Free trade agreements
Trade in services agreement (TiSA)
Published 06 September 2016
The services sector is the world's largest employer and produces 70 percent of global domestic product (GDP). But the last major trade in services agreement was concluded by WTO Members more than twenty years ago.
The last major services agreement was concluded by WTO Members in 1994, more than twenty years. ago. Global services trade has grown faster than the ability of new negotiations to keep pace. Transportation is more efficient. Digital transactions and e-commerce enable providers to reach global customers cheaply and quickly. The e-Bay phenomenon made small traders out of millions of people.
The services sector is the world’s largest employer and produces 70 percent of global domestic product (GDP). Services refers to a very broad and growing range of economic activities from audiovisual, construction and computer-related services to retailing, tourism, and accounting. Services include end-use products such as legal services and financial products, and many services encompass the logistics industry like trucking, express delivery, or freight forwarding.
Many countries have included commitments to open their services markets in their bilateral and regional free trade agreements. Multilateral negotiations to open markets globally for services had been part of the Doha Development Agenda, the last major round of trade negotiations in the WTO, but the negotiations failed to make sufficient progress.
As a result, 23 WTO Members agreed to launch ” plurilateral” negotiations to reach an agreement outside of the WTO. They include: Australia, Canada, Chile, Chinese Taipei, Colombia, Costa Rica, the EU, Hong Kong China, Iceland, Israel, Japan, Korea, Liechtenstein, Mauritius, Mexico, New Zealand, Norway, Pakistan, Panama, Peru, Switzerland, Turkey and the United States. Some major emerging markets including China, Brazil, and India have not joined the talks. Observers emphasize the importance of their inclusion given the rapid growth of a middle class consumers of global services.
The last major trade in services agreement was concluded by WTO Members more than twenty years ago.
The 23 participating countries seek to reach agreement to remove barriers to services trade that are not addressed by the 1994 General Agreement on Trade in Services (GATS). For example, some governments limit the movement of data across borders or force the transfer of proprietary technology. Others restrict competition by maintaining state-owned enterprises. The regulatory environments in service sectors may lack transparency or companies may experience discrimination when seeking to obtain business licenses and permits.
While TiSA is being negotiated by 23 WTO Members, an agreement would be open to all WTO Members willing to undertake its commitments. If enough WTO members join, TiSA could become a full WTO agreement.
© The Hinrich Foundation. See our website Terms and Conditions for our copyright and reprint policy. All statements of fact and the views, conclusions and recommendations expressed in this publication are the sole responsibility of the author(s).