The voice of the European Service

« The voice of the European Service Industries for International Trade Negotiations » WTO Symposium on Movement of Natural Persons (Mode 4) Geneva, Switzerland 22 – 23 September 2008 Perspectives of the European Services Industry Pascal Kerneis, Managing Director ESF (European Services Forum)

« The voice of the European Service Sectors for International trade Negotiations in Services » WHO ESF DOES REPRESENT? • 32 European services companies, most of them major multinational companies (represented at CEO or Chairman level in the European Services Leaders Group – ESLG) • 35 European trade federations of various services sectors (e. g. banking, insurance, telecommunications, express, architects, engineers, accountants, shipping, tourism, etc. )

« The voice of the European Service Industries for International Trade Negotiations in Services» ESF covers most services sectors, including: • Insurance • Banking • Business services: IT & Computer; consulting, advertising, after-sales services • Professional services: legal services, accountants, architects, engineers • Construction services • Distribution services • Publishing services (incl. Music) • Postal & Express Delivery services • Audio-visual services • Energy related services • Environmental services • Telecommunication services • Tourism • Air Transport • Maritime Transport But no members in Education or Health services For more information, see www. esf. be

« The voice of the European Service Industries for International Trade Negotiations in Services» ESF MEMBERS INCLUDE: • • • BARCLAYS BANK BT (British Telecom) CLIFFORD CHANCE COMMERZBANK DEUTSCHE BANK DHL FRANCE TELECOM GOLDMAN SACHS IBM EUROPE • • LLOYD’S ROYAL AHOLD NV SIEMENS AG STANDARD CHARTERED BANK TELEFONICA TNT TUI VEOLIA ENVIRONMENT For more information, see www. esf. be

« The voice of the European Service Sectors for International trade Negotiations in Services » • • • EU Basic Background The labour markets of many EU member States face the prospect of a shrinking and ageing workforce. EUROSTAT figures indicate that Europe’s native-born workforce will fall by 48 million by 2050 out of a total today of +/- 200 mio in EU 27, i. e. +/- 24%). In many countries, companies already find it difficult or impossible to fill vacancies due to labour and skills shortages. Facilitating legal migration can help boost the size of the labour force and enable companies to fill current job vacancies, in particular for highly qualified workers.

« The voice of the European Service Sectors for International trade Negotiations in Services » Temporary movement of workers is already taking place in the EU in many services sectors; • Difficult to gather reliable statistics; – – – Lack of data (only 14 Member States have “solid data”) Mix between Manufacturing and services sectors; Mix with single and multiple entries Mix with temporary and permanent jobs by Non EU nationals, Mix between high skills and low/all skills Mix between Intra Corporate Transferees (ICT) and Contract Services Suppliers (CSS) • Estimates: inflow of Third-country High Skills workers was 74 300 in 2003 in EU 25 • More accurate and detailed data: in 14 MS, 34 219 work permits were issued for High Skills Workers in 2005.

« The voice of the European Service Sectors for International trade Negotiations in Services » Some EU Member States are already applying or putting into place immigration policy favouring entry of high skilled workers ( « immigration choisie » ): 1)United Kingdom (already into place), 2) Germany, 3) France, 4) Sweden, 5) Denmark, …

« The voice of the European Service Sectors for International trade Negotiations in Services » EU Internal Legislative Proposals To improve temporary entry of third country nationals into the EU ESF and BUSINESSEUROPE welcomes the European Commission’s two legislative proposals dated 23 October 2007 (still in the pipeline – Final text expected in 2009 – implementation in 2011, but not to UK, Ireland DK): 1. A directive on the admission of highly qualified immigrant workers (the “blue card” proposal), 2. A directive on a single application procedure for a single work/residence permit and a common set of rights. Good to improve legal migration, But potential difficulty with minimum salary requirement (3 x existing minimum wage !)

« The voice of the European Service Sectors for International trade Negotiations in Services » • Proposals aiming at facilitating cross-border mobility of third -country nationals already legally residing and working in a Member State and holding a blue card (valid for 2 years, renewable) is of value to European employers. • Quick and simple admission procedures such as the fast-track procedure should facilitate recruitment for highly qualified employment (response after 30 days for HQE; for Single Application procedure (SAP): “One –stop-shop”, 90 days deadline, single act for residence and work permit, etc. • Common criteria for admission proposed in the directive, such as a work contract, ability to prove professional qualifications, travel document, evidence for sickness insurance and a minimum salary level (? ), might increase the transparency and reduce the complexity of admission procedures. • Rights for migrants: working condition, pay, education, social security, family reunification, etc.

« The voice of the European Service Sectors for International trade Negotiations in Services » EXTERNAL PROCESS • ESF is advocating for better WTO Mode 4 commitments since its inception in early 1999, before the launch of the DDA. ESF also favours Mode 4 in regional and bilateral trade agreements (FTA) • The European services industry is very interested in Mode 4, both ways, i. e. : – both as bringing its own staff abroad, either to their subsidiaries (ICT) and to their clients (CSS), as well as – bringing competent natural persons into Europe, either within the company (ICT) or to their clients (CSS). • ESF pleaded for a good EU offer on mode 4, and believes that the negotiators have delivered a rather good offer, but is very disappointed by the lack of response from trading partners for that specific mode of supply. Mode 4 is not only an offensive issue for developing countries, but also for developed countries

« The voice of the European Service Sectors for International trade Negotiations in Services » EU current WTO Offer on Mode 4 Preliminary provisions and conditions: 1. EC Directives on Mutual Recognition of Diplomas and of Qualifications do not apply to national of third countries = hence the importance of MRAs 2. All EC and EU Member States’ laws and regulations regarding entry & stay (i. e. visas), work (i. e. work permits) and social security measures (minimum wages, collective agreements, etc. ) shall continue to apply.

