'RIMS is an emerging IT services category'

How do the different EU countries view outsourcing of IT and

business-process services? Are Continental countries more conservative than

Britain?



We've just had a discussion on the European Services Directive that is
supposed to put in place a final draft of a single market and liberalize

services across the EU. It was subject to a lot of heavy lobbying from the

French, Germans, Italians and Spaniards who argue in favor of excluding health

and education and some public services.

On the other hand, there are a much wider variety of services

that can be outsourced from the UK because the UK is not prepared to spend as

much of its GDP on the public sector as France and Germany do. The British

government has bought excess capacity in Germany and France and is sending

people there for operations. There is no reason why that is not an option rather

than bringing nurses and doctors from another country and building hospitals in

the UK.

With Bulgaria, Romania and Turkey poised to enter the EU, are

Western European companies more likely to outsource to Eastern Europe than to

countries like India?



A lot of outsourcing that was originally done from Western Europe to places
like the Czech Republic, Hungary and Poland is now shifting further away because

those countries have become more expensive. Romania and Bulgaria suffer, if not

in reality then in perception. Companies look out of Europe at places like

India, Thailand and Malaysia.

What is the EU's stance on IT services at the WTO?



The way outsourcing appears in WTO terms is that British, French or Spanish
companies would be able to set up subsidiaries or business branches in another

country. Allowing companies to set up subsidiaries is not a problem, the free

movement of people that is more controversial.

EU put in a very positive offer on the immigration of skilled

labor issue at the WTO Doha talks. The EU position is not based on quotas and is

more liberal than the US position.

Juhi Bhambal, Global Services





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