Forming and Running

January 1997

Forming and running

a national

Coalition of Service Industries

An Action Checklist

including ideas on issues to tackle

Julian Arkell

(updated email address)

International Trade and Services Policy

Box 41, Mussupta 2, 07712 San Clemente, Menorca, Spain I T S P

Tel/fax: +34 9 7135 0845 e-mail: Insights on Issues

csichkl2 01 / January 97

Contents

1. Getting started______4

1.1. Survival______4

1.2. First steps______4

1.3. Initial action plan: short-term______4

1.4. Selling the benefits of membership______5

1.5. Agreeing a cause and setting aims______5

1.6. The governing Council and its Executive Board______6

1.6.1. Council______6

1.6.2. Executive Board______6

1.7. Launching the CSI______7

2. Membership, funding, and official support______7

2.1. Membership______7

2.2. Relationship with other trade associations, national, regional, international______8

2.3. Funding______8

2.4. Government support and incentives______8

2.4.1. Initial support______8

2.4.2. Continuing support______8

3. Activities______9

3.1. Committees______9

3.1.1. Standing Committees:______9

3.1.2. Temporary Working Parties______10

3.2. Newsletter for members______10

4. Interlocutor with government______11

4.1. Problems for governments______11

4.2. Locus with ministries______11

4.3. Official Services Advisory Committees______12

4.4. Services negotiations at the WTO______12

5. Links between CSIs______12

5.1. Annual meetings:______12

5.2. A global CSI organisation______13

6. The Internet and World Wide Web______13

6.1. WWW addresses______13

6.2. The Service Research Network______14

6.3. Data bases on measures affecting trade in services______14

6.3.1. The MAST Database of UNCTAD______14

6.3.2. The Market Access Database of the European Commission______14

7. Services statistics______14

8. Annex 1: notes on how existing CSIs were formed______15

8.1. North America______15

8.1.1. USA______15

8.1.2. Canada______15

8.1.3. Mexico______15

8.2. European Union, and other European Countries.______15

8.2.1. Ireland______15

8.2.2. Sweden______16

8.2.3. United Kingdom______16

8.2.4. Other EU Member States______17

8.2.5. Non-EU Countries______17

8.2.6. EU Groups______17

8.3. Argentina______18

8.4. Australia______18

8.5. Hong Kong______18

8.6. Japan______19

8.7. New Zealand______19

9. Annex 2: contents of a typical CSI brochure______20

10. Annex 3: outline of current GATS negotiating agenda______22

10.1. Implementing Market Access______22

10.2. Extending the GATS Framework______22

10.3. Sectoral Negotiations______22

10.4. Other matters for negotiations______23

11. Annex 4: ideas on a pro-active lobbying stance______24

“The private sector has been a major force in drawing the attention of governments to the importance of the benefits that could accrue from the world-wide liberalisation of trade in services.

It is hard to imagine any international negotiations that are more information intensive than the services negotiations.

The private sector have a crucial role to play: it is you who have the information and expertise to ensure that your governments negotiate in your national interests with a full knowledge of your objectives and concerns.

The international business community can play a very important role .. to ensure that there is a full appreciation of the benefits of the progressive liberalisation of trade in services in the business community .. and to engage your counterparts in the developing world to the maximum extent possible.”

Arthur Dunkel, GATT Director-General

July 1988 - speaking at the CSI meeting in Geneva

1. Getting started

1.1. Survival

Long-term survival of a CSI depends on having a clear major cause to pursue that will attract a core of services firms executives dedicated to its success. Governments do respond to well judged lobbying.

At the outset these few stalwarts, most probably from the largest firms, some of whom should be nationally known, must be willing to incubate the coalition for its first few years until it is independently viable. This will need their personal time, and that of a few senior staff, and they will have to provide a major part of its financial support. Since the majority of services firms are SMEs this represents a major hurdle, the more so in developing countries where there are fewer majors, and many of them may be foreign controlled.

