EU JAPAN EPA Trade in Services, Services Domestic Regulations and - - PowerPoint PPT Presentation

EU – JAPAN EPA “Trade in Services, Services Domestic Regulations and Mutual Recognition Agreement”

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This presentation has been prepared with the sole purpose of simplifying the understanding of some parts of the EU-Japan EPA and bears no legal standing.

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A. EU & Japan Trade in Services: Facts & Figures B. The Services chapters and annexes C. Market access Pillar (incl. Public procurement in services) D. Regulatory disciplines and cooperation E. Movement of natural persons F. Mutual recognition of qualification G. Protecting Public services and policies

Ta Table le of Content

IM IMPORTANCE OF TRADE IN IN SERVICES IN IN THE HE EU-JAPAN TRADE RELA LATIONSHIP IP

21% 21% 79% 79% 63.7%

36.3% of f EU exp xports to Ja Japan = Se Servi vices

60759 34652

EU Exports to Japan – 2017 – Mio€

• %

Goods Services 36.3%

Total: 95 411 Mio€ 68874 18307

Japan Exports to EU – 2017 – Mio€

• %

Goods Services

Total: 87 181 Mio€

21% 21%

A. . EU & Jap Japan Tra rade in in Se Services: Fa Facts & Fig Figures

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19,060 20,246 24,976 24,656 25,567 29,184 31,576 34,652 34,200 14,194 15,585 15,548 14,572 14,953 16,284 18,455 18,307 19,305 3,973 3,975 4,616 6,305 6,… 7,864 8,483 8,428 8,231 2,875 4,188 3,155 3,061 3,205 3,685 4,252 4,862 6,026

5,000 10,000 15,000 20,000 25,000 30,000 35,000 40,000

2010 2011 2012 2013 2014 2015 2016 2017 2018

(Mio € - 2010-2017) EU Exports EU Imports UK Exports UK Imports

EU and UK Trade in Services with Japan

Source: Eurostat bop_its6_det.

IMPACT OF BREXIT: UK = 24% of EU Exports of Services; and 31.2% of EU Imports!

EU Surplus: +14 895 €Mio

+79.4% in 9 years

A. . EU & Jap Japan Tra rade in in Se Services: Fa Facts & Fig Figures

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EU Exports of services to Japan per countries (Extra EU) – €Mio – 2018

8231.6 5457 5368 3935 1981 1424 1289 1175.21005 996 738 582.7 471.6 302 250.6 175.8 122.2 85 77.6 41 36.6 25 23.2 23.1 19.9 18 4

1000 2000 3000 4000 5000 6000 7000 8000 9000

Source: Eurostat bop_its6_det.

UK Exports represent + 25% of EU Export of services to Japan!

A. . EU & Jap Japan Tra rade in in Se Services: Fa Facts & Fig Figures

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694 414.8 4865.9 4161.7 101.7 737.9 6388 2817 5220.2 7694.8 294.2 105.2 167.9 369.8 4162 1602.5 22.2 191.6 3097.1 3549.4 729.4 5378.8 20.7 61.3 1000 2000 3000 4000 5000 6000 7000 8000 9000

EU Services Exports and Imports to Japan per sectors (2018 - € Million)

Source: Eurostat 2019 – Note: Other business services comprise mainly: research and development, professional and management consulting services, technical, trade-related services.

Exports - Total 34 200 – Imports - Total: 19 305

22.5% of Exports 14.2 % 12.1% 18.7% 15.2% 7.4%

A. . EU & Jap Japan Tra rade in in Se Services: Fa Facts & Fig Figures

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EU Exports and Imports to Japan per sectors “Other business services” - (2018 - € Million)

2221.1 460 92.9 669.1 544.2 23.1 529.8 137.2 4.2 185.8 281.9 3040.5 1346.3 107.1 31.8 553.6 450.7 4.3 273.6 556.9 7.8 408.2 532.5 1131.9

• 400

100 600 1100 1600 2100 2600 3100

A. . EU & Jap Japan Tra rade in in Se Services: Fa Facts & Fig Figures

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Benefits of EU-Japan EPA for Services Sectors

• Binding of current regulatory practice = increase legal certainty from WTO

GATS Level (1995), and build on TiSA and TPP negotiations

• Transparency on Domestic regulation and licensing procedures
• Independent regulators, universal services, etc.
• Process for Mutual recognition of qualification of professional

services

• Use of negative approach = more transparency for businesses, who can

easily find out what they cannot do in Japan

• Increase access to Japan Public Procurement for EU services providers
• Opens up services markets, in particular
• Fin

Financial serv services, . Tel elecommunications,

• Pos
• stal an

and exp xpress del elivery ry, . . Dis istribution serv services,

• Prof
• fessional serv

services, an and . Tran ansport serv services

A A summary of f th the results of f th the EPA for th the services sect ctors

B. . The Se Services ch chapters an and an annexes

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CHAPTER 8 = = TR TRADE IN IN SER ERVICES, INV INVESTM TMENT LIB IBERALISATION AND EL ELECTRONIC COMMERCE

• SECTION A :

General provisions

• SECTION B :

Investment liberalisation

• SECTION C :

Cross-border trade in services

• SECTION D :

Entry and temporary stay of natural persons

• SECTION E :

Regulatory framework

• SUB-SECTION 1 : Domestic regulation (Incl. MRA Qualifications)
• SUB-SECTION 2 : Provisions of general application
• SUB-SECTION 3 : Postal and courier services
• SUB-SECTION 4 : Telecommunications services
• SUB-SECTION 5 : Financial services
• SUB-SECTION 6 : International maritime transport services
• SECTION F :

Electronic commerce

WHAT’S IN THE EU-JAPAN EPA FOR SERVICES?

