The U.S. is preparing to open talks with Japan and the European Union to expand its International Services Agreement (ISA) as reported earlier by Reuters.
The expansion could mean a boost to the U.S. economy and job creation if agreement can be reached outside of the Doha round world trade talks that have been stalling since 2001.
U.S. Trade Representative Ron Kirk informed Congress that if the export of business services was to reach the same level as manufacturing exports then U.S. exports could increase by $800 billion annually.
Mr. Kirk’s letter to Congress further stated that 4,200 American jobs are supported for every $1 billion in business services exports.
The export of U.S. services currently accounts for 11% of GDP and the U.S. is the largest exporter of services in the world with a strong demand in Europe, Japan, China and Russia.
Resulting trade gains from the ISA expansion could amount to a 30% increase with the largest gains in Europe and U.S.
The U.S. already exports $1.7 trillion annually and is well positioned to increase its leading position in the world while rebalancing its trade balance sheets with its largest economic counterparts.
This would also change the global landscape over time as the U.S. would witness a net import of manufactured goods being balanced with a net export of business services within the same trade agreement.
It would also streamline our trade balance sheets while creating jobs within the attractive business services industry and it would slowly lessen the U.S. dependency on domestic consumer spending which currently accounts for 70% of total GDP.
Business services are vital to the recovery and stability of the U.S. economy and a possible expansion of International Services Agreements will certainly contribute to economic growth, stability and lower unemployment although the latter could be limited to specialized but higher paying jobs within the services industry.
Written by Nick Doms © 2013, all rights reserved.