International trade is the world’s growth engine, and today’s international trade agenda is an opportunity not to be missed by the accountancy profession. Indeed, it is a very active time for trade, as governments around the world are intensely examining new approaches to trade expansion to help stimulate an otherwise hesitant and uneven global economy. As a profession, the accountancy sector has a vested interest in helping to navigate where this discussion leads.
As a former Minister for Foreign Affairs and International Trade for Canada, who has had the fortune to be a part of many discussions dealing with economic growth and development, I can attest that for an economy to grow and compete, a country’s trade [in services] agenda that champions open and international markets is a vital component. The Global Recession—born as a financial services crisis—illustrated how inter-connected the global economy is, calling for an economic framework much more attuned to international coordination, and more aware of the extra-territorial impacts measures can and are having when administering rulemaking. Trade policy, and continuing trade liberalization, can play an impactful role in leading a path forward. Indeed, I am chairing a World Trade Organization dispute settlement panel on financial services, where I am reminded daily of the correlation between one’s economy and cross-border trade, and how to balance domestic and global interests.
Professional services—including accountancy—are subject to international rules on trade. Many of these rules that impact the profession, rooted in such accords like the General Agreement on Trade in Services (GATS), no longer reflect nor sufficiently can address the range of challenges facing the accountancy sector. This restricts the full potential of a profession where there is evermore need for the cross-border delivery of our services in meeting the demands of commerce.
In today’s digital age, the economy is based on the need for an infrastructure of global value chains (GVCs) where goods, services, capital and people move and are traded in a more efficient and opportune fashion. Yet, too many obstacles remain that are leading to trade friction, hindering the ability of GVCs to work for growth and development. A growing number of these obstacles have little to do with borders, but rather arise from the decisions that countries make about their domestic regulatory priorities and the mechanisms used to affect and enforce these priorities. Every government has the sovereign right to regulate to protect the public interest. However, achieving more effective regulatory outcomes requires an appreciation of the impact of such regulation on international partners as well as where opportunities exist for greater coherence on the approach to regulation—through transparency, notice, and consultation as well as through the rules themselves, via harmonization, mutual recognition, or other means of compatibility.
For the accountancy profession, not least through assurance services, there are several examples to highlight in terms of the proliferation of regulation and the risk of regulatory fragmentation, and the costs associated, versus a system of good regulatory practices that works to facilitate cross-border trade, and therefore a growing profession. One obstacle faced by the profession includes restrictions placed on the flow of data across national borders through a variety of forced localization measures; the ability to collect and transmit data digitally and seamlessly across borders is critical for the supply of professional services. Furthermore, restrictions that impede the mobility of professional accountants are an area ripe for further trade services discussion—think visas for business purposes and credentialing of professional qualifications.
The above is only a snapshot of the range of issues that intersect with the profession. IFAC, its member bodies, and accountants broadly should take the opportunity today’s international trade agenda presents and engage in the process. The attention to trade expansion across the world is real. I challenge the profession to develop a strategy that appreciates the dynamics of global commerce and the importance of the services sector for overall economic output, and commit to positively contributing ideas and experiences into the discussion. All governments are interested in attracting and promoting trade and investment to help their economies grow, yet it is up to stakeholders to influence the direction of such thinking.
At the upcoming World Congress of Accountants in Rome, Italy, in November, I will join a panel to discuss the trade in services agenda in greater detail. A pro-active and pro-growth trade agenda is right for the economy, is right for a vibrant services sector, and is necessary for a growing and sustainable global accountancy profession. I look forward to continuing the conversation.
The Honorable Pierre Pettigrew is Executive Advisor, International, Deloitte, Canada. He will be participating in Trade in Services and Accountancy: The Profession Helping to Unlock the Full Potential (Session 1.9) at the World Congress of Accountants 2014 this November 10 – 14, in Rome, Italy. He will be joined by Peter Allgeier, President, Coalition of Services Industries, USA; Crawford Falconer, Director, Trade in Services Division, Organization for Economic Co-operation and Development, New Zealand; Ronan O’Loughlin, Director of Education and Training at Chartered Accountants Ireland; and Gary Pflugrath, Director, Public Policy & Regulation, International Federation of Accountants.