Let us handle the introductions Laissez-nous faire les présentations Pemerintah Kanada – Divisi Perdagangan A Canadian Perspective on Services Trade and Related Opportunities for Indonesia Nadia Bourély Counsellor and Senior Trade Commissioner Embassy of Canada to Indonesia
Overview • Canada’s Services Sector • Canada’s Approach to Trade in Services Negotiations • Role of the Canadian Trade Commissioner Service • Opportunities for Indonesia in the Services Sector Pemerintah Kanada Divisi Perdagangan
Canada’s Services Sector • Key figures: – 70 % of Canada’s GDP – Employing 3 out of 4 working Canadians – Worth $95.2 billion a year – accounts for 16.8 percent of Canada’s total trade with great potential for growth. • Most of Canada’s services providers are SMEs • Contributes to investments, competition, and innovation • Services employ more well-educated knowledge-workers than any other sectors and have some of the best paid jobs in Canada (i.e. R&D, professional services). • Proven expertise in knowledge-intensive, advanced services in such areas as engineering, architecture, information management, environmental protection and monitoring, mining and energy development. Pemerintah Kanada Divisi Perdagangan
Services are driving Canada’s growth… All industries: Δ 21% Goods: Δ 10% 1.8 Services: Δ 27% 1.6 1.4 30% 1.2 $ Trillions 1 0.8 0.6 70% 0.4 0.2 0 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 Service-producing industries Goods-producing industries Note: Source: Statistics Canada, CANSIM, Table 379-0031, Gross domestic product (GDP) at basic prices
The Importance of Services • Services are playing a larger role in Canada’s economy as well as in international trade, especially through the progression of global value chains. • Services and imports have a key role as intermediate inputs. – E.g. Consulting engineering on a large infrastructure project; – After sales service for a software product • Importance of partnering with other innovative countries to access foreign knowledge, technologies and expertise in creating marketable products. Pemerintah Kanada Divisi Perdagangan
Trade in Services Negotiations there to negotiate? • Examples of services regulations that Services trade barriers tend to be arise in services negotiations domestic regulations rather than border measures • Limitations on the right to invest or establish a • Many are within provincial jurisdiction business e.g. FDI restrictions; Joint Venture (including self-regulating professions) requirements; citizenship or residency requirements • Most were designed for non-trade • Limitations on number of services providers public policy goals allowed; number of natural persons employed • Lack of transparency on rules/regulations • Some are designed with the purpose of discriminating • Discriminatory licensing requirements • • Border barriers (i.e. labour market tests The type and impact of barriers differs from sector to sector
Canada’s CBTS Model • Greater and more predictable market access – new sectoral access, beyond existing GATS obligations, in areas of interest, e.g. professional services (e.g. commercial education and training, research and development), environmental services and business services – level playing field for Canadian service suppliers against key competitors • Increased transparency and predictability of domestic regulatory regime – “negative list” approach for listing reservations – ‘’standstill’’ mechanism ensures that neither Party will impose future measures more restrictive than those in place when FTA came into force – ’’ratchet’’ mechanism binds future autonomous liberalization • MFN clause ensures that any additional benefits granted by a partner to its future FTA partners will also be extended to Canada. • Non-binding mutual recognition agreement framework • Policy Space/Exclusions for policies based on priorities
Canada’s CBTS Model Modalities for listing commitments Positive list: • Parties “opt in” to commitments • Does not apply to uncommitted sectors • Applies to sectors and not specific measures • No ratchet or standstill unless negotiated Negative list: • Applies to measures not sectors (i.e., significantly broader) • Parties “opt out” of commitments • Applies to all sectors not specifically reserved against in Annex II • Ratchet and Standstill mechanisms • Establishes a level playing field in perpetuity for services trade
