Vol. 563 No. 4
110 Mr. Rabbitte asked the Tánaiste and Minister for Enterprise, Trade and Employment the purpose and main features of the letter jointly written with Dutch Prime Minister, Jan Peter Balkenede, to the current President in Office of the EU, Prime Minister Simitis of Greece, regarding the removal of remaining barriers to trade in the services sector; if she expects this issue to be raised at the Spring EU summit; and if she will make a statement on the matter. [7076/03]
In preparation for the recent spring European Council meeting, the Taoiseach and his Dutch counterpart, Prime Minister Jan Peter Balkenende, submitted a joint letter to the current President in Office of the European Union, Prime Minister Konstantinos Simitis of Greece, seeking urgent progress in the removal of remaining barriers to trade in the services sector. Despite a decade of the internal market, barriers to trade in services remain. The joint letter requested the Commission to speed up the implementation of its "Internal Market Strategy for Services" and to submit proposals for legislation to eliminate the remaining barriers to trade in services before the end of 2003.
The "Internal Market Strategy for Services" was launched by the Commission in December 2000 and is aimed at making the internal market more effective by ensuring that service providers can operate as easily throughout the EU as they can in their own member state. The internal market has provided major advantages for the business sector and consumers. There has been improved competition leading to lower prices and increases in trade between our nations as the internal market celebrates its 10th anniversary.
However, the internal market for services is still often subject to complex rules at national or even regional level. These rules can act as a barrier to trade, especially for SMEs, curbing competition and increasing costs. Consequently, European business and consumers are still losing out by not benefiting from wider choice and better and cheaper services. It is easier for many exporters of services to do business outside the EU rather than within, despite a decade of the internal market and the introduction of the euro. The experience of Irish business supports this view.
My Department is aware of trading difficulties encountered by Irish service firms in the EU. Early in 2002, my Department convened a workshop for Irish service firms and their representative organisations. Representatives from the European Commission directorates general for the internal market and enterprise were invited to the workshop to "hear at first hand" the experiences of these companies.
The time has expired. The rest of the reply will be recorded in the Official Report.
I will keep my answers shorter for the next Question Time.
That is if we can get an answer. This is ridiculous.
Additional informationA better functioning internal market for services should help eliminate the obstacles faced by service providers and improve the opportunity for growth in this area. Removing these barriers to trade will increase competition, speed up economic growth and create jobs. The service sector accounts for 70% of GDP and employment in most member states. Consequently, the sector will be a key factor in economic growth in the future. EU enlargement also increases the need to step up the measures to eliminate barriers and to prevent the creation of new barriers.
Last Friday, at the spring European Council in Brussels, the Council agreed that a dynamic and well functioning internal market is essential for productivity and growth and even more so in an enlarged Union. In addition to calling on the Commission to complete work on its services strategy and to bring forward proposals by the end of 2003 the European Council also called on member states to step up their own efforts to dismantle existing barriers.
Does the Minister accept the completion of the internal market has been good for employment but not necessarily for workers' rights in all instances? The remaining barriers, according to the Taoiseach's website, included the requirement to vet the private security sector within the member state in which they operate. Is that not good in the current climate? Another barrier is the requirement to pay social security contributions in a member state where, for example, a construction worker is employed to ensure his social security benefits are fully realised and secure. In her push to ensure all services are freely traded within the Union, will the Minister give an assurance to the House that equal regard will be paid to the protection of workers' rights, particularly those involved in agency work, to ensure the rights afforded in one member state will not be diminished if they are employed in a different member state?
It is a requirement that one must pay social security contributions in one's home state and the state in which one is doing business, even if the work is temporary. The difficulty is that this has double cost implications. If it is to be a genuinely internal market, where labour and capital—
A double taxation agreement.
Apparently it is not covered and this is one of the issues of concern. I am probably reading from the note from which Deputy Howlin read.
I agree that workers' rights should not be adversely affected by virtue of the fact that some one wants to do service sector business in other member states, neither is this a justification for the remaining barriers. These barriers to trade are there to protect companies in certain member states. Sometimes, worthy considerations such as the environment are cited as barriers to trade even though they are not the real reasons. Ireland, together with other countries, wants to see the internal market in the services sector completed as quickly as possible.
In front-loading this as a priority for the summit on 21 March, will the Tánaiste assure the House that the workers' rights element will be equally front-loaded?
Is the Tánaiste concerned that the transfer pricing and corporation tax arrangements for services across the EU are under review within the EU and by other states, as indicated by her party's spokesperson over the weekend?
Deputy Howlin can take it that we will ensure that workers' rights are protected.
I am not familiar with the article to which Deputy Ryan refers. The IDA tells me that the treatment of repatriated profits in the US was the subject of intense and successful lobbying on Capitol Hill. There are clearly legislative elements to all of these matters. There is no dispute at all in relation to 96% to 98% of the trade between the US and the EU. There are disputes from time to time in relation to some 2% to 4%.
