualification

3 1) What is ESF?

4 Insurance Banking Business services: IT & Computer; consulting, advertising, aftersales services, News Agencies Professional services: Legalservices, Accountants, Architects, Engineers, etc. Construction services Distribution services Postal & Express Delivery Audio-visual services Energy related services ESF Membership covers a large range of services sectors and Horizontal federations: Environmental services For more information, see Telecommunication services Tourism Air Transport Maritime Transport & BUSINESSEUROPE Confederation of Danish Industries (DI) Confederation of Finnish Industries (EK) Confederation of Swedish Enterprises (SN) Irish Business and Employers Confederation (IBEC Confederation of French Enterprises (MEDEF) 98% of EU Services companies, only approximately 20% export

5 Some ESF COMPANY MEMBERS : For more information, see

6 Some of the ESF Associations Members

7 2) International trade & investment in services : Facts and Figures

8 Size of global trade Export of goods and services (23%) (including intra EU) Bio US$ World Exports of Goods (77%) World Export of Services Total: Bio US$ Source: WTO WTS 2018

9 World Economy: Percentage of GDP by Sector agriculture Industry Services EU UK China Brazil India Canada USA

10 THE EU IS BY FAR THE WORLD BIGGEST EXPORTER OF TRADE IN SERVICES If we take intra (1278) and extra EU (1009) together, EU export of services represent % of global export of services EU is by very far the biggest exporter of services: 24.9 % of world export of services Services Exports in Billion $US Source: WTO ITS 2018 Figures for 2016

11 EU Services Exports and Imports per sectors ( Billion) Exports -Total Imports -Total: % of Exports % % % % % Incl. Accounting & Auditing services 10.3% 7.5% 3.4% % % 0.8% Source: Eurostat 2016 Note: Other business services comprise mainly: research and development, professional and management consulting services, technical, trade-related services.

12 66.7 Bio Professional & Management Consulting services include: 1) legal services; 2) Accounting, auditing, bookkeeping, and tax consulting services; 3)Business and management consulting and public relations services; 4) Advertising, market research, and public opinion polling services

13 6 5 Evolution of EU28 Trade in Accounting Services (1)(Bio ) % of professional & management consulting EU Exports Exports Imports Balance (1) Services: Accounting, auditing, bookkeeping, and tax consulting services Source: Eurostat : [bop_its6_det]

14 Share of Services value added in EU & Germany GoodsExports Share of Domestic & Foreign Services in Goods Exports -% EU27 = 39.9 % USA = 32.1% 42.1% % 25% % Domestic Services Foreign Services Domestic Services Foreign Services Source: TiVA

15 IMPORTANCE OF TRADE IN SERVICES for EU & UK Comparison between BoP & TiVA 58.3% of total EU VA Exports are Services Extra EU Exports in BoP $Bio EU Exports in TiVA % 32.2% % Goods Services Goods Services Total Export EU= 3131 $Bio UK Exports in BOP $Bio UK Exports in TiVA % 43.8% % Goods Services Goods Services Total Export UK = 792 $Bio Source: WTO WTS2018 & TiVA

16 3) EU Trade Policy for Services and Investment

17 Only 30 Countries, not 164 WTO Members! Market access level WTO UR ( ) DDA Offers (July 2008) Multilateral ««The The voice voice of of the the European European Service Service Industries Industries for for International International Trade Trade Negotiations Negotiations in Services in Services»» MULTILATERAL versus NEW EU BILATERAL TRADE POLICY China Taiwan Saudi-Arabia Vietnam Ukraine Cambodia Russia Kazakhstan WTO Access. since ! TI SA CariForum(15) Korea Columbia Peru Ecuador Central America (6) Mercosur (4)(?) Old EU FTA Plurilateral Mexico (Rev) Chile (Rev) Euromed EPA US FTA + US Parity Market Acc + Public Proc + Mode 4 + New EU FTAs Bilateral Ukraine Georgia, Moldova, Egypt, Morocco, Tunisia, Turkey Canada Singapore India! Malaysia! Vietnam Japan USA! Thailand! Philippines! Australia & NZ Indonesia DDA+ EU-China + TW + HK BIA Market Acc + Public Proc.+ IPR + BIT + SOE + Reg. Coop. + Approximation (EU law) DC FTAs

