TISA Talks Making Strong Progress, Officials Say

1 May 2014

Participants of the plurilateral talks on liberalising services trade continue to make good progress, officials involved in the process confirmed yesterday, just a year after formal negotiations kicked off. The group involved in the Trade in Services Agreement, or TISA, is in the middle of its sixth negotiating round, which is due to end later this week.

The comments came during a meeting hosted in Geneva on Wednesday evening, in the first information session on TISA that has been opened to the general public. The event, which generated both an informative and substantive discussion on the proposed trade pact, drew a broad audience, including WTO ambassadors, staff from the global trade body’s secretariat, trade policy officials, private sector representatives from the Global Services Coalition, NGOs, and members of the press.

[Editor’s note: Wednesday’s public information session was hosted by ICTSD, the publisher of Bridges. A full video recording of the event is available on the ICTSD website.]

“We’re well on track to meet our objectives for the TISA. We have really fast-tracked those, that’s why we’ve made so much progress in the past twelve months,” said Australian WTO Ambassador Hamish McCormick.

Negotiations for a plurilateral services deal began in early 2013, after several months of exploratory discussions among a subset of WTO members.

The group of participants involved – which includes both developed and developing economies – has grown from the original 16 to the current 23, which together account for approximately 70 percent of global services trade. The 23 participants are actually 50 countries, with the 28-nation EU counted as one participant.

This latest round of TISA negotiations is being hosted by Australia, and is set to conclude on Friday. A full update on the results of this week’s talks will be available in next week’s edition of Bridges.

Doha context

The TISA initiative, participants reiterated on Wednesday, came in response to the direction given by ministers at the WTO’s Eighth Ministerial Conference (MC8) in 2011, where the global trade body’s members were directed to explore new negotiating approaches in light of the stalemate in the Doha talks.

The Doha Round negotiations kicked off in 2001, with WTO members hoping to conclude the wide-ranging talks within four years. Several years and setbacks later, the negotiations were formally declared at an impasse during the 2011 ministerial. Members today are now looking at ways to reinvigorate the Doha talks, particularly after having achieved a smaller deal at their 2013 ministerial in Bali, Indonesia on some select subjects – most notably trade facilitation.

“It turns out that MC8 was a very significant moment for the WTO, because what we decided there was that we needed to think of things in a new and open-minded way, and to consider new approaches,” said Michael Punke, the US’ WTO Ambassador, referring to the 2011 ministerial instructions.

The Doha services talks were “not sufficiently ambitious,” he noted, adding that TISA participants are aiming for something that is both Doha-plus and builds on what participants have developed in their best FTAs.

In the months since the TISA discussions began, some WTO members not involved in these talks have questioned whether the plurilateral initiative could detract from efforts to advance multilateral negotiations at the global trade body, a notion that TISA participants have worked to dispel.

“We are committed to the multilateral process,” Colombian Ambassador Gabriel Duque said, adding that TISA participants see the latter as an independent process “that may contribute to the discussions at the WTO.” Duque is also the chair of the WTO special session on services – which deals with the services negotiations in the context of the Doha Round – a role he took on earlier this year.

Participants of the trade talks have regularly reported back to their fellow WTO members on their progress at meetings of the organisation’s Council for Trade in Services.

Since the TISA talks were launched last year, the discussions have proceeded rapidly, with participants noting a “spirit of problem-solving” in the group.

“That doesn’t mean that there aren’t difficult issues, that there aren’t arguments and debates, but it’s all done in a very constructive way,” Punke said, emphasising the common willingness of the participants to achieve outcomes.

The fact that this is a standalone services agreement – unlike the Doha talks, which involve balancing across a range of trade areas – was highlighted by participants on Wednesday, with EU chief negotiator Ignacio Iruarrizaga Díez noting that this “is the first time for most of us that we are negotiating an agreement that is only a services agreement.”

As a result, “we have to find balance within the group” and within the area of services, he noted, making it notably different from the Doha Round talks. “We cannot seek balance somewhere else” in the case of TISA.

Market access offers

At the last round of negotiations in February, the group held a first review of market access offers, which were tabled by 21 of the 23 TISA participants – in itself a feat, giving the difficulty seen in the WTO services talks to get a significant portion of the membership to submit offers. (See Bridges Weekly, 27 February 2014)

Officials confirmed that no new offers have been submitted from the two TISA members – reportedly Pakistan and Paraguay – who had not sent in their offers ahead of the February session. The US, however, has submitted a revised offer that addresses financial services, which negotiators say is meant to reflect what has been achieved at a “best FTA” level.

The TISA offers to date have not been made public, which has prompted questions from some trade observers on transparency in the process. Officials on Wednesday noted, however, that it is up to each participating government to decide whether or not to make its offer public.

While some – though not all – of the first offers in the WTO services talks were made public, officials noted, this was also done at members’ own discretion. Furthermore, making offers public is not common practice in negotiations for regional trade pacts.

New disciplines

The proposed TISA deal aims to use the core structure of the WTO’s General Agreement on Trade in Services (GATS), such as definitions, scope, market access, national treatment, and general and security exceptions. However, it will also incorporate a series of new disciplines in areas where there have been notable developments since the Uruguay Round Agreements that established the WTO were signed in the mid-1990s, along with enhancing some of the existing disciplines.

Fourteen areas are being discussed in this rules area, with air transport, road transport, delivery services, energy services, telecommunications, e-commerce, financial services, maritime services, professional services, and mode 4 – which involves services provided by foreign nationals abroad – among those being reviewed at this week’s negotiating session.

McCormick noted, for instance, that Australia has tabled a proposal to improve commitments on professional services, with the goal of enabling professionals – such as lawyers, architects, or engineers – to work overseas more easily. The proposal, he says, aims to allow these professionals to provide their services abroad without having to be residents of that country, among other provisions.

Turkish WTO Ambassador Mehmet Haluk Ilıcak added that his country is the proponent of a proposal on mode 4 – building on the GATS disciplines in this area – that has also become a negotiating paper for the group. Turkey is also backing a separate proposal involving the regulation of road transport, he noted, given the need to improve the efficiency of this area.

Widening the membership?

The 23 current TISA participants are Australia, Canada, Chile, Chinese Taipei, Colombia, Costa Rica, the EU, Hong Kong, Iceland, Israel, Japan, Liechtenstein, Mexico, New Zealand, Norway, Pakistan, Panama, Paraguay, Peru, South Korea, Switzerland, Turkey, and the US.

China and Uruguay have both expressed interest in joining the talks, with Beijing recently receiving the support of the EU in its bid. China’s interest has been watched closely by trade observers, both because of its earlier reservations regarding these types of plurilateral initiatives, and also because of the size of its services sector. (See Bridges Weekly, 3 April 2014)

For both Beijing and Montevideo, a few TISA participants are still in discussions with these two countries over their “like-mindedness” with the current group. A US official said that those TISA members who continue to have reservations about these countries’ entry are still waiting for assurances in this area.

“We are looking to see what can be achieved,” the official said, noting that participants “are extremely mindful of the experience we had… in the Doha negotiations.”

TISA members say that they hope to someday multilateralise the deal – thus extending the benefits from this group’s concessions to the whole WTO membership – once they reach a critical mass of participants. When this might be, and what level might qualify as “critical mass” in order to make the possibility of free riders acceptable, remains to be determined.

“We’re hopeful that other WTO members will see the progress that has been made and will want to join the TISA negotiations,” Australian Ambassador McCormick said, while highlighting that new participants must demonstrate that they share the group’s objectives and levels of ambition.

ICTSD reporting.

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