What is the TiSA?
The Trade in Services Agreement (TISA) is the most promising opportunity in two decades to improve and expand trade in services. Initiated by the United States and Australia, the TISA is currently being negotiated in Geneva, Switzerland with 50 participants that represent 70 percent of the world’s trade in services.
The objective is to negotiate a high-quality and comprehensive agreement, which is compatible with the World Trade Organization (WTO) General Agreement on Trade in Services, will attract broad participation, and will support and feed back into multilateral trade negotiations. This is in direct response to a call by G20 Leaders and to the WTO Ministerioal Conference of December 2011 in Geneva to pursue fresh, credible approaches to furthering multilateral trade negotiations.
“4. In order to achieve this end and to facilitate swifter progress, Ministers recognize that Members need to more fully explore different negotiating approaches while respecting the principles of transparency and inclusiveness. (…),
6. Ministers also stress that they will intensify their efforts to look into ways that may allow Members to overcome the most critical and fundamental stalemates in the areas where multilateral convergence has proven to be especially challenging.”
Main elements of the future agreement
Although the negotiation of the agreement would be outside of the auspices of the WTO, the current potential members of the agreement share the understanding that the agreement should be brought back to the WTO and GATS, when the agreement attracted a critical mass of WTO-members. The agreement should be ambitious, comprehensive in scope and commitments taken should reflect in principle as closely as possible the autonomous level of liberalisation (i.e. binding the existing practice). Also, the negotiation is aimed at providing for new or improved market access. Moreover, new and enhanced disciplines should be elaborated on the basis of proposals brought forward by the participants. Such proposals are expected to be made in the area of domestic regulation (e.g. authorisation and licensing procedures), international maritime transport services, Information- and Communication Technology (‘ICT’) services (including cross-border data transfers), e-commerce, computer related services, postal and courier services, financial services, temporary movement of natural persons, government procurement of services, export subsidies and state-owned enterprises. This list is neither an exhaustive list, nor does it mean that it was agreed that in all those sectors there will be new and enhanced disciplines.
In terms of architecture of the future agreement, convergence could be found that the agreement would be based on the GATS, whereby some GATS core articles (inter alia on definitions, scope, market access and national treatment, general and security exemptions) would be incorporated. This would ensure a future possible integration of the agreement into the GATS. There would be additional provisions to govern how each member could take commitments. There was a general understanding that market access commitments should be taken as in GATS. In terms of national treatment, the agreement could contain the possibility to be applied on a horizontal basis to all services sectors and modes of supply. Exemptions to this horizontal application would then have to be listed in the countries’ national schedule of commitments. There was also convergence that commitments should in principle reflect the actual practice (“standstill clause”) and that future elimination of discriminatory measures should be automatically locked (so-called “ratchet clause”) unless an exemption is listed.
Unlike in the DDA negotiations, the possible future agreement would for the time being fall short of the participation of some of the leading emerging economies, notably Brazil, China, India and the ASEAN countries. It is not desirable that all those countries would reap the benefits of the possible future agreement without in turn having to contribute to it and to be bound by its rules. Therefore, the automatic multilateralisation of the agreement based on the MFN principle should be temporarily pushed back as long as there is no critical mass of WTO members joining the agreement. Such a temporary push back can be achieved by ensuring that the future agreement fulfils the conditions of an economic integration agreement as set out in GATS Article V, i.e. the agreement should have substantial sectoral coverage, provide for the absence or elimination of existing discriminatory measures and/or the prohibition of new or more discriminatory measures. At the same time, there was a common understanding to include an accession clause for interested WTO members and to elaborate a pathway to the multilateralisation of the agreement, i.e. the agreement should define the mechanisms and conditions for subsequent multilateralisation.
In March 2013, the Council of the EU authorised the Commission to open negotiations on a plurilateral trade in services agreement. It was also decided to request input and views of interested companies, associations and the civil society by launching a public survey.
ESF activiely participated to the consultation.
Further information can be found on the homepage of DG Trade: http://ec.europa.eu/trade/policy/countries-and-regions/agreements/index_en.htm
Further information on the ongoing negotiations can be found on the following link: http://trade.ec.europa.eu/doclib/html/150129.htm
Further information and statistics can also be found on the following link: http://trade.ec.europa.eu/doclib/html/122532.htm
The first two rounds were dedicated to finalise the understanding among participants on the content of the core of the text of TiSA, as well as on the method of scheduling the horizontal and sector specific commitments. The third round of negotiations of the Trade in Services Agreement (TISA) took place last week in Geneva from 24 to 28 June 2013. The meetings were chaired for the first time by the EU and took place in the European Commission Delegation in Geneva. Liechtenstein joined the group, and the EU informed the participants that Croatia will join the EU as of 1st July. TISA therefore regroups 23 participants, which represent 51 WTO Members.
The fourth round of negotiations of the Trade in Services Agreement (TISA) took placein Geneva from 16 to 20 September 2013. Uruguay has indicated that they also would like to join soon.
As of September 2013, participants in the TISA include Australia, Canada, Chile, Chinese Taipei (Taiwan), Colombia, Costa Rica, European Union (28), Hong Kong, Iceland, Israel, Korea, Japan, Liechtenstein, Mexico, New Zealand, Norway, Pakistan, Panama, Paraguay, Peru, Switzerland, Turkey, and the United States.
The next round of TiSA negotiations will be in the week starting on 4th November 2013. The participants agreed that they will continue to essentially focus on the sector specific disciplines, so as to move towards the consolidation of the future annexes of the new agreement. Indeed, it is considered that the added value of the TiSA will be as much in fixing news regulatory rules for all participating countries than in taking further commitments in the schedules.
The countries agreed to continue to work in parallel on the draft initial offers and that the offers should be tabled, as far as possible, in a window between the 4th November and the end of November, so that the December round might be dedicated to negotiations on the offers.
The interesting element was the formal application by China to jin TiSA. This possibility that rumored in Geneva for some weeks, and which many in Geneva and in capitals thought only as a long-term possibility, finally became a reality end of September 2013 when the Chinese Government, through its Chinese Mission to the WTO in Geneva, sent a letter to all Ambassadors of the TiSA participating countries. China is adopting a positive and offensive tone, highlighting the importance of China in international trade in services and mentioning the on-going domestic reforms in services sectors in China. They asked to participate to the next round of talks in December. This request puts lot of pressure on the current TiSA countries to provide a response .
The group of countries participating originally in the negotiations on the Trade in Services Agreement for which data are available represent a very substantial share of EU exports and imports
of commercial services: 58% of EU exports and 59% of EU imports. The overall average figures are however mostly determined by a sub-set of countries as the USA, Switzerland, Japan, Norway,
Australia and Canada alone represent almost 50% of both EU exports and EU imports.
With the majority of these countries the EU has already signed, is negotiating or is starting to negotiate ambitious bilateral agreements that include both goods and services liberalisation.
However, there is also a group of countries with which either the EU has agreements where services commitments could be deepened (e.g. Mexico and Chile) or has no FTA including a services chapter
(Australia, New Zealand, Pakistan, Switzerland, Paraguay, Taiwan and Turkey). These countries together represent at least 22% of EU exports and more than 20% of EU imports of commercial
services, which amount to 123 and 90 billion Euros respectively. It is noted that the EU is also an important trading partner for these countries. This is not only the case for smaller countries, but the
EU27 represents e.g. for the US 32% of its export and 34% of its imports of commercial services.