Recent developments in relation to international trade and services

Aricle Authors: Anne McNaughton and Jo Feldman, co-chairs, International Trade and Business Committee

Introduction

In 2019 – 2020, professional services were Australia’s third largest export accounting for $6.1 billion.[1]  Services, and professional services in particular, are a key trade priority for Australia, representing a significant portion of Australian exports and an area of competitive advantage globally. However, progress on trade liberalisation has been difficult and uneven. 

Since the collapse of the Doha Round[2], of multilateral trade negotiations in 2006[3] the process of liberalising trade in services internationally has continued plurilaterally, primarily through the negotiation of bilateral and regional free trade agreements (FTAs). In 2013, Australia, together with the European Union (EU) and the United States of America (USA) led negotiations for a multilateral Trade in Services Agreement (TiSA) that would set new international standards in services liberalisation amongst 53 likeminded countries, representing the vast majority of global services trade. This proposed agreement built on the World Trade Organization (WTO) General Agreement on Trade in Services (GATS). However, conclusion was thwarted by changing US trade policy, and the last round of negotiations was held in 2016[4]. 

In the meantime, Australia and other countries have continued to focus their energy and attention on achieving services liberalisation through bilateral and regional FTAs.  Common to the chapters on trade in services, particularly professional services, in these FTAs, is an institutional structure the purpose of which is to facilitate transnational dialogue between, among others, professional bodies such as the Law Council of Australia.  This contribution will discuss this aspect of the new generation of trade agreements with reference to a selection of FTAs that have recently been concluded or entered into force, and speculate on those under negotiation.

Australia-United Kingdom Free Trade Agreement (A-UKFTA) (concluded)

At the end of 2021, Australia and the United Kingdom concluded negotiations on a A-UKFTA and, in both countries, the legislative process to give effect to this agreement is almost complete. It is expected that this FTA will enter into force in 2023. In many respects, this FTA is a bespoke agreement. Consistent with all other, more recent FTAs however, it contains provisions for the establishment and function of a committee (“the Professional Services Working Group”) to facilitate dialogue between representatives from both government and the legal profession, including the Law Council of Australia, on the subject of professional services and the recognition of professional qualifications.[5] 

Australia – India Economic Cooperation Trade Agreement (AIECTA) (concluded)

Australia and India have only recently concluded negotiations on this agreement[6]. It will now go through the respective domestic processes to enter into force. This agreement also contains provisions for the establishment of a committee to facilitate dialogue between representatives of the respective governments (the “Subcommittee on Trade in Services”).[7]  While the membership of this committee is primarily governmental, it may establish subsidiary bodies, ad hoc or otherwise; and under Article 8C.9 of Annex 8 of this FTA, a Professional Services Working Group is established[8].  Part of the work of this group is to ‘support relevant bodies of each Party in relation to the development of systems for recognition of professional qualifications, registration and occupational licensing,’ Although this agreement does not identify examples of such ‘relevant bodies’ the Law Council of Australia should clearly qualify. 

Regional Comprehensive Economic Partnership Agreement (RCEP) (entered into force)

The RCEP entered into force for Australia on 1 January 2022. It is a regional FTA that builds on Australia’s existing FTAs with fourteen other Indo-Pacific countries.[9] It covers a population of 2.3 billion people, has a GDP of US$26.3 trillion; and the value of trade with Australia in 2019 was $532.6 billion.[10] Professional services are addressed in a dedicated annex to the services chapter.[11] Under Article 2 of Annex 8C, each Party is exhorted to ‘encourage its relevant bodies to establish dialogues with the relevant bodies of another Party or Parties, with a view to recognising professional qualifications and facilitating licensing or registration procedures.’  Although the language is, understandably, more open-textured in this FTA, once again, it provides a formal structure for dialogue between ‘relevant bodies’, which would again presumably include the Law Council of Australia.

Australia – European Union Free Trade Agreement (A-EUFTA) (under negotiation)

The Australia – European Union Free Trade Agreement (A-EUFTA) is still under negotiation but it is reasonable to assume that this FTA will also contain provisions creating a framework in which professional bodies from both Parties will be encouraged to engage in dialogue considering questions such as the mutual recognition of professional qualifications. At this stage, useful references might include Chapter 11 on Mutual Recognition of Professional Qualifications in the Comprehensive Economic and Trade Agreement (CETA) between the EU and Canada,[12] and the FTA concluded between the EU and New Zealand in June 2022.

Conclusion

Consistent across these treaties is an internal, institutional structure, that can be – and should be – engaged domestically at both national and state levels. This is a hallmark of this new generation of trade agreements, treaties that provide a frame for ongoing dialogue not only at the level of government but also at the level of private actors such as the Law Council of Australia through its committees.  It offers the promise on ongoing active progress on practical issues affecting practitioners, with the goal of achieving tangible business outcomes from these trade agreements. The work programme of the International Trade and Business Committee will include a focus on this engagement.

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