18 EU Trade Policy: Concluded Agreements since 2000: 35 countries 1. EU-Mexico(2000) (few and low services Commitments)(Rev. Start 2016)(deal 2017! 2. EU-Chile (2002)(modest services commitments) (Rev. Start 2017) 3. EU-Cariforum(15 countries) (2008) 4. EU-South Korea (ratified en 2011) (current Benchmark) 5. EU-Colombia(ratified en 2012) 6. EU-Peru (ratified en 2012) (EU-Ecuador signed 2015) 7. EU-Central America (6 countries) (ratified en 2012) 8.EU with Eastern Partnership: Ukraine,Georgia, Moldova (Nov 2013) (Approximation EU Acquis) (Armenia: suspended) 9. EU-Canada CETA (Political deal on trade: Oct. 2013, on Investment withics: Sep April 2016) (Signed on 30/10/2016 -Ratification:02/2017 Provisional application: 21/09/2017); 10.EU-Japan: (Political deal: 06/07/2017 Agreement in Principle, conclusion 8/12/2017; Signed on 17/07/2018 -Ratification: December 2018) 11.EU-Singapore(Political deal: December 2012, Initialled; September 2013 ECJ Opinion 2/15: 06/05/ Signed on 19 October Ratification in EP?)* 12.EU-Vietnam(Political deal: August 2015; Signature 2018? Ratification in EP: 2018?)

19 On-Going FTA negotiations: New EU Trade Strategy published on Oct EU-MalaysiaFTA (started in rounds, stalled since 09/2012, elections in 06/2013, 8 th round not scheduled yet Positive discussion to resume) Stalled! 2. EU-Thailand (started 03/2013, 1 round: 05/2013, 2 nd round: 09/2013, 3 rd round : 12/2013 Stalled after Military Coup in May 2014) Stalled! 3. EU-India (TIA)(started in elections in 2014 stalled in 2013)(2018?) 4. EU-MERCOSUR FTA (Argentina, Brazil, Uruguay, Paraguay)(Exchange of offers 05/17 Deal 2018?) 5. EU-Indonesia CEPA: Vision Group 2011; 1 st Round: Sept 2016; last Round: 11-15/09/ EU EPAs with ACP countries (5 African regions, incl. 6 SADC countries signed in June 2016, but nearly nothing on services) 7. EU with EuroMed: Egypt, Israel, Jordan, Morocco, Tunisia: 2 nd R: May 2018 Next: 12/ EU-Philippines FTA: 1 st Round (23 May 2016); 2 nd Round (Dec 2016), Duterte??? 9. Revision of EU-Mexico: 1 st Round: 12-16/06/16! Last: 25/09/17. Deal in Principle:21/04/ EU-Myanmar BIA (No Market access, only investment protection): 5 rounds, last 04/ Australia & New Zealand DCFTA: Mandate: 13/09/17 2 nd R Aus: 19/11/18 NZ: 8/10/ Revision of EU-Turkey Custom Union: Consultation in June Revision EU-Chile: Mandate rd Round: May Taiwan BIA? Hong-Kong BIA = scoping exercise to start soon... But China relationship 15. EU-ASEAN RTA: Started in 2007 and halted in 2009 Possibly to be relaunched soon (?)

