SIA in support of negotiations on a plurilateral Trade in Services - - PowerPoint PPT Presentation

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

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

Agenda

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

• Method: gravity analysis, with indicators for applied policies and binding
• verhang
• 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

Challenge: measure the effect of reducing uncertainty related to the binding overhang

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

• 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.

Overall social

Social conclusions and recommendations

• 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
• bligations 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).

Human rights

Social conclusions and recommendations

 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.

Human rights

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 -->
• nly 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.

ICT and telecommunications

 Computer services and telecommunication are dynamic sectors, with new business models and new technologies emerging. International trade rules and domestic regulation should avoid becoming straitjackets to the

• sectors. Thus reserving the right to regulate is crucial, as it encourages

experimentation in policy making.  Given the complexity of the issues at hand, the prospect for TiSA as a plurilateral agreement to achieve substantial progress with respect to the most important barriers for the sector may be low. We recommend that TiSA will at least define the key issues and offer general principles, so that TiSA can possibly set the stage for future trade negotiations addressing some of these issues in depth.

E-commerce

• “Sale or purchase of goods or services online”
• Not seen as a sector, but rather as a vehicle for commerce. The

importance of e-commerce is mainly derived from its impact on other sectors.

• Limited availability of data, in particular on cross-border e-commerce.

Consequently little rigorous research that could have informed the in-depth analysis.

• E-commerce services are substantially more used in North, Central, and

Eastern Europe, compared to South and Southeast Europe. Over 90% of the services supplied concern B2B e-commerce.

• E-commerce as a technology reduces trade barriers and thus trade costs

for other sectors, but at the same time is also subject to trade barriers itself.

E-commerce

• Expected impact from TiSA via a reduction in trade policy uncertainty.
• Given the limited data available, the potential impacts are very hard to

quantify: – Less trade policy uncertainty might raise cross-border e-commerce; – Less trade policy uncertainty might increase the relative attractiveness of traditional retail channels; – TiSA might induce firms to vertically integrate e-commerce activities; – And possibly other channels…

E-commerce

 Transparency about regulations, rules and processes would benefit e-commerce, by reducing cross-border information and search costs.  TiSA can be an important first step towards a better global governance of e-commerce. By covering and including all important areas of e-commerce, TiSA could provide the framework to be used in future bilateral or multilateral negotiations of e-commerce

Water transport services (freight and passenger)

• Modelling results predict a contraction of the EU water transport

services sector. 0.3% decrease in output, 0.2% decrease in exports, and a 0.3% decrease in employment.

• Small countries like Mauritius and Panama expected to gain.
• Modelling results are in contradiction with expectations, given the

strong position of the EU sector in the world.

• Qualitative analysis provides several explanations:

– Changes measured in percentage instead of absolute values – Very global sector – Cross-trades are important

Water transport services (freight and passenger)

 The modelling results predicted a small negative impact, however, additional analysis suggests that the EU sector is likely to gain from TiSA. Although many other factors point towards slight positive impacts, we suggest to monitor the changes in the sector stemming from TiSA.  We recommend including provisions in the agreement that encourage TiSA participants to work towards ratification and implementation of core labour conventions. When such a mechanism is not feasible within TiSA, we recommend to promote future ratification and implementation outside TiSA.  The agreement could include provisions that encourage TiSA participants to work towards ratification and implementation of the MARPOL annexes.

Stakeholder consultations and way forward

Stakeholder consultations

• Social media updates
• Stakeholder survey (October 2014 – January 2017).

– 246 have started filling out the survey, 50 completions – 74% from the EU, 5% from the US, and 3% from Australia. – 28% were social and human rights organisations, 19% were businesses, 19% were individuals, and 8% were business associations.

• Interviews (39 interview requests – 8 conducted)
• Limited stakeholder interest:

– No response – Point towards their position paper – They currently do not focus on TiSA since it is not one of their priorities.

Some statistics Over 1500 users and 2000 website visits 9 Facebook followers Almost 50 Twitter followers

Timeline and way forward

Activity / Deliverable Date Civil Society Dialogue Wednesday 17 May Deadline for final comments on the draft Final Report Friday 2 June Publication of the Final Report June

Input, comments, or feedback can be shared with study team via tsiatisa@ecorys.com

Thank you for your attention