Some governments may be willing to provide limited and short-term support to kick-start the process, or at least specific contracts, or office space and administrative services.

The agenda must be set by private firms, and will evolve as economic conditions change. CSIs typically aim as a minimum to improve the visibility of services and lobby, amongst other activities.

1.2. First steps

Initial group of CEOs to provide the drive [say 3]
Shadow Council and Executive Board (including President, Vice-President, Secretary and Treasurer)
Invitation to Ministries to send officials as observer members of Council
Choice of Director General (full or part time, level of pay and benefits)

1.3. Initial action plan: short-term

Action plan for the first [three] years, and programme of work, with budget for initial funding (including travel and subsistence to visit official organisations, and for representation at conferences and key meetings)
Decision on membership scope (? foreign owned firms or their associations), financial dues (see section 2), and non-profit making status
Location of secretariat (including size and nature of office, its equipment and back-up staff, if any) and whether it is provided by government, a chamber of commerce, an exporters’ association, or other business council
Develop a prospectus
Defining and developing initial scope of issues to be dealt with, needing sherpa input from knowledgeable practitioners, probably from big firms
Need for part-time consultancy support for the Secretariat - a top grade person may be needed to do the core drafting and co-ordinate the members’ input for important position papers. A rapporteur has to collect information, analyse it, synthesise a position, and present it for discussion and adoption.

1.4. Selling the benefits of membership

It is difficult to be specific about the benefits to be derived from supporting a lobbying group, as the causes are long-term ones, and will not be perceived by busy executives operating in highly competitive markets as directly assisting their own operating plans. Members will benefit in different ways in accordance with their situations, and much will depend on personal input and whether they shape the common activities. The following list includes some ideas on benefits:

a respected and powerful voice, influencing government policy
a forum selected by government for consultation
a focal point for multidisciplinary initiatives
participation in active state-of-the-art committees and groups
access to information and topical briefings, with insights on major issues
pooling of market intelligence resources
improved access to growth and export financing
access to expertise on services statistics
introductions to key markets through high level missions received by Ministers and business leaders abroad
priority in meeting inward missions of foreign politicians, officials and potential business partners
promoting a quality image of services firms to provide a sense of identity and worth
publicity for pro-bono activities from a respected newsletter
networking with other members for referrals - SMEs can gain the attention of large firms
obtaining a reduction of inter-state / provincial barriers
preferential access to conferences and training

1.5. Agreeing a cause and setting aims

The basic cause may be simple to express (such as to make the City of X a regional services and financial centre) but it will need an applied effort by the group over a long period, with many sub-issues to manage on the way.

In general CSIs can represent and promote common business interests, and deserve support for the common good. They can reinforce the work of individual trade and professional associations should the need arise, and by doing so some CSI umbrella organisations have become influential.

One key to success is to take a proactive stance founded on a clear and forward looking assessment of aims, strategies and priorities concerning issues likely to arise in upcoming legislation nationally and internationally, and getting to know the institutions responsible and the key people during the process. (see Annex 4)

The CSI should maintain up-to-date information on relevant institutions that take decisions, on their constitutions, procedures and administrative processes, and their programmes including the order in which issues will be dealt with and which officials are responsible for what, and attempt to understand their priorities and their jargon.

Credibility with government and the public rests on the representativity of the organisation, sound homework on the issues, and clear unemotional exposition.

CSIs broadly aim to educate, encourage and advertise. The following is a list of possible aims. Few, if any, will desire, or can afford, to pursue them all at once.

