SIA in support of negotiations on a plurilateral Trade in Services Agreement (TiSA) Draft Final Report Civil Society Dialogue meeting Nora Plaisier, Joachim Schellekens, Erik Merkus, Michael Fuenfzig, and Stephanie Bouman Brussels, 17 May 2017
Agenda 1. What’s new 2. Overall economic conclusions and recommendations 3. Overall social (incl. human rights) conclusions and recommendations 4. Overall environmental conclusions and recommendations 5. Sectoral impacts and recommendations 6. Stakeholder consultations and way forward
What’s new • Five social case studies • Five environmental case studies • Conclusions and recommendations of the sustainability impact assessment (economic, social, human rights, and environment). • Sectoral impacts • Sectoral conclusions and recommendations » Financial services and Insurance » ICT and telecommunications » E-commerce » Water transport services (freight and passenger)
Overall economic conclusions and recommendations
Economic analysis Challenge: measure the effect of reducing uncertainty related to the binding overhang • Method: gravity analysis, with indicators for applied policies and binding overhang • On average, results show that exporters are expected to respond to more secure market access (by means of binding policies) as if trade costs fell by 3.4 percent for OECD TiSA country’s markets and 5.8 percent for low and middle income country markets. • These results used in CGE model for estimating economic impacts
Overall economic conclusions and recommendations • Despite the small expected impacts in the EU , stakeholders have indicated the importance of binding the currently applied commitments. Therefore we recommend the European Commission to negotiate an ambitious agreement in terms of binding applied practices by commitments. • Although small, the outcomes show that the expected impact of TiSA on the EU would be larger when more countries would join the TiSA negotiations . Therefore we suggest to open up TiSA for other interested parties during the negotiations, but also after the negotiations are finished. This would also contribute to the objective of integrating TiSA in the WTO. • Increased transparency would be an important gain from TiSA for SMEs . We recommend to consider the establishment of an information point dedicated to SMEs, or an SME committee (like has been discussed in the negotiations on TTIP) that deals with issues and problems faced by SMEs.
Overall social conclusions and recommendations
Social baseline analysis • Employment: Chile, Colombia, Mauritius and Turkey are in the bottom 33 percent for almost every indicator. • Australia and Iceland have the highest minimum wage ( ≈ €1,650), while lowest minimum wage is in Pakistan (€86). • Mexico, Costa Rica and Colombia score lowest when looking at social protection. • Colombia, Mexico, Costa Rica, Panama and Peru have low scores when it comes to poverty and inequality. • More than half of the TiSA participants have ratified all ILO Fundamental Conventions. • Three TiSA participants have defined a Decent Work Programme (Chile, Costa Rica, and Pakistan).
Social conclusions and recommendations Overall social • TiSA is not foreseen to include specific social provisions or a Trade and Sustainable Development chapter --> only indirect impacts. • Increase of 0.1% in real household consumption and real wages. • Labour reallocation between sectors as a result of TiSA is smaller than 0.1%. • Consumers may also be affected by TiSA, as the agreement is expected to have some provisions on consumer protection. The TiSA final text could include provisions aiming at increased consumer protection by providing transparency and general principles, and to promote coordination between all TiSA partners in this field.
Social conclusions and recommendations Human rights • Positive impact on the right to work and the right to an adequate standard of living in all TiSA countries. • Stakeholder concerns regarding public services and the right to regulate, but obligations and rights not expected to be affected. • No EU position on data flows, but will seek to use trade agreements “to set rules for e-commerce and cross-border data flows and tackle new forms of digital protectionism, in full compliance with and without prejudice to the EU’s data protection and data privacy rules.” • Analysis does not point to negative human rights impacts from TiSA in the EU, but not all TiSA participants are party to all the core human rights treaties and fundamental ILO Conventions and in some governance is relatively weak (e.g. corruption).
Social conclusions and recommendations Human rights Recommend the EC to engage in continuous and open dialogue with interested stakeholders so as to ensure that any possible concern in sensitive areas is known and can be timely addressed, or that potential interesting new ideas could be taken on board. Recommend ‘to incorporate a comprehensive, unambiguous, horizontal, self-standing, and legally binding provision based on GATS Article XIV which fully exempts the existing and future EU legal framework for the protection of personal data from the scope of this agreement, without any conditions that it must be consistent with other parts to the TiSA’. Recommend to include provisions that encourage ratification and implementation of core HR treaties and fundamental ILO Conventions.
Overall environmental conclusions and recommendations
Environmental baseline analysis • Countries with high particulate matter exposure and a resulting negative environmental effect are Pakistan, Korea, Hong Kong China, and Taiwan. • Mexico, Peru, and the US rank highest in the number of endangered species. • Both Pakistan and Israel currently have a much higher consumption of water than available to them through natural replenishment (334% and 261% respectively). • Panama, Peru and Costa Rica have the lowest percentage share of population services by municipal waste collection (<75%). • The more developed countries have higher CO2 emission per capita.
Environmental conclusions and recommendations • No Sustainable Development Chapter, or provisions on energy or climate --> only indirect impacts. – Global increase in air pollutants ranges from 0.01% to 0.04%. • In the EU no change in CO2 emissions, a slight reduction in the emissions of NOx and SOx (0.05%), and a slight increase in the emission of CH4, N2O, NMVOC, and NH3 (0.01-0.02%). – Result of changes in sectoral composition and expansion of the economy. • Stakeholder concerns regarding semi-public sectors (e.g. waste management). – Reservations will apply to these services. • TiSA can help accelerate the diffusion and uptake of environmental services (and indirectly of environmental goods). As TISA may help to accelerate the diffusion and uptake of environmental services with positive environmental effects, we recommend the European Commission to be ambitious, promoting the binding of policies in this area.
Sectoral impacts and recommendations
Financial services and insurance • Small expected increase in financial services output (0.1%), more significant increase in export and import of 4.2%. Output of insurance sector estimated to increase by 0.2%, and export and import with 1.5% and 1.7%. • Modelling results likely to underestimate the effect of TiSA, given importance of FDI in the sector. • Social and environmental impacts are expected to be insignificant With increased trade and FDI it is likely that information flows and the transfer of data will increase as well; any transfer of personal data outside the EU should comply with EU legislation on personal data protection. In recent years there have been various efforts to improve supervision and consumer protection in the finance and insurance sectors. TiSA should not undermine recent measures and progress made in these areas. As a flanking measure, we recommend to push for standards at international level, specifically in new areas where regulation and standards are not yet or still being developed.
ICT and telecommunications • Further binding of applied policy would reduce or eliminate trade policy uncertainty. Small binding overhang for both computer services and telecommunications indicate relative low levels of trade policy uncertainty, and point towards limited potential for TiSA to foster trade in these two sectors. • For both sectors output and employment are not expected to change. • Exports of ICT services will likely increase with 0.9% and imports with 1.4%. Imports of communication services are expected to rise by 0.2%. ICT services, the wider internet economy and increasingly other sectors face similar issues, like data protection, privacy protection, local infrastructure requirements, intellectual property rights, or open standards and interoperability. We therefore recommend to address these issues not by sector, but rather horizontally.
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