B. . The Se Services ch chapters an and an annexes

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Ann nnex 8 Annex 8-A Regulatory cooperation on financial regulation Annex 8-B Schedules for chapter 8 Annex 8-B I Reservations for existing measures Annex 8-B II Reservations for future measures Annex 8-B III Business visitors for establishment purposes, intra-corporate transferees, investors and short-term business visitors Annex 8-B IV Contractual service suppliers and independent professionals Appendix IV Limitations of business activities of contractual service suppliers and independent professionals in Japan Annex 8-C Understanding on movement of natural persons for business purposes

44 444 4 pag ages ou

• ut of
• f 15

1570 70 pag ages total l of

• f EPA =

=  28 28% of

• f th

the text xt of

• f EPA= on
• n Se

Servic ices is issu sues B. . The Se Services ch chapters an and an annexes

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• Bidding level for EU & Japan before EPA = GATS 1995
• Scheduling of Market access & National Treatment commitments using a

Negative li list (2nd time for the EU)  GATS +;  TiSA+;  CP TPP+  More Commitments on Mode 1 (Cross border transactions)  Mode 3: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 commitments on Professional & Business services, Environmental services, energy related services, on financial services & insurance, postal and express, transport services, etc.  But not much improvements for the professional services!

C. . Mar arket ac access pill illar ar

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• Adoption of a strong Horizontal Chapter on Disciplines for Domestic Regulation

(Chapter 18 of JEEPA):  Transparency of the regulation  Prior consultation of stakeholders  Impact assessment  transparency of the licensing requirements and procedures (Contact Point, Proportionate to the goal, Clear Objectives, least burdensome administrative costs as possible, short and predefined delays, “reasonable fees”, right of appeal)

• Sector specific disciplines (e.g. on Telecoms, on Postal, on Energy, Environment,

maritime and air transport, financial services, etc.) and Sector specific regulatory cooperation (living agreement)

• Disciplines on State Own Enterprises (SOEs)
• Japan and EU active in the on-going WTOJoint Statement Initiative in WTO

D.

• D. Re

Regula latory dis isci ciplin lines an and co cooperation Pill illar

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• A key priority for EU businesses in EU-Japan EPA
• Temporary period only, not permanent migration
• Negotiate faster Business Visa and Work permits delivery procedures:

Visa facilitation (Sensitive in EU – Competence- allowing spouses to work – a premiere!)

• In all Categories of Natural Persons Covered under Mode 4:

1) Intra-Corporate Transfers (ICT)

• Managers
• Specialists
• Graduate Trainees

2) Business Visitors (BV) 3) Contract Service Suppliers (CSS) (Employees of Juridical Persons) 4) Independent Professionals (IP)

E. . Movement of

• f Na

Natural l Persons

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• The Commission and Canada Federal government have found a way to go forward. A

Framework Agreement in CETA 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), by being annexed to the CETA.

• The European and Canadian architects have already agreed on their Recommendations for

an MRA, which is now under scrutiny by the MRA Committee of CETA.

• A similar approach has been included into EU-Japan FTA, but the text is much less precise.

There are no specific “Guidelines for the sectors”. And no specific “MRA Committee”, but the “Committee on Trade in Services, Investment Liberalisation and Electronic Commerce” (Art. 22.3)

• Article 8.35 states that “Each Party shall encourage the relevant professional bodies in its

territory to provide joint recommendations on mutual recognition to the Committee”.

• “Where the requirements are satisfied, the Committee shall establish the necessary steps

to negotiate, through their competent authorities, of a mutual recognition agreement.”

F.

• F. MRA

RAs on

• n Pro

rofessional l quali lification

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• Nothing in JEEPA prevents governments and local public authorities from regulating in the public interest, including for

delivering public services, or adopting measures to protect or promote Japanese and European cultures.

• Services of General Interest and Public Services like Heath Services, Social services,

Education services, and Water distribution services have not been negotiated in CETA.

• EU applies 3 layers of protection on these various public services in its commitments taken in trade agreements (WTO or

Bilaterals) : 1. “Services supplied in the exercise of the government authority” are excluded form trade deals (ex: Defence, Police, Justice et Public Administration). 2. Public Monopolies and concessions:

“In all EC Member States services considered as public utilities at a national or local level may be subject to public

monopolies or to exclusive rights granted to private operators.”

• A Explanatory Note specifies that: “Public utilities exist in sectors such as (…) environmental, health, transport

services (…) 3. For Public services in competition with private services (schools, universities, hospitals): Difference between establishments “privately funded” and those “receiving public funds”. E.g. Are considered as « public » schools where teachers are civil servants (payed by the State), hence, excluded from commitments.

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G.

• G. Protectin

ing Publi lic se services an and poli

• licie

ies

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INFORMATION SOURCES

Eurostat website: Eurostat bop_its6_det. DG Trade website on Japan: https://ec.europa.eu/trade/policy/in- focus/eu-japan-economic-partnership- agreement/

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This presentation has been prepared with the sole purpose of simplifying the understanding of some parts of the EU-Japan EPA and bears no legal standing.

Thank you for your attention

Pascal Kerneis – Managing Director European Services Forum

QUESTIONS ?