Australia-EU Trade in Services: The Case of Professional Services Firms (with Christopher Findlay)

This paper offers a case study to exemplify the opportunities for increased bilateral services between Australia and the EU, as well as the obstacles that stand in their way. Embodied human capital is the key resource for professional service firms. However regulations related to the movement of professionals and mutual recognition of professional qualifications act as barriers to internationalisation of professional service firms. This study explores these issues on the basis of the case of Australian architecture services firms in the EU. It offers an analysis of the differences in the nature of the work undertaken in Europe. It finds that firms use the UK to gain experience and as an entry point to pursue business opportunities in continental Europe as well as the Middle East. The EU market is perceived as less-restrictive as that of the US or certain Asian countries, and providing greater security in terms of intellectual property and payments. Competition in the EU is strong, but winning competitions for projects enhances a firm’s reputation in the market. Difficulties in securing recognition of professional qualification and registration of architects are seen as potential barriers to movement of people between Australia and the EU.