« The voice of the European Service Sectors for International trade Negotiations in Services » Categories of Natural Persons Covered under Mode 4: 1. Intra-Corporate Transfers (ICT) 1. Managers 2. Specialists 3. Graduate Trainees 2. Business Visitors (BV) 3. Contract Service Suppliers (CSS) Employees of Juridical Persons 4. Independent Professionals (IP)

« The voice of the European Service Sectors for International trade Negotiations in Services » Conditions For ITC in the EU: • The natural person must work within the juridical person for at least 1 Year • The natural person is transferred temporarily in the context of the provision of a service through a commercial presence in the territory • No Economic Needs Tests • No limit, no quota • Entry and Stay limited to a max of 3 Years for Managers and Specialist (LV: 5 Y; EE: 3 + 2; LT: Managers can be extended) and 1 Year for Trainees

« The voice of the European Service Sectors for International trade Negotiations in Services » Conditions for Business Visitors (BV): 1. Services Sellers: a. Person not residing in an EU Member State b. Person representing a service supplier c. Seeking temporary entry for the purpose of negotiating the sale of a service d. Not engaged in making direct sales e. Not receiving remuneration 2. Establishment of Commercial Presence (also some conditions depending of the EU countries) 3. No Economic Needs Test, No limit, No Quota 4. Period of up to 90 days in any 12 months

« The voice of the European Service Sectors for International trade Negotiations in Services » Conditions for the Contract Service Suppliers (CSS) (1) 1. The person is employed by a company (juridical person) that has no commercial presence in the EU 2. The juridical person has obtained a service contract for a period of max. 12 months from a final consumer (juridical person? ) 3. The person should work for the company for at least one year before the contract 4. The person must posses 1. a university degree or technical qualification required, 2. the professional qualification when required 3. At least 3 years of professional experience in the sector

« The voice of the European Service Industries for International Trade Negotiations in Services» Conditions for the Contract Service Suppliers (CSS) (2) 5. The service contract must be obtained in the following sectors: 1. Legal services 12. Related and technical consulting services 2. Accounting and bookkeeping 3. Taxation advisory services 13. Maintenance & repair of equipment in after sales of after-lease services contracts 4. Architectural services, urban planning 5. Engineering services, integrated engineering services 14. Translation services 15. Construction services 16. Site investigation work 6. Computer and related services 17. Higher education services 7. Research and development services 18. Environmental services 8. Advertising 19. Travel agencies & tour operator services 9. Management consulting services 20. Entertainment services 10. Services related to management services 21. Services related to the sale of equipment or to the assignment of a patent 11. Technical testing and analysis services 6. 7. Commitments are subject to the application of a Numerical Ceiling (i. e. a minimum quota, but without fix cap) to be determined For 12 new EU Member States: Transition period: 01/01/2011

« The voice of the European Service Sectors for International trade Negotiations in Services » Conditions for the Independent Professionals (IP) (1) 1. The person is self-employed in a non EU country 2. The person has obtained a service contract (but not through an agency) for a period of max. 12 months from a final consumer (juridical person? ) 3. The person must posses 1. a university degree or technical qualification required, 2. the professional qualification when required 3. At least 6 years of professional experience in the sector 4. The commitment relates only to the activity related to the contract (i. e. not right to stay longer) 5. Temporary Entry and Stay for max of 6 months in any 12 months period, or for the duration of the contract, whatever is less.

« The voice of the European Service Industries for International Trade Negotiations in Services» Conditions for the Independent Professionals (2) 5. The service contract must be obtained in the following sectors: 1. Legal services 2. Architectural services, urban planning & landscape architecture 3. Engineering services, integrated engineering services 4. Computer and related services 5. Management consulting services & Services related to management services 6. Translation services 6. Commitments are subject to the application of a Numerical Ceiling (i. e. a quota) to be determined 7. For 12 new EU Member States: Transition period: 01/01/2011

« The voice of the European Service Sectors for International trade Negotiations in Services » Conclusion: • The European Services industry is very keen in quick action in all aspects of mobility of foreign workers; • Progress on movement of natural persons are taking place at all levels in the EU; • At the Signalling Conference on Services on 26 July 2008 in Geneva, the EC has signalled its willingness to respond positively to Developing countries requests in Mode 4; • But the EC also insisted that its offer could only be tabled provided that WTO trading partners will somewhere reciprocate on that mode…

« The voice of the European Service Industries for International Trade Negotiations in Services» Thank You for your attention ! Pascal KERNEIS Managing Director European Services Forum – ESF 168, Avenue de Cortenbergh B – 1000 – BRUSSELS Tel: + 32 2 230 75 14 - Fax: + 32 2 320 61 68 Email: esf@esf. be Website: www. esf. be