Skip to content

Brady Opening Statement: Hearing on the Benefits of Expanding U.S. Services Trade Through an International Services Agreement

September 20, 2012

I want to welcome everyone and extend a special welcome to Ambassador Michael Punke and our private sector witnesses.

Let me also recognize Bob Vastine, the longtime President of the Coalition of Service Industries, who stepped down yesterday, and Ambassador Peter Allgeier, CSI’s newly installed President.  These are two great leaders.  Bob has had a long and distinguished career in government and the private sector, and we have all benefitted greatly from his tremendous expertise and sound contributions.  As a co-chair of the Congressional Services Caucus, I join CSI and its members in expressing appreciation for Bob’s work and wishing him well, and in welcoming Peter, with whom I look forward to working (again) in his new role.

I would also like to take a moment to acknowledge the service of Viji Rangaswami, the Ways & Means Minority Chief Trade Counsel, who will be leaving the Committee after over a decade of service.  She has made important contributions in her work on free trade agreements, our preference programs, our trade remedy laws, Trade Adjustment Assistance, and China policy.  Viji, we will miss your considerable expertise, your spirit of compromise, and your good humor.  I know that my colleagues join me in wishing you the best of luck.

In this economy, creating U.S. jobs must be Job #1.  That’s why we’re here today to discuss U.S. services trade.  We have a major opportunity at hand.  By negotiating an international services agreement that lowers barriers to U.S. services exports, we can rev up a great engine of U.S. job creation.  

The services sector accounts for over three-quarters of U.S. jobs and economic growth.  These are not the stereotypical low-wage, low-skilled jobs that some would scornfully call McJobs.  Services jobs pay well.  For example, our business services sector – which includes engineering and design, computing and data processing, consulting and other services provided to businesses – pays nearly 20 percent more on average than jobs in manufacturing, averaging nearly $60,000 a year – higher than the national average.

With over half a trillion dollars in services exports last year, the United States is the world’s most successful services exporter.  In fact, we export more services than the two next largest services-exporting countries combined.  Because U.S. service providers are such strong global leaders across many services subsectors, the United States has long generated a large trade surplus in services, which helps offset our deficit in goods trade.  

Our global competitiveness isn’t automatic, however.  U.S. services providers must be able to maintain a global presence to sell our services around the world.  Their success depends on having the flexibility to move their data and know-how around the globe.  Yet U.S. services providers continue to face major trade barriers.  For example, countries impose equity caps, restrict data and capital flow, dictate the nationality of senior officials, and impose discriminatory licensing and regulatory requirements.  

But if we are able to lower services trade barriers around the world, our U.S. services providers are well positioned to compete and win – and will generate major new U.S. employment.  

Those employment gains will come not just in the services sector but throughout the U.S. economy.  That’s because services trade facilitates all economic activity.  EBay recently did an interesting study that found that its online auction services have allowed a vast number of small businesses in the United States to become exporters.  And the National Association of Manufacturers and the Farm Bureau have produced two papers – and without objection, I enter them into the record – laying out the many ways their members depend on U.S. services firms’ global operations to design, finance, market, transport, and service U.S. agricultural and manufacturing exports.  In short, we focus on services not instead of manufacturing and agriculture but to the benefit of manufacturing and agriculture.

As a result, I am very enthusiastic about the work that Ambassador Punke is doing in Geneva on services trade policy.  Thanks to his leadership, twenty WTO members accounting for three-quarters of global services trade agreed in July to intensify discussions this fall about an international services agreement.  

This is an opportunity to extend to a much broader set of countries the highest-standard services rules from our bilateral trade agreements.  By pursuing an ambitious agreement that results in real trade gains for participants, we can generate new momentum for trade liberalization and ultimately reinvigorate WTO negotiations.  To create incentives for broad membership, the benefits of the agreement should be available to all WTO members that are willing to commit to the agreement’s high standards.

An international services agreement holds great promise for U.S. workers and our economy, and I believe it would be met with bipartisan enthusiasm in Congress.