Discussions
Talks on a Plurilateral Trade in Services Agreement
JB Cronjé, tralac Researcher, discusses the ongoing negotiations towards a plurilateral Trade in Services Agreement
Almost twenty years after the conclusion of the Uruguay Round and twelve years since the launch of the Doha Round of world trade negotiations, negotiations on important parts of the World Trade Organization’s (WTO’s) General Agreement on Trade in Services (GATS) remain unresolved. Unfinished multilateral negotiations in the area of services rule-making such as subsidies, government procurement, domestic regulation and emergency safeguard measures combined with the “limited, regulatory precaution-laden, pre-internet commitments of 1994” has left the world in many ways to conduct trade in services “with yesterday’s rule-book” (Sauvé, 2013). As a result, an increasing number of WTO Members have opted to conclude preferential trade agreements to advance their services agendas and to reap the benefits of extensive unilateral liberalisation over recent decades.
In October 2012, a self-selected coalition of WTO Members belonging to the “Really Good Friends of Services” grouping declared they will negotiate a plurilateral Trade in Services Agreement (TiSA) to advance the services negotiations and overcome the Doha Development Round stalemate. The WTO Members currently involved in these services talks include Australia, Canada, Chile, Chinese Taipei, Colombia, Costa Rica, the European Union, Hong Kong, Iceland, Israel, Japan, Mexico, New Zealand, Norway, Pakistan, Panama, Paraguay, Peru, South Korea, Switzerland, Turkey and the United States. This non-exclusive ad hoc coalition of WTO Members consists of a mix of developed and developing countries. They represent around 70 per cent of the world’s trade in services. Not a single WTO member from the African continent is currently participating in this initiative. Other emerging-market economies such as Brazil, China and India are also not participating.
The objective of the TiSA negotiations is to conclude an ambitious agreement that forms a full part of the architecture of the WTO alongside the General Agreement on Trade in Services (GATS). The aim of the “Really Good Friends of Services” group is not to merely negotiate a preferential services trade agreement under the guidance of GATS Article V (Economic Integration Agreement). According to the European Commission (2013), the future plurilateral agreement will imitate the GATS in order to attract broad participation and to multilateralise it in future. It is therefore envisaged that the type of obligations undertaken and the basic concepts of the TiSA will reflect those of the GATS. In order to avoid free-riding, the automatic multilateralisation of the agreement based on the Most Favoured Nation (MFN) principle will, however, be suspended pending the realisation of a critical mass of WTO Members joining the agreement. Other WTO Members will be allowed to accede to the agreement (EC, 2013).
Some countries have raised concerns that a plurilateral approach would undermine the Doha Round and the multilateral trading system as a whole. Negotiations are currently conducted outside the realm of the WTO and without the consent of the broader WTO Membership. Third countries and the WTO Secretariat are not allowed to attend or observe the negotiations. The closed door nature of negotiations will undermine the multilateral legitimacy of any future agreement and its ability to receive WTO recognition as a plurilateral agreement. Having said that, plurilateral and variable geometry approaches to rule-making and liberalisation may constitute an effective approach to tackling pertinent trade challenges and keeping the WTO relevant.
The jury is still out as to whether the “Really Good Friends of Services” will achieve their initial objectives. In the end, the Trade in Services Agreement may probably be recognised for what it is: a large GATS Article V economic integration agreement. However, if concluded, what incentives will it create for any further multilateral services negotiations?
Sources:
European Commission. (2013, 15 February). Memo: Negotiations for a Plurilateral Agreement on Trade in Services. EC, Brussels. Available at: http://europa.eu/rapid/press-release_MEMO-13-107_en.htm
Sauvé, P. (2013). A Plurilateral Agenda for Services? Assessing the case for a Trade in Services Agreement (TISA). Retrieved August 6, 2013, from http://www.nccr-trade.org/publication/a-plurilateral-agenda-for-services-assessing-the-case-for-a-trade-in-services-agreement-tisa/