Services Talks Advance as TISA Members Prepare to Exchange Offers

26 September 2013

Negotiations for a plurilateral agreement on services trade advanced in Geneva last week, sources confirmed to Bridges, with members making "substantial" progress on the deal's draft text. The group has also set November as the date when members will exchange initial market access offers, with the US and Japan already presenting theirs this month.

The group, known as the "Real Good Friends" of services, began discussions on a possible plurilateral services pact over a year ago, given that multilateral negotiations on the subject within the WTO have long been stalled. The planned deal is known as the "Trade in Services Agreement," or TISA.

The group's momentum and membership have both grown since the original talks began in early 2012, with 23 members now involved in the initiative - up from the original sixteen. Paraguay and Liechtenstein are the latest to have joined the RGF, which as a group represents over 70 percent of global trade in services.

Core provisions of draft text "stabilised"

Members of the group made "good progress" on the draft TISA text last week, one source confirmed to Bridges, with another noting that the core provisions have now been relatively stabilised, despite some remaining sticking points. Members also held discussions last week on areas such as temporary entry, professional services, maritime, and financial services.

Sources say that the group has tried to keep the text as similar to the WTO's General Agreement on Trade in Services (GATS) as possible, given the wish of later expanding the agreement to include other WTO members. However, the group is also looking to bring the services-related advances made in bilateral and regional deals into the TISA text in some way, given that there are currently over 100 preferential agreements with provisions on services.

Even while building on the GATS, one official stressed, "we're not creating any animal too dissimilar to the [WTO agreement]. We want it to be something that others can recognise and see the value of."

Market access offers expected in November

Two initial market access offers have already been tabled this month, sources confirmed to Bridges, with the US submitting its offer a few weeks prior to last week's meeting, and Japan submitting its own shortly thereafter.

"There was a very positive reception to the US and Japanese offers," one source said, noting that the offer from Tokyo was of particularly high ambition. The US offer, while also "strong," did not include financial services or Mode 4, where services are provided by foreign nationals abroad, the source added.

Another official explained that the US offer appears to be a partial one. However, the timing of the US offer, the official added, "came a little bit as a surprise" to some members, given the understanding among the group that they would first stabilise the TISA text before proceeding with an exchange of offers.

The rest of the group is expected to "do their best" to exchange their offers during the month of November. Members will then analyse the offers over the coming months, with plans to discuss them during a round in February.

The group is also set to meet during the week of 4 November to discuss the sectoral part of the text, now that the horizontal part has been stabilised. Market access offers will not be discussed at that meeting.

Though members are now at the stage of exchanging initial offers, multiple sources speaking to Bridges stressed that it is still far too early to predict when the negotiations might be completed, given that much work remains on resolving both market access issues and new and enhanced disciplines.

"We'll need a fair bit of work to close those off," one said.

China interest?

China, which had previously been among the WTO members to question the systemic implications of plurilateral initiatives such as the TISA, has now expressed interest in joining the group, sources told Bridges.

According to the Financial Times, Chinese and US officials have met repeatedly over the past few weeks to discuss the possibility of Beijing taking part in the TISA talks. Washington officials, while interested, are reportedly concerned over whether bringing in a member with such strong interests as China could serve to lower the ambition of the current negotiations.

Whether or not Beijing will become part of the Real Good Friends will depend on if the whole group agrees, as new members to such trade initiatives are usually agreed by consensus.

"We still need to see how we deal with such requests, how it matches with the level of ambition [of the Real Good Friends]," one delegate familiar with the Chinese request said. "We're certainly interested, certainly talking to China to see what's driving them and how they're interested."

RGF members have stressed that the group is open to any who wish to participate, as long as they match the level of ambition of the current participants.

More information

The 23 WTO members currently in the RGF group are Australia, Canada, Chile, Colombia, Costa Rica, the EU, Hong Kong, Iceland, Israel, Japan, Liechtenstein, Mexico, New Zealand, Norway, Peru, South Korea, Switzerland, Taiwan, Turkey, Pakistan, Paraguay, Peru, and the US.

ICTSD reporting; "China in push to join US-led $4tn services trade talks," FINANCIAL TIMES, 23 September 2013.

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