Services, TiSA, WTO & Plurilaterals

TiSA: modest ambitions

TiSAWill TiSA, the Trade in Services Agreement under negotiation among 23 WTO members since 2012, be finalised in 2016 as many of its members want? After a new round of negotiations held last week in Geneva and a ministerial meeting in Paris on 1 June, signs are talks are not quite ripe yet. Also, the EU, like the US, is not ready to give away a lot of market access. Iana Dreyer with input from Ravi Kanth.

 

After the 18th TiSA negotiation round held in Geneva in early June, the EU and its partners were quite near agreement on the final scope of the deal. Whether TiSA will be ready this year remains an open question, as ambitions on market access remain modest, including in the EU.

 

EU not happy with US and partner offers

 

Brussels  generally wants high-quality offers in maritime services, Mode 4 (movement of professionals), professional services, telecom services, and financial services, among others. The EU along with several TISA ministers expressed concern over the latest revised offers on market access in which the United States has excluded Mode 4 and maritime – an issue the EU is pursuing in its parallel negotiations with the US in TTIP.  The EU is also disappointed that the US’ offer does not cover how market access in different sectors will apply to sub-federal areas, according to a participant who asked not be identified. This again is an issue with the US in TTIP.

 

The US for its part is pressing for ‘horizontal’ (cross-sectoral) national treatment commitments in so-called ‘new services’.  The EU’s placement of visa and immigration reservations in a separate protocol regarding Mode 4 is an area which needs to be further ironed out as several developing countries participating in TiSA remain opposed to the move.

 

Overall, there is is still no clarity on the level of ambition across all areas, and also on how to deal with the new services sectors, including e-commerce and localization requirements.  Much would depend on the second-revised TISA offers that have to be tabled by early October.

 

Modest EU ambitions on own liberalisation

 

The US too expressed disappointment at the EU’s TiSA offering discussed early June. Indeed, the EU’s liberalisation ambitions remain limited. The revised offered Brussels published late May reveals the EU is likely less ambitious than in the Canada-EU CETA deal.

 

The EU text as published only reveals a fraction of what the EU’s services commitments in TiSA will be as these will be part of an overal broad deal with plenty or rules and disciplines on services.  The EU offer includes the schedule of commitments in specifically listed sectors. That offer is a hybrid of ‘negative list’ and ‘positive list’. The EU posits as a general rule that every sector is open for ‘market access’, except public utilities, activities related to public pensions, and audiovisual services.

 

Whereas the list of ‘reservations’ (exclusions from liberalisation commitments) is very limited for market access, it is quite extensive under the heading ‘national treatment’. The listed reservations are standard EU reservations present in most FTAs. These mostly stem from individual EU member states, but there are some EU-wide cross-sectoral reservations, most notably one on Mode 4 (movement of persons).

 

The national treatment reservations of member states concern composition of company boards in some countries (nationality requirements), real estate purchases (many restrictions in Nordic countries and in Central and Eastern Europe), or screening or authorisation for some investments in France and Italy. There are also sector-specific EU wide reservations in areas like cabotage and inward waterways, railway and road transport services, legal services, nurses and midwife services, education services, environmental services (except consulting, which is free), direct insurance, banking and asset management, publicly funded health and social services, libraries, and ‘new services’.

 

The EU is open for market access and national treatment in most business services (there are exceptions for legal, auditing, which mostly have to do with member state nationality requirements) in cross-border and investment, and in a limited fashion in Mode 4.

 

The EU’s offer is thus likely to placate NGOs and the EU Parliament, but not the US, nor many other TiSA partners.

 

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We have tracked the TiSA negotiation process throughout the last two weeks and our Borderlex PRO subscribers have benefited from daily insights on TiSA and other EU trade files. Why not sign up to a three-week free trial to Borderlex PRO? Just ask: subscriptions@borderlex.eu 

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