Canada’s Objectives in Trade in Services Negotiations • For Canadian exporters and investors in services sectors – Obtain increased market access in key sectors – Ensure regulatory transparency and predictability • Maintain full policy flexibility in key services areas: – No request/offer in health; public education; other social services; culture • Address, as much as feasible, the services interests and concerns of our trading partners Pemerintah Kanada Divisi Perdagangan
Canada’s Trade Commissioner Service The TCS promotes Canada ’ s economic interests in the global marketplace. The TCS facilitates: • Foreign-market access • Technology transfer • Trade leads • Licensing agreements • Exports • Joint-venture development • Business contacts • Investment in Canada • Events • R&D partnerships Pemerintah Kanada Divisi Perdagangan
Canada’s TCS Team in Jakarta • TCS supports Canadian companies abroad – Key Services include: Preparation, Market Intelligence, Key Contacts, and Problem Solving • TCS assists Canadian companies of all sizes, though primarily we work with SMEs. • Priority Sectors in Indonesia include – Renewable Energy, Aerospace and Defence, Education, Extractives Sector, Water and Wastewater, Building Products, ICT, Infrastructure, Agriculture • Canada has strengths in both products and services segments in these sectors Pemerintah Kanada Divisi Perdagangan
Examples of TCS Work Education: • Canada’s technical training strengths that match industry growth include: engineering technology, construction trades (eg electricians, construction management, concrete), and renewable energy. • TCS supports Canadian technical and trades training institutions looking to partner with local partners. Construction/Building Products: • Canada has expertise in engineering and design of eco-friendly, sustainable building design practices, products and systems. Examples include energy efficient lighting systems; design for weather extremes; renewable energy generation. • TCS works with Indonesian firms seeking this skill set to match with Canadian engineering/design firms. Pemerintah Kanada Divisi Perdagangan
Bilateral Trade in Services…….. • Canada-Indonesia bilateral trade in services: – valued at Rp. 4010 Million (CAD 411 Million 2015) – Bilateral trade in goods CAD 3.5 Billion in 2015) • Top 3 sectors for bilateral services trade: – Travel Services – Commercial Services – Transportation and Government Services Pemerintah Kanada Divisi Perdagangan
………….A Growing Trend in Millions of CAD Country Category 2011 2012 2013 2014 2015 From 2011 to 2015, growth Services Indonesia 204 247 244 236 251 exports, total in both services exports Indonesia Travel 97 102 121 128 n.a. Indonesia Commercial and imports . 71 106 86 71 n.a. services Transportation Indonesia and 36 39 37 37 n.a. government services Indonesia Services 108 122 112 152 160 imports, total Indonesia Travel 34 35 35 40 n.a. Indonesia Commercial 10 23 12 45 n.a. services Transportation Indonesia and 64 64 65 67 n.a. government services Pemerintah Kanada Divisi Perdagangan
Opportunities for Indonesia • Areas of complementarity include extractives, infrastructure, clean energy, maritime security and education • Trade in Services is mutually beneficial • Examples of Canadian companies providing services in Indonesia: – Insurance: Manulife, Sun Life – Education: LaSalle College – Engineering: Hatfield Pemerintah Kanada Divisi Perdagangan
Looking Ahead • Strong services sector key to develop value-added domestic industry • Indonesia’s ambitious trade agenda and ongoing economic reforms presents great opportunities – Mobilize political will and inter-departmental coordination – Consultations with stakeholders: private sector, civil society – FTAs as a tool to trigger domestic institutional and regulatory reforms and develop internationally competitive businesses and attract foreign investment • Participation in global commerce deepens ties, ensures stability, raises standards of living and contributes to sustainable economic growth Pemerintah Kanada Divisi Perdagangan
Embassy of Canada (Kedutaan Besar Kanada) Trade Commissioner Service The Canadian Trade Commissioner Service Le Service des délégués commerciaux du Canada (Divisi Perdagangan) Pemerintah Kanada - Divisi Perdagangan WTC I, 6 th Floor Jl. Jend. Sudirman Kav 29-31 Jakarta Email: jkrta-td@international.gc.ca www.indonesia.gc.ca www.tradecommissioner.gc.ca
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