COMMITTEE on WAYS and MEANS

Congressman Kevin Brady (R-TX), Chairman, Subcommittee on Trade of the Committee on Ways and Means, today announced that the Subcommittee will hold a hearing on the benefits of expanding U.S. services trade through an international services agreement.  The hearing will take place on Thursday, September 20, 2012, in 1100 Longworth House Office Building, beginning at 2:00 P.M. 

In view of the limited time available to hear witnesses, oral testimony at this hearing will be from invited witnesses only.  However, any individual or organization not scheduled for an oral appearance may submit a written statement for consideration by the Committee and for inclusion in the printed record of the hearing.  A list of invited witnesses will follow.

BACKGROUND:

On July 5, 2012, the United States and a key group of other World Trade Organization (WTO) members announced plans to intensify ongoing discussions in Geneva on an international services agreement to define “the contours of an ambitious agreement on trade in services.”  Thus far, twenty economies – both developed and developing – are participating, representing a strong majority of global services trade:  Australia, Canada, Chile, Colombia, Costa Rica, the European Union, Hong Kong, Israel, Japan, Korea, Mexico, New Zealand, Norway, Pakistan, Peru, Singapore, Switzerland, Taiwan, Turkey, and the United States.  In their July 5 statement, the participating economies noted that the initiative is meant ultimately to reinforce and strengthen the multilateral trading system.  Participants also stated that the agreement should be comprehensive in sectoral scope, contain new and enhanced rules that countries have developed since the WTO General Agreement on Trade in Services entered into force in 1995, increase market access commitments to be as close as possible to countries’ current practices, and produce new market access improvements.

An international services agreement could generate substantial benefits for the U.S. and global economies.  The services sector accounts for the largest share of most economies, and the United States exports more services than any other country – fourteen percent of global services exports.  According to a July 2012 report by the independent U.S. International Trade Commission (ITC), U.S. cross-border services exports totaled $518 billion in 2010, generating a $160 billion trade surplus – the world’s largest.  Services exports sold by U.S. firms invested abroad totaled $1.1 trillion in 2009.  Globally competitive U.S. services firms have very significant market shares in many services subsectors, including infrastructure services, movie and television production, engineering, financial services, computing and IT services, consulting, publishing, education, healthcare, retail, tourism, telecommunications, logistics and distribution, agricultural services, and professional services.

Services trade is a major source of well-paying U.S. jobs.  The services sector employs over 80 percent of Americans, according to the ITC.  One subset of services that is highly tradable – business services, such as industrial design, accounting, and legal services – account for approximately a quarter of U.S. private-sector jobs.  These services are also highly paid, very substantially exceeding average U.S. wages.

Services exports are growing, rising from approximately eight percent of U.S. exports in 2000 to over 12 percent in 2010.  U.S. services exports encounter substantial non-tariff barriers (NTBs) around the world, however, which keep our services trade from reaching its full potential.  Traditional barriers to services exports include sectoral prohibitions on foreign participation, foreign equity limitations, discriminatory regulatory requirements, lack of transparency, and nationality requirements for service providers.  In addition, U.S. services firms are encountering a new generation of 21^st-century NTBs, including restrictions on data flows, forced localization, and unfair competition from state-owned enterprises.  The degree of U.S. openness to services is far greater than the average around the world.  As a result, an international services agreement may create disproportionate opportunities for U.S. services exporters as the United States pushes countries to approach U.S. levels of openness.    

In announcing this hearing, Chairman Brady said, “Expanding services trade means creating good U.S. jobs.  I am enthusiastic about the work USTR is doing in Geneva to move toward launch of negotiations on an international services agreement.  A services agreement would reduce barriers abroad for U.S. services providers and produce major benefits and job growth here at home.  By ensuring that benefits are available only to those countries that commit themselves to the high standards of the agreement, we can encourage participation by a wide range of developed and developing countries.  I am also optimistic that a successful agreement will help reinforce the important role of the WTO.”

FOCUS OF THE HEARING:

The focus of the hearing is on the benefits of expanding U.S. services trade, including by negotiating an international services agreement.  The hearing will address the importance of services exports as a source of well-paying U.S. jobs and economic growth.  In addition, the hearing will examine the current state of ongoing discussions concerning an international services agreement and explore how best to support a successful initiative.

DETAILS FOR SUBMISSION OF WRITTEN COMMENTS:

Please Note: Any person(s) and/or organization(s) wishing to submit for the hearing record must follow the appropriate link on the hearing page of the Committee website and complete the informational forms.  From the Committee homepage, http://waysandmeans.house.gov, select “Hearings.”  Select the hearing for which you would like to submit, and click on the link entitled, “Click here to provide a submission for the record.”  Once you have followed the online instructions, submit all requested information. ATTACH your submission as a Word or WordPerfect document, in compliance with the formatting requirements listed below, by the close of business on Thursday, October 4, 2012.  Finally, please note that due to the change in House mail policy, the U.S. Capitol Police will refuse sealed-package deliveries to all House Office Buildings. For questions, or if you encounter technical problems, please call (202) 225-6649.

FORMATTING REQUIREMENTS :

The Committee relies on electronic submissions for printing the official hearing record.  As always, submissions will be included in the record according to the discretion of the Committee.  The Committee will not alter the content of your submission, but we reserve the right to format it according to our guidelines.  Any submission provided to the Committee by a witness, any supplementary materials submitted for the printed record, and any written comments in response to a request for written comments must conform to the guidelines listed below.  Any submission or supplementary item not in compliance with these guidelines will not be printed, but will be maintained in the Committee files for review and use by the Committee.

1. All submissions and supplementary materials must be provided in Word or WordPerfect format and MUST NOT exceed a total of 10 pages, including attachments. Witnesses and submitters are advised that the Committee relies on electronic submissions for printing the official hearing record.

2. Copies of whole documents submitted as exhibit material will not be accepted for printing. Instead, exhibit material should be referenced and quoted or paraphrased.  All exhibit material not meeting these specifications will be maintained in the Committee files for review and use by the Committee.

3. All submissions must include a list of all clients, persons and/or organizations on whose behalf the witness appears.  A supplemental sheet must accompany each submission listing the name, company, address, telephone, and fax numbers of each witness.

The Committee seeks to make its facilities accessible to persons with disabilities.  If you are in need of special accommodations, please call 202-225-1721 or 202-226-3411 TTD/TTY in advance of the event (four business days notice is requested).  Questions with regard to special accommodation needs in general (including availability of Committee materials in alternative formats) may be directed to the Committee as noted above.

Note: All Committee advisories and news releases are available at http://www.waysandmeans.house.gov/