TWN Info Service on WTO and Trade Issues (Nov16/06)
2 November 2016
Third World Network

WTO now physical venue for questionable TISA pluri talks
Published in SUNS #8346 dated 2 November 2016

Geneva, 1 Nov (D. Ravi Kanth) - After inducing coma into the Doha Development Agenda (DDA) negotiations, major industrialized countries led by the United States and the European Union have now turned the World Trade Organization as the venue for their 21st round of negotiations for cobbling a grossly imbalanced plurilateral deal on trade in services agreement (TISA), trade envoys told the SUNS.

Beginning from Wednesday (2 November), the WTO along with the European Union mission will provide physical space for conducting negotiations among 23 countries of the TISA who seem determined to finalize the agreement by the end of the year.

The TISA involves around 17 sectors along with institutional and dispute settlement provisions, said a TISA trade envoy who asked not to be quoted.

TISA's 23 members include Australia, Canada, Chile, Chinese Taipei, Colombia, Costa Rica, the European Union, Hong Kong, Iceland, Israel, Japan, Liechtenstein, Mexico, New Zealand, Norway, Panama, Peru, South Korea, Switzerland, Turkey, the United States, Pakistan, and Mauritius.

In what appears to be a skewed closed/plurilateral (like the Government Procurement Agreement) in which the US wants ambitious outcomes in sectors like financial services, telecommunications, e-commerce, state-owned enterprises, and delivery services, chief negotiators along with their negotiators and specialists will move from one room to the other at the WTO for the next ten days until 11 November.

A combination of plenary and small group meetings will be held on a range of areas, particularly revised market access offers, financial services, localization provisions, telecoms, and e-commerce.

While other areas such as maritime transport, air transport, and road transport are also scheduled, the bulk of the intensive sessions are focused only on financial services, localization provisions, e-commerce, and dispute settlement, according to the agenda reviewed by SUNS.

However, issues of interest to developing countries such as movement of short-term services providers in Mode 4 and restrictive domestic regulation measures are not part of the agenda.

The round will begin on 2 November with plenary meetings in which all the participants will be provided a debriefing on what happened during the meeting of capital-based officials in Washington last month and intersessional meetings between the heads of delegations.

On 3 November, the TISA participants will focus on the revised market access offers at a plenary level as well as air transport services, localization issues, and financial services in small groups.

While air transport services are important for Australia, Switzerland, the European Union, and Hong Kong among others, the localization provisions to remove barriers on cloud computing services are at the heart of the United States' agenda.

The following day on 4 November, TISA negotiators will focus on maritime services in an open-ended meeting, and localization and financial services in small group meetings.

On 5 November, the 23 countries will focus their discussions on institutional issues in a plenary meeting, while continuing with discussions on localization, financial services, and dispute settlement in small groups.

TISA negotiators will again discuss localization, financial services, dispute settlement provisions, and electronic commerce in small groups on 6 November.

From 7 November, the focus will largely be on issues concerning state-owned enterprises, e-commerce, telecommunications, and dispute settlement provisions.

Other issues like delivery services and transport services are also expected to figure during the last four days.

The United States along with Canada, Australia, New Zealand, and Japan are pushing hard for new issues, i.e. provisions that will allow bringing new issues in the future into the TISA agreement.

The US wants horizontal national treatment commitments in new services in which the TISA members are following the so-called negative list approach involving national treatment commitments in areas that are listed in the offer.

However, the EU and its supporters such as Norway and Switzerland are resisting inclusion of any language on new issues in the TISA. They also remain opposed to ambitious provisions in the localization issues.

The US had presented its revised offer on 21 October with commitments on short-term services providers in Mode 4 being close to nil, said a developing country TISA negotiator.

Meanwhile, the EU cannot rule out the possibility that the TISA agreement, as and when it is concluded, could come under the category of mixed-competence which implies that whatever is negotiated by the EU and the Commission are not final unless they are ratified by the 28 countries and the European Court of Justice, an EU official told SUNS.

It appears that the ECJ (European Court of Justice) is currently examining the EU-Singapore bilateral free trade agreement to determine whether it falls in the mixed-competence category or in the exclusive domain of the Commission.

"We hope the court gives a clear verdict on what is mixed and what is not in the trade deals being negotiated by Brussels," the official suggested.

The just-concluded bilateral free trade agreement with Canada, and other agreements such as TISA, will hinge on the court's ruling wherein the agreements will have to be ratified by all the 28 members.

During the just-concluded mini-ministerial trade meet in Oslo, the TISA ministers separately held their meeting in which the EU and several other countries cautioned that they will scale down the level of ambition if there are no commensurate offers from others.

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.

The TISA commitments are replete with asymmetrical levels of ambition between capital-intensive sectors such as finance and telecoms among others and less capital-intensive areas like Mode 4. Significantly, the developed countries took more meaningful commitments in Mode 4 at the WTO as compared to TISA.

Further, 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.

The TISA participants are also stuck on the issue of "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.

In conclusion, the US and its allies - who ensured that the multilateral negotiations on the Doha work program are pushed into comatose conditions at the WTO - are now using the Centre William Rappard that houses the WTO as their preying ground to ram through plurilateral trade agreements such as TISA, a developing country trade envoy said.

[In a comment, Mr. Chakravarthi Raghavan, Editor-Emeritus of the SUNS, adds: From the beginning when the talks were mooted, initially as an International Services Agreement (ISA), and then as a conditional plurilateral accord to be called TISA, or a GATS Article V integration agreement, there have been serious questions and issues about its being prima facie WTO-GATS illegal (see Chakravarthi Raghavan (2014), Third World in the Third Millennium CE, Vol 2, pp 368-369). For the WTO secretariat to provide "physical space" (and not as "the forum") for the exercise, without a Ministerial Conference or General Council mandate and authorization, seems likely to land the Secretariat and the WTO DG into more controversy, and charges of functioning in the interests of a few members, and not the membership as a whole. Whether all this will find an echo in the re-election process of Mr. Azevedo, as DG for a second term, remains to be seen. - SUNS]