Promote awareness of services and their central role in the economy, especially amongst Ministers, officials, opinion formers, as well as the public
Energise an all-party parliamentary group, and provide elected members of legislative assemblies with briefings
Promote liberalisation of international trade in services
Assess the climate for international trade in services
Track the activities of WTO/GATS, UNCTAD, OECD, and other trade bodies
Co-ordinate views and positions across service sectors (including trade associations, and professional institutes), and with cross-sector groups (such as employers federations, and chambers of commerce)
Speak with one voice on agreed cross-sectoral issues (for instance on legislative, regulatory, tax and statistical matters)
Support annual governmental awards for export achievement by services firms, and other awards for quality management and excellence
Promote high standards and contribute towards the development of international standards
Publish discussion and position papers on key issues
Publish newsletters
Publish summaries of services statistics
Undertake and support research studies in services sectors
Monitor the research of official, academic and institutes

1.6. The governing Council and its Executive Board

1.6.1. Council

Size and membership, election of chairman
Seats for government departments
Honorary Treasurer
Honorary Auditor
Honorary Legal Adviser
Annual meetings of membership

1.6.2. Executive Board

Size
Election of Chairman
Rotation of members
Seat for Director General
Need for a Finance and General Purposes sub-committee

1.7. Launching the CSI

Production of a brochure (see Annex 2)
Public announcement of name, aims, officers and nature of government support
Target list of member organisations and key people to approach
Conference to launch - Trade Minister to give keynote speech
Gain interest of business media to obtain publicity - PR firm to draft pieces

2. Membership, funding, and official support

If membership is to be sought from both trade associations and firms, there may be a danger that firms will not wish to contribute because their representative organisations are already doing so. Trade associations do not usually favour making contributions to other representative groupings which are at a further remove from their member firms. This problem can afflict confederations of trade associations, whether at a national, or a regional level.

If the membership only to comprise firms, there may either be a few large firms contributing significant amounts, which will want to move ahead fast together, and not wish to provide a free ride to SMEs, putting into question the representativeness of the CSI, or contributions are set at a lower level to attract a wider range of firms. The latter case may fail to gain the support of the majors, and the income may be insufficient to pay for good officers and to project a strong image and presence at key events.

2.1. Membership

Heterogeneity of the services sector - difficult to attract diverse interests
Representativeness - broad or narrow coverage of sectors
Sector trade associations - a confederation
Services firms: the majors vs. SMEs
The liberal (regulated) professions
Associations of established foreign affiliates (eg banks, insurance firms, AmCham, bilateral chambers of commerce)
Academia and research institutes (to gain access to the expanding services literature)
Some CSIs may have to decide on whether state monopoly entities should become members or not, since CSIs are usually private sector bodies.

2.2. Relationship with other trade associations, national, regional, international

In most countries there is little or no contact between sectoral bodies active in very disparate fields, and the CSI can be a forum where representatives from one sector can learn how another sector is approaching a common situation. Relationships with the following may have to be considered:

Chamber of Commerce - national committee
Employers’ Federations: national and regional [UNICE in Brussels]
Associations and Institutes of the liberal professions
International links

- Councils for International Business

- Business and Industry Advisory Council (BIAC) at OECD

- ICC in Paris

Consumer groups
Trade Unions

2.3. Funding

Size of annual contributions from:

- trade associations

- firms

Sliding scale according to size

2.4. Government support and incentives

2.4.1. Initial support

Pump priming cash contributions for the first few years, usually to be matched by private sector

2.4.2. Continuing support

Non-cash support such as the:

use of rooms for meetings
staff to act as secretaries to certain committees - agendas, minutes, copying and distribution of documents
focus on agreed markets for information gathering by commercial staff in embassies
include services sectors as part of SME assistance programmes
regular official presence at members’ meetings to give briefings

Export promotion funds for missions abroad

3. Activities

3.1. Committees

The input of keen committee members taking time from their firms’ affairs is a crucial driving force and essential to the success of a CSI. They can contribute their knowledge of business issues, that usually the bureaucrats from trade associations cannot provide.

