The Lisbon Agenda and the Relocation of Economic Activities Abroad activities within manufacturing. With the expansion of information and communication technologies, it is now possible to outsource business processes such as customer service, telemarketing, and document management but also financial services and IT services such as software development. The number of services that require geographical proximity(so called face-to-face services) might well shrink even further. The recent withdrawal for revision within the EU of the so-called Bolkestein draft directive on“services in the internal market” reflects different, even conflicting, views on the further liberalisation of international trade in services. Especially to the new EU member states, the withdrawal signifies the abandonment of one of the basic principles of the EU's Internal Market, that is, the free movement of services. To some of the older member states, by contrast, it means a similar abandonment of social and economic rights and guarantees hard fought for and achieved over decades. In view of this, there is a clear need to observe a difficult middle road between ensuring regular provision of services in public utilities and avoiding any semblance of social dumping in the service sector. The fairly recent phenomenon of service outsourcing is the main driver of renewed political attention to the issue. Whereas traditional outsourcing in the manufacturing sector affected low-skilled, blue collar workers, service outsourcing is seen as a threat to well paid, white collar jobs. This has considerably increased lobbying efforts. A recent study in the US has shown that among individuals with an annual income above$100,000, the percentage of those actively supporting free trade slipped from 57% to 28% between 1999 and 2004(Amiti and Wei, 2004). Having attracted manufacturing relocation and investments in the early 1990s, CSEE countries are increasingly successful in attracting service sector contracts and investments. They offer a large pool of college graduates with technical and language skills, especially in German and English that make them attractive locations for service and business process outsourcing. The Czech Republic is so far the most prominent host country for service sector outsourcing and the number of call centres is set to rise about 70% to more than 500 by 2007(Central Europe Leads Growth in Call Centres, 2003). CSEE countries increasingly compete for contracts in the IT sector with India and benefit from their geographical and cultural closeness to Western Europe. A survey found that nearly half of European companies were planning to move more services offshore. Among these, UK companies accounted for 61% of the total of jobs moved, followed by Germany and the Benelux countries with 14% 151