The Annual Global Services Summit recognizes the role of services in today’s global economy. The annual one-day event convenes senior trade officials, policy makers, and business leaders from around the world to discuss issues related to international trade in services. In honor of this summit, this post discusses the key role of services in today’s global economy.

The service sector has been described as “the grease” that links the different parts of the production processes. Service providers are not just your servers at restaurants and gas stations or even your lawyers and doctors. Service providers include highly-skilled high-wage earners or entrepreneurs such as engineers, researchers, designers, logistics providers, marketing and sales professionals, and of course information technology (IT) providers.

Advances in technology and transportation have essentially “shrunk” our world, making these skills more and more easily transferrable and tradable across borders. As a result, services play an increasingly important role in international trade.

International Trade in Services

Services are exported or imported across borders using these four delivery modes:

Cross-border trade: The web developer who is building websites or the engineer who constructs designs for clients around the world while seated at his/her computer.

Consumption abroad: Hotels are the most obvious examples; but so are the hospitals and schools in emerging markets that provide access to highly-skilled doctors or educators for patients and students from developed countries.

Commercial presence: The local affiliates of multinational and other corporations established in a given country to provide better access to locals.

Movement of natural persons:  The US-based trade attorney who is hired to conduct workshops in Nigeria and South Africa on how to effectively access the US market under AGOA.

Some Legal Do’s & Don’ts

Despite their unique characteristics, service providers nevertheless need to pay just as much attention to the legal rules of doing business internationally:

    • Don’t conduct business in the wrong country – sanctions against Russia (imposed in 2014 and ongoing) are just one example of countries to be approached with caution.
    • Don’t conduct business with the wrong persons – the U.S. list of Specially Designated Nationals and the EU list of persons subject to its financial sanctions should be checked when doing business with an unknown person or entity.
    • Don’t import or export the wrong services – use caution when dealing with software or  technology that the U.S., the EU , or other countries consider dual-use or controlled items.
    • Don’t pay bribes to get contract awards – anti-bribery laws also apply to trade in services.
    • Do protect your intellectual property – this is especially important because of the intangible nature of services.
    • Do find and join your local Coalition of Service Providers.
    • Do use contracts, even more so when entering into deals with new partners or clients on the other side of the globe.
    • Contact usDo get proper trade and legal advice when entering into contracts with your customers.
    • Contact us about leading a seminar or workshop for you on this topic.
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