Service on WTO and Trade Issues (Jun16/06)
10 June 2016
Third World Network
emerging in plurilateral talks for TiSA
Published in SUNS #8255 dated 6 June 2016
Geneva, 3 Jun (D. Ravi Kanth) -- Cracks are finally emerging in the
grossly imbalanced, plurilateral talks on a Trade in Services Agreement
(TiSA) being pursued by 23 countries, after the European Union and
several other members voiced concern about the overall quality of
the latest revised offers and the exclusion of Mode 4, maritime transport,
and sub-federal categories among other sectors, several trade envoys
told the SUNS.
Although the trade ministers and senior officials of the TiSA countries
who met on the margins of the annual Organization for Economic Cooperation
and Development (OECD) meeting in Paris put up a brave face by issuing
an optimistic statement about concluding the negotiations by the end
of the year, they could not conceal their growing disappointment over
the poor quality of the latest revised market access offers as well
as back-tracking by some members of the group, in offers well below
the overall GATS (General Agreement on Trade in Services) floor, participants
The EU came out into the open at the Paris meeting on Wednesday (1
June) by suggesting that the level of "ambition" in the
revised offers is lacking. "The recent revised offers and the
work done so far represent real improvement, but we certainly need
more ambition," the EU's trade commissioner Cecilia Malmstrom
"The EU is ready to go an additional mile but everyone needs
to join if we want to achieve an agreement able to shape the global
economy of the 21st century," she said.
The US, according to one source, has not included an offer on Mode
4 (delivery through movement of natural persons) and maritime transport
services while raising the ante on financial services, telecom services,
e-commerce, and localization (local content requirements in services,
particularly servers and other requirements in e-commerce).
The US is also not ready to table and commit its sub-federal sectors
in the overall market access demands.
However, Washington pressed the other members to start negotiating
about new services which are not yet fully implemented by several
TiSA member countries, the source said.
The US is also not prepared to accept any reservations/exceptions
in the national treatment provisions for new services and other areas
in which the TiSA members are following the negative list criteria
for the agreed sectors, according to the source.
While Uruguay and Paraguay have withdrawn from the TiSA talks, Mauritius,
which has become a tax haven for alleged dubious/illegal trusts and
companies, has circulated its latest offer. Taipei did not table its
latest offer because of the recent elections.
At the end of the 18th round of negotiations on Thursday at the EU
mission, differences among the participants were writ large on several
aspects of the negotiations.
During the eight days of negotiations that began on 26 May at the
EU mission, the TiSA members discussed revised market access offers
in areas such as short-term services providers under Mode 4, telecom,
financial services, and transport sectors (air, maritime, and road),
energy, environment, and delivery services.
They also discussed textual provisions and annexes on Mode 4, transport
sectors, telecoms, financial services, localization, and e-commerce.
Besides, there was an inconclusive discussion on the institutional
architecture for the proposed TiSA agreement.
There were concerns on seven grounds following the latest round of
To start with, there are grave doubts whether the revised offers submitted
by 22 countries are above the "GATS floor" which is what
was envisaged when the negotiations were launched in early 2012.
The question over the GATS floor came up because some members have
back-tracked in their latest market access offer commitments in areas
such as Mode 4, including the United States, according to a participant
familiar with the technical level of discussions.
While the GATS-floor was selectively crossed by the US and other major
industrialized countries, it was left hanging when it came to services
that are not overly capital-intensive such as in Mode 4. Besides,
the overall level of ambition in transport services involving maritime,
road, and air are well below other areas because of opposition from
the United States, according to another participant.
Second, the chances of good quality offers in sectors such as maritime,
road, and air are unlikely to match the high level of ambition being
pressed by the US and the European Union in other areas of their interest.
While the two trans-Atlantic elephants are beating the drums for ambitious
high-quality offers in financial services, telecommunications, environmental
services, professional services, e-commerce, and localization requirements,
they are not forthcoming in demands raised by the developing country
members of the TiSA, said an Asian participant.
Third, the TiSA participants are unclear how to raise the level of
the bar in terms of ambition with the demands being raised for matching
with their best FTA (free trade agreement) commitments in different
Several participants told the SUNS that it is difficult to match with
the best FTA commitments because those commitments were made in the
context of give-and-take between the signatories of those agreements.
Fourth, the TiSA participants are stuck because of the raging debate
on "policy space" as some major developed countries including
the US and the EU are not prepared to open some sectors on the pretext
of policy space, participants said.
Fifth, there is growing concern, even among some developed countries
such as the EU, over poor quality as well as lack of offers on contractual
services providers and independent services providers in Mode 4, participants
The US did not even place an offer in Mode 4 which caused concern
among several members, according to the participants.
Sixth, the US wants to introduce new services and wants the remaining
TiSA participants not to place any national treatment reservations
or exceptions. Several members - the EU, Korea, Switzerland, and Norway
- remain opposed to the US demands on new services.
Seventh, the US is not willing to place sub-federal areas in the TiSA
market access offers. The US is joined by Australia in excluding any
coverage of the sub-federal areas in the TiSA agreement.
In short, the latest round of negotiations have revealed that a comprehensive
and ambitious TiSA agreement covering all areas in a "symmetrical"
framework is out of the question and far-fetched, participants said.
"There will be pronounced asymmetries in the levels of ambition
in different services sectors, and barriers," according to several
members familiar with the negotiations.
[Former trade negotiators and trade experts suggest such a plurilateral
accord will be contrary to the WTO, and cannot be lodged as a plurilateral
agreement in the WTO's annex, nor would it qualify as a ‘services
integration agreement' among participants under Art. V of GATS. See
Raghavan (2014) ‘The Plurilateral Services Game at the WTO', pp 367-370,
Third World in the Third Millennium CE, Vol. 2, ‘The WTO - Towards
Multilateralism or Global Corporatism', TWN, Penang.]
The United States, the European Union, and Switzerland among others
want a high level of ambition in areas such as banking and insurance
sectors, telecommunications, distribution and retail services, and
even electronic commerce.
More crucially, the US remains indifferent to any opening in maritime
services as demanded by Norway along with several TiSA members which
include both developed and developing countries.
The US and the EU are not willing to support any liberalization of
road transport services as demanded by Turkey and Mexico.
The US continues to turn a deaf ear to air transport services as demanded
by several members such as Australia and Switzerland among others.
Against this backdrop, the TiSA ministers have agreed to place their
second revised offers in October that will suggest whether an agreement
is possible. The exclusion of China from the TiSA negotiations is
also having an adverse impact on the plurilateral negotiations on
environmental goods, participants said.
China has now called for negotiating a multilateral agreement on trade
in services at the WTO and outside the TiSA, according to a participant
who was present in Paris.
In crux, the US-led TiSA talks might not be concluded by the end of
the year because of too many imponderables that cannot be resolved
in a US Presidential election year, participants maintained. +