2. Trade in Services

   1. Introduction

      1. The Directive on Services in the Internal Market (the Services Directive) was adopted in December 2006, and the EU member States were provided a three-year transitional period to transpose the Directive into national legislation. However, several member States missed the end-2009 deadline, and work to implement the Directive continued throughout 2010.³⁴ Although the vast majority of the member States have chosen to implement the general principles and obligations of the Directive through a single act, implementation of the general principles has been carried out through several acts in France and Germany. In addition, all member States have had to amend or abrogate existing legislation to ensure conformity with the provisions of the Directive.³⁵

      2. The Services Directive does not harmonize national legislation applicable to the services sector, but obliges member States to screen their authorization schemes to ensure that they are maintained only if non-discriminatory, justified by an overriding reason relating to public interest, and proportionate.³⁶ The Directive extends to all services except those specifically excluded from its scope, i.e: financial services; electronic communication services and networks; transport services, services of temporary work agencies; healthcare and pharmaceutical services; audiovisual and broadcasting services; gambling activities; certain social services; private security services; and services by notaries and bailiffs appointed by an official act of government. Key services sectors such as financial services, telecommunications, and transport were not included as these have been liberalized under other rules. The Commission has not drawn up concrete plans to cover the other excluded services. Services activities are in any event always subject to the EC Treaty provisions, notably the fundamental freedoms of establishment (Article 43) and free movement of services (Article 49). The Services Directive applies only to EU (EEA) citizens and legal entities established in the EU (EEA), and does not oblige member States to consider changes applicable to non-EU services suppliers.

      3. The global financial crisis had a significant impact on EU(27) trade in commercial services with the rest of the world. Overall, both imports and exports declined by approximately 16% in value between the third quarter of 2008 and the first half of 2009, and remained well below pre-crisis levels throughout 2009 and the first three months of 2010 (Tables IV.7 and IV.8). However, with a strong and sustained recovery taking place during the rest of 2010, the value of EU imports and exports of services was back at pre-crisis levels by the third quarter of 2010. Trade performance varied considerably across the services sectors, though. While the decline, and subsequent recovery, was particularly sharp for transportation, travel, and financial services, the impact on trade in other types of services appears to have been much more muted. Although the growth path was not linear, trade in communication services actually expanded significantly between the third quarter of 2008 and the third quarter of 2010, by more than 30% for exports, and just over 20% for imports.

Table IV.7

EU(27) exports of commercial services, 2008-10

(€ billion)

	2008 Q3	2008 Q4	2009 Q1	2009 Q2	2009 Q3	2009 Q4	2010 Q1	2010 Q2	2010 Q3
Commercial services	136.6	135.4	111.9	117.2	121.3	122.4	114.4	131.0	140.2
Transportation	36.2	34.0	26.7	26.8	27.3	27.3	27.7	32.5	34.1
Travel	24.4	16.2	12.8	17.6	22.6	15.2	13.6	18.9	25.1
Other commercial services	75.8	85.1	72.4	72.5	71.8	79.8	73.0	79.6	80.9
Communications services	3.0	3.3	3.1	3.0	3.4	3.5	3.5	4.0	4.0
Construction services	4.2	5.2	4.0	4.0	4.2	4.5	3.6	4.3	4.2
Insurance services	3.8	3.2	4.3	3.9	4.3	2.5	4.1	3.7	4.6
Financial services	11.7	12.8	9.9	9.8	9.9	11.4	10.5	11.7	11.3
Computer and information services	7.3	8.8	7.6	7.1	7.0	8.4	7.4	9.0	8.9
Royalties and license fees	6.6	8.1	7.2	6.5	6.5	6.9	7.4	6.7	7.2
Other business services	38.1	42.2	35.5	37.3	35.4	41.2	35.6	39.0	39.2
Personal. cultural and recreational services	1.1	1.5	0.8	1.0	1.2	1.5	1.0	1.3	1.5
Services not allocated	0.1	0.1	0.0	0.4	-0.4	0.1	0.1	0.1	0.1

Source: Eurostat. BOP statistics. Viewed at: http://epp.eurostat.ec.europa.eu/portal/page/portal/balance-of-payments/data/ database.

Table IV.8

EU(27) imports of commercial services, 2008-10

(€ billion)

	2008 Q3	2008 Q4	2009 Q1	2009 Q2	2009 Q3	2009 Q4	2010 Q1	2010 Q2	2010 Q3
Commercial services	117.9	113.4	98.7	99.7	106.2	103.6	101.9	110.7	119.2
Transportation	29.5	27.0	21.9	21.4	22.1	22.8	24.3	27.4	28.6
Travel	31.1	19.8	18.2	21.4	27.8	19.1	18.4	21.7	29.1
Other commercial services	54.0	64.1	54.8	54.4	53.5	58.0	55.8	58.4	58.5
Communications services	3.1	3.6	3.2	3.1	3.4	3.4	3.4	3.6	3.7
Construction services	2.0	2.5	2.0	2.3	2.1	2.3	1.9	2.2	2.5
Insurance services	1.6	2.3	2.1	1.9	1.8	1.8	2.1	2.1	2.3
Financial services	4.5	4.8	3.7	4.1	4.4	4.0	4.2	4.9	4.6
Computer and information services	2.7	3.7	3.3	3.0	3.0	3.4	3.6	3.2	3.5
Royalties and license fees	10.4	12.0	10.6	9.5	10.2	10.5	11.1	10.5	10.3
Other business services	28.0	33.7	28.4	29.2	27.2	31.1	27.8	30.4	30.1
Personal. cultural and recreational services	1.7	1.6	1.6	1.3	1.5	1.4	1.7	1.6	1.6
Services not allocated	3.2	2.4	3.7	2.4	2.8	3.7	3.5	3.2	3.0

Source: Eurostat. BOP statistics. Viewed at: http://epp.eurostat.ec.europa.eu/portal/page/portal/balance-of-payments/data database.