He is now retired, but on February 24 Peter Allgeier was still the President of the Coalition of Services Industry. And on the morning of the 24th he was the first of two presenters at GBD's Breakfast of Champions II.  After a light-hearted introduction from USTR General Council, Tim Reif - including the presentation of a Wheaties box with Mr. Alleier's picture - the services representative and former U.S. Ambassador to the WTO, addressed the topic, "Trade: A Services Perspective."

The two revolutions he spoke of - the services revolution and the digital revolution - are both global, and the latter especially is relatively new.  Whatever measure one uses for an economy, "services are by far the largest part of economies," Mr. Allgeier said. Highlighting the importance of services to the U.S. economy, he noted that the United State is "the most competitive supplier of services in the world," and last year had services exports of more than $700 billion.

As for the digital revolution, the examples he cited to show how new it is also underscored America's leadership in the digital arena.  "Amazon.com was founded only in 1994," he said, "and Facebook was ten years after that."  But, of course, the digital revolution is not just about the big companies, the household names, it can be about anybody.  Mr. Allgeier explained:

Never a rose without a thorn, they say, and the thorn in these revolutions is the fact that trade policy - the rules of trade - have not kept pace with the changing economic realities.  Ideally, the necessary adjustments would have been made in the WTO rulebook for services, the General Agreement on Trade in Services, or GATS.  That deal was concluded in 1994 as part of the Uruguay Round, and the long running gridlock in WTO negotiations since then has kept the world from moving to a multilateral upgrade to that now outdated system.  Mr. Allgeier referred frequently to the goal of such an update as GATS 2.0.

It clearly hasn't happened yet, but other things have.  The Trans-Pacific Partnership Agreement, TPP, is one of those, and Mr. Allgeier spoke at length about some of the relevant elements.  Here we shall focus on the twin issues of digital transmissions and e-commerce in TPP.  Mr. Allgeier described the TPP language in these areas as a good first start.  He said, for example, that "TPP is very good in its e-commerce chapter in saying TPP countries cannot impose localization requirements."  That is, a TPP country cannot require that the servers holding a company's data be held within that country's jurisdiction.

But there is a catch, an exception.  Countries can impose localization requirements on financial services providers, such as banks, insurance companies, and securities firms.  "There really is no good reason for that exception .... And [it] should not continue in future agreements," Mr. Allegier said.

We are not going to add, or react here, to Mr. Allgeier's thoughts on trade in services, other than to suggest that you listen to the recording for yourself.  Mr. Allgeier's presentation begins at the 12:59 mark.

We would, however, like to offer an observation and a bonus.   Peter Allgeier is a consummate professional, and his presentation on February 24 was as straightforward a discussion of services and trade policy as one could have hoped for.  He is also, however, someone with a lively sense of fun and a delightful sense of humor.  They both came out in the Q&A.   Matthew Schewel of Inside U.S. Trade described the question he was about to ask as difficult, which led Mr. Allgeier to a prelude of his own.  It is today's BONUS QUOTE:

Peter Allgeier reacting to the idea of difficult question and saying:

Still, if memory serves, Mr. Allgeier had no trouble in responding to the question from Inside U.S. Trade.

Breakfast of Champions II is a link to the audio recording of this GBD event on February 24.  As noted above, Mr. Allgeier's presentation begins at the 12:59 mark.