Global Services Network Alert

September 27, 2004

UNCTAD Foreign Direct Investment Report. In its annual World Investment Report, the UN Conference on Trade and Development (UNCTAD) reports that foreign direct investment (FDI) is increasingly shifting toward services. From 1989-91, an average of 55% of total outward FDI flows worldwide were in the services sector, a figure that increased to 71% by 2001-02. Services-related FDI flows to developing countries shifted more dramatically, moving from 39% in 1989-91 to 77% by 2002-02. The biggest subsectors into which FDI has been directed include finance, business activities, transport, storage, and telecommunications, and trade. Among the factors driving this shift in the composition of FDI are the growing share of services as a percentage of countriesí GDP, and a trend toward the opening of many service industries that have, until recently been relatively closed to foreign participation. The report is available at http://www.unctad.org/wir. For more information, contact: Karl P. Sauvant, Director, Division on Investment, Technology and Enterprise Development, UNCTAD, at Tel +4122 917 5707.

Putting GATS Back on Track. Submission to APEC by a global services coalition representing services sectors in Australia, Canada, Chile, Europe, Hong Kong, Japan, and the US. This paper calls on APEC Leaders and Ministers, as representatives of the biggest regional trade body, to give a strong boost to the WTO talks at their meeting in Santiago this November, and in particular, to support progress in the services negotiations. This paper was recently submitted to, and endorsed by, the APEC Business Advisory Council (ABAC), who will reference it in their annual report. In addition, The APEC Secretariat has been asked to submit the paper to the APEC Economic Leaders Meeting in advance of the Santiago meeting. The paper is available at http://www.hkcsi.org.hk/submission/2004/0409_apec_submission.pdf.

Current Government Data Provide Limited Insight into Offshoring of Services. US Government Accountability Office (GAO) report, September 2004. This GAO study notes that it is extremely difficult to make accurate judgments about the scope of offshoring given the lack of comprehensive data, but that offshoring appears to have a minor impact on the broader US economy. The study says that although most industries commonly associated with offshoring have experienced greater than average job losses in recent years, other factors have also contributed to the drop. It says that the relocation of U.S. jobs overseas accounted for just 13,000, or 0.9 percent, of the 1.5 million layoffs reported in 2003. But data from the Department of Labor's Mass Layoff Survey is incomplete because only layoffs by companies with more than 50 employees are tracked and only if a company has laid off at least 50 people in a five-week period. The layoff data demonstrated the difficulty the GAO found in trying to quantify offshoring, but the agency pledged to continue studying it. The full report is available at http://www.gao.gov/cgi-bin/getrpt?GAO-04-932.

Submission on Regional Trade Agreements (TN/RL/W/163), September 13, 2004. This paper discusses issues surrounding the consistency of regional trade agreements in services with GATS Article V (economic integration). In particular, it focuses on questions pertaining to the Article's "substantial sectoral coverage" criteria, and the meaning of "absence or elimination of substantially all discrimination." The paper is available at: http://docsonline.wto.org:80/DDFDocuments/t/tn/rl/W163.doc.

World Services Group Annual Meeting, New York, September 17-18. The World Services Group is a global membership association whose members are large local, national and international providers of professional business services. The meeting included a series of discussions on topics such as prospects for global trade in professional services, providing competitive advantage to clients, impediments and challenges to greater EU business integration, and other issues. Highlights and presentations from the World Service Groupís annual meeting are available at http://www.worldservicesgroup.com/ny2004.asp.