20 On-Going negotiations (2): BIG FTAs! EU-US TTIP (mandate: June rounds; Last:15 th Round: New-York, Oct Suspended on 18 October 2016! Juncker-Trump Deal on Tariffs in July 2018 Nothing on Services! EU-China Bilateral Investment Agreement: (mandate: Nov 2013; 1 st Round: 01/ nd Round: 03/ 2014, 5 th Round : Beijing,17-19 March 2015). 11th round: in Qingdao -week of 27 June th Brussels: week 26 September th Beijing: week October Disappointing offers so far! TiSA (Plurilateral Trade in Services Agreement) (see below) Deal: 2016: NO Second revised offer 21 October TiSA Ministerial scheduled on 5-6 Dec towards conclusion! Trump Elections on 8 November 2016! TiSA Ministerial and last round (5-6/12/16): cancelled on 9 th Nov! Stalled! No China, No ASEAN, Only Hong-Kong & Taiwan Environmental Goods Agreement (EGA + Services) Deal: 2016: NO BREXIT: EU-UK Trade Agreement? If Withdrawal Deal!? Start: Mid 2019?

21 SERVICES COMPONENTS IN TRADE AGREEMENTS The main components are the Market Access Commitments listed in the schedule of commitments, using Positive listin old agreements; Hybrid List in TiSA, Mexico, Chile; and Negative list in recent FTAs (Canada, Japan, Australian, New Zealand): In addition of the Market access component, Services Chapters in FTAs also include Set of regulatory disciplines : Adoption of a Horizontal Paper on Domestic Regulation Disciplines Notably a Section on Mutual Recognition Agreement on professional services qualifications Adoption of disciplines on temporary mobility of personnel Adoption of disciplines on cross border data flow (Data privacy?)

22 In alleu FTA, Accounting and Auditing services are negotiated! The Classification of services 861 Central Product Classification CPC Version 1.1 (Updated: ) Version submitted to the United Nations Statistical Commission, 5-8 March 2002

23 4) Impact of Brexit on EU Trade Policy for Services and Investment

24 Share of the UK in World trade in services in the EU and in the World Total EU (Incl. Intra EU) = 2287 $Bio 15.2% Total World (Incl. Intra EU) = 5279 $Bio ($Bio) 56.6% % % UK Rest of EU Total UK Total EU (excl. UK) Rest of the world 36.8%

25 EU Exports & Imports of services per countries (Incl. Intra EU) -$Bio Total EU Export (Incl. Intra & Extra EU) = 2287 $Bio : Exports : Imports The UK largely contributes to the EU Trade surplus in services!

26 THE UK REPRESENTS A VERY LARGE PART OF THE EXTRA EU TRADE Exports of GoodsEU28= 2122 $Bio Exports of Services EU28=1009 $Bio Total Exports (Goods & Services) EU28= 3131 $Bio 21% 34.4% 25.3% % 65.6% 74.7% EU27 UK EU27 UK EU27 UK BOP - WTO International Trade Statistics

27 TRADE ASYMMETRY (Incl. Extra and Intra EU Trade)

28 5)What should EGIAN Members look at in EU Trade Agreements?

29 What is the content of a Typical EU DCFTA? What is there in for accounting and auditing? A. Market access Pillar (incl. Public procurement in services) B. Regulatory disciplines and cooperation C. Movement of natural persons D. Mutual recognition of qualification

30 A. A. MARKET ACCESS PILLAR(1) (1) The current binding level of trading partners = GATS 1995 Scheduling of Market access & National Treatment commitments using a Negative list : EU industry preferred choice! GATS +; TiSA+; TPP+ Removal of all equity caps, with negotiated exceptions, Binding of current practise (i.e. Higher Market access than in existing FTAs), with negotiated exceptions, Standstill and Ratchet Clause (to lock in the autonomous reforms) More on Professional services: Auditing and accounting, tax advisors, legal services, architect services, engineering, etc.

