With the aim of overcoming stalemate in the Doha Round, a number of WTO members, including the EU and the US, are about to launch negotiations on a plurilateral Trade in Services Agreement (TiSA).
Services were included in the Uruguay Round of trade negotiations, leading to the 1995 General Agreement on Trade in Services (GATS). Due to the restricted coverage of GATS as well as the growing economic importance of the services sector, one aim of the Doha Round launched in November 2001 was to address services. In 2004, WTO member states decided to focus negotiations on the most promising fields, including services. However, even a limited deal has not been reached as the prolonged stalemate of the Doha Round continues.
As a result, countries are increasingly resorting to regional or bilateral free trade agreements to liberalise their trade in services. In October 2012, the EU, Australia, Canada, Chile, Colombia, Hong Kong, Japan, Mexico, New Zealand, Norway, Pakistan, Singapore (later left the group), South Korea, Switzerland, Taiwan and the United States (known collectively as the “really good friends of services” – RGFS), declared their will to negotiate a plurilateral Trade in Services Agreement (TiSA).
EU and trade in services
Services account for about three quarters of the EU’s gross domestic product (GDP). The EU is the largest exporter of services in the world, representing 28% of total global services exports. It also has the largest volume of trade in services worldwide, with 23.5% of world trade in the services sector. Finally, in the EU, 68% of the labour force is employed in the services sector. Hence the EU has a strong interest in reducing and abolishing barriers to trade in services worldwide, as it could make the largest gains from additional exports of services. The European Services Forum has been calling for the launch of negotiations.
Trade in Services Agreement: divergent views
In the Doha Round, the emerging markets argued that industrialised countries were trying to achieve access to services in emerging markets while offering too limited concessions on their own part. For now, the emerging-market economies with the highest growth potential, such as China, Brazil and India, are not participating in the TiSA negotiations. At the same time, according to some calculations, existing trade barriers of the RGFS account for around 60% of the global costs of trade in services.
Some countries have concerns on possible negative consequences for the Doha Round and the multilateral trading system. The RGFS have agreed that any agreement will include the objective of becoming a full part of the WTO system. However, it is not clear if it would be possible to achieve such full incorporation after the TiSA is concluded.
In March, the Council approved a mandate for the European Commission to negotiate TiSA on behalf of the EU.
The Parliament’s Committee on International Trade (INTA) has prepared a motion for resolution for a debate on the Commission’s statement on opening of negotiations on a plurilateral agreement on services. The draft resolution recognises the importance of services for the EU’s economy and welcomes the opening of TiSA negotiations. The resolution also notes that emerging-market economies are not so far participating in the negotiations and invites them to join. Finally, the resolution urges keeping the agreement open to other participants by following the GATS format, and considers that it should include an accession clause