3.1.1. Standing Committees:

3.1.1.1. Subjects:

trade policy
liaison with Ministry of Trade and Industry
assessment of issues and formation of views and responses to government queries
listing priority barriers and obstacles to liberalise (providing schedules for government)
liaison with services negotiators in Geneva Missions (assessing the degree of control by capitals, and room for discretionary manoeuvre by negotiators)
pressing for compliance with obligations undertaken in the GATS
tax
government regulations affecting exports and imports of services, and other regulatory issues
export credit guarantees
services statistics
trade
investment
foreign affiliates
productivity
assisting with the production of estimates in sub sectors not regularly surveyed
suggesting improvements in definitions / classifications
studying international statistics and comparisons, and encouraging their improvement (eg by urging the WTO to become more competent in this field)
monitoring the work of the UN Statistical Office, IMF, WTO, OECD, UNCTAD, Eurostat, and Voorburg Group of statisticians
domestic promotion
media and publicity (ie briefing on services trends for home and foreign media - papers, journals, radio, TV
quarterly news releases on export earnings and investments in services
public relations
parliamentary liaison
publications (analyses, newsletters, statistics card, guides, results of commissioned studies)
evidence to government enquiries and committees
regular contact with the offices of the Prime Minister, and of the Ministers of Finance, Foreign Affairs, and Trade and Industry
liaison work
briefing groups of foreign visitors
sending representations to attend other groups and committees (eg employers’ federations, export awards, government advisory bodies, chambers of commerce), and international conferences
briefing ambassadors and commercial officers prior to their new postings
visiting OECD committees working on trade, investment and statistics
outward promotion
missions
conferences held abroad
seminars held abroad
handling enquiries from abroad
reception of inward missions of foreigners, including sponsoring visitors
educational visits to international institutions

3.1.1.2. Geographical areas

NAFTA
EU
Japan
Latin America
S E Asia
Africa

3.1.2. Temporary Working Parties

To agree on a position, project it, and then wind up.

views on what to include in national annual budgets
positions on specific trade negotiations
contribution to international setting of specific standards affecting services

3.2. Newsletter for members

For CSIs with firms as members, a newsletter can keep them in touch, especially helpful if some are not too active, and it can aid recruitment of new members. For CSIs that are confederations of trade and professional associations a newsletter will not reach their underlying member firms, and so is not likely to be necessary.

4. Interlocutor with government

Governments find it difficult to co-ordinate their policies affecting the services sectors that form such a large part of the economy, and are so disparate. There are usually about 15 or so Ministries that can be directly involved, and also independent regulatory authorities.

Over the years each Ministry will have developed close contacts with certain sector associations, and will not welcome advances from another Ministry to become involved on their turf. By the same token associations may not want their special relationship with a ‘sponsoring’ Ministry to be watered down.

Busy officials do not have time to meet the wide range of services organisations, and need views to be drawn together into manageable groupings at the minimum. This has implications for CSIs that attempt to co-ordinate their own views on cross-sectoral issues.

It was probably easier for government to co-ordinate their positions during past GATT negotiations, as usually one Ministry (eg Trade) was responsible for the negotiations and the subject matters were goods related. However, now that WTO coverage extends to services, intellectual property rights, investment, the environment, government procurement, and many other matters, such liaison groups can be bedevilled by battles over turf and competence. This is especially afflicting the European Commission’s DG I and its relationship with Member States, that is having an impact on all WTO Members, whether EU Member States or not.

Experienced private sector people who support their associations over a long period can provide valuable continuity on public policies and negotiating situations because officials continually rotate. Often also negotiating history is inadequately recorded, if at all, as the pressures and people change quickly, so that important connections and knowledge is easily lost.

4.1. Problems for governments

Number of Ministries involved (15 or so)
Regulators

- in Ministries

- independent

Business environments for some services are heavily regulated
Role of Central Bank in relationship to CSI
State monopolies in services

4.2. Locus with ministries

long relationships of some Ministries with certain private groups
turf fights over co-ordination between finance, trade, environment, legal, cultural, transport, etc
Inability to speak directly to all services trade associations

4.3. Official Services Advisory Committees