31 A. A. MARKET ACCESS PILLAR(2) (2) State of the art Investment protection chapter (BIT): including Investor-to-State Dispute Settlement (ISDS) with transparency process and the new EU Investment Court System (ICS).. Increased public procurement market access in the services sectors: (Construction & related services (architects, engineers, etc.); accounting and auditing of public entities, cleaning and catering services in administrations and all public entities; insurance services; telecom and IT services; security services; environmental services, etc. GPA member or not! Sub federal level/ Regional level/ Cities & Communes Schools, Universities, Hospitals, etc.

32 B. B. REGULATORY DISCIPLINES AND COOPERATION PILLAR Adoption of a strong Horizontal Chapter on Disciplines for Domestic Regulation: Transparency of the regulation Prior consultation of stakeholders Impact assessment Transparency of the licensing requirements and procedures (Proportionate to the goal, Objective, least burdensome administrative costs as possible, short and predefined delays, right of appeal) Sector specific disciplines (incl. in professional services) and Sector specific regulatory cooperation (living agreement) Disciplines on State Own Enterprises (SOEs) Disciplines on cross border data flow (?) (very sensitive in the EU!)

33 C. C. MOVEMENT OF NATURAL PERSONS A key priority for EU businesses (incl. for auditors & accountants) Temporary period only, not permanent migration Negotiate faster Business Visa and Work permits delivery procedures: Visa facilitation (Sensitive in EU Competence?) In all Categories of Natural Persons Covered under Mode 4: 1. Intra-Corporate Transfers (ICT) Managers Specialists Graduate Trainees 2. Business Visitors (BV) = Fly-in/Fly-out 3. Contract Service Suppliers (CSS) Employees of Juridical Persons 4. Independent Professionals (IP)

34 (a) Legal advisory services in respect of public international law and foreign law (b) Accounting and bookkeeping services (c) Taxation advisory services (d) Architectural services and urban planning and landscape architectural services (e) Engineering services and integrated engineering services (f) Medical and dental services (g) Veterinary services (h) Midwives services (i) Services provided by nurses, physiotherapists and paramedical personnel (j) Computer and related services (k) Research and development services (l) Advertising services (m) Market research and opinion polling (n) Management consulting services (o) Services related to management consulting (p) Technical testing and analysis services (q) Related scientific and technical consulting services (r) Mining (s) Maintenance and repair of vessels (t) Maintenance and repair of rail transport equipment (u) Maintenance and repair of motor vehicles, 37 services sectors for contract service suppliers: motorcycles, snowmobiles and road transport equipment (v) Maintenance and repair of aircrafts and parts thereof (w) Maintenance and repair of metal products, of (nonoffice) machinery, of (non-transport and nonoffice) equipment and of personal and household goods (x) Translation and interpretation services (y) Telecommunication services (z) Postal and courier services (aa) Construction and related engineering services (bb) Site investigation work (cc) Higher education services (dd) Services relating to agriculture, hunting and forestry (ee) Environmental services (ff) Insurance and insurance related services advisory and consulting services (gg) Other financial services advisory and consulting services (hh) Transport advisory and consulting services (ii) Travel agencies and tour operators' services(jj) Tourist guides services (kk) Manufacturing advisory and consulting services

35 ON PROFESSIONAL QUALIFICATION MRAS ON The Commission and Canada Federal government have found a way to go forward: They agreed on a Framework Agreement that will be an annex to the CETA. It describes the modalities how MRAs on sector specific professional qualifications, once concluded by the private sector together with the licencing bodies, will finally be transformed into the binding International treaty(fta). All the competent authorities in the Member States and the Provinces have been involved in this solution. The framework agreement is an enabling tool (with Guidelines for the sectors) that ensure legal security to the agreement, if and only if the professional services sectors want to conclude a MRA. The Architects have finalised first ever MRA(April 2018 Nov 2018). Accountingservices?Areyouinterested?

36 THANK YOU FOR YOUR ATTENTION! Pascal KERNEIS Managing Director European Services Forum ESF 168, Avenue de Cortenbergh B 1000 BRUSSELS Tel: Fax: esf@esf.be Website: