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AK warns against pressure on public services by TiSA

The EU, the USA and 22 further states have been negotiating a new trade agreement for services, the so-called “Trade in Services Agreement” (TiSA) since 2013. Due to the planned Agreement, public services could come under increased pressure. A controversial debate on the significance of the TiSA negotiations for public services recently took place within the scope of a conference in the European Parliament. AK expert Nikolai Soukup, who participated in the conference, warned that because of TiSA national room for manoeuvre with regard to services of general interest might be further restricted.

The Conference on TiSA had been organised by the work group on public services within the scope of the Intergroup “Common Goods and Public Services” of the European Parliament. The so-called Intergroups of the European Parliament are discussion forums initiated by MEPs, which shall also promote the exchange with civil society. Apart from the AK representative, Ignacio Iruarrizaga Díez, Head of Unit, Trade in Services in the Directorate General for Trade of the European Commission, MEP Georges Bach (EPP), Luisa Santos Director of International Relations at BusinessEurope and Rainer Plaßmann of Stadtwerke Köln (Municipal Works Cologne) were present on the podium

Clear AK criticism against TiSA negotiations

AK expert Nikolai Soukup emphasised the great importance of public services as these were a core component of the European welfare model. Whilst over the past decades - due to market-creating initiatives at various political levels - services of general interest came under pressure, recently liberalisation projects have been met with the increasing resistance of the European population. This was not least a result of the numerous negative experiences with the liberalisation of public services, which were often accompanied by job losses, deterioration of working conditions and poorer quality of services. Given this background, it would be essential to guarantee the states' regulatory scope for action in the area of general interest in order undertake future political changes of direction and to be able to reverse failed liberalisations and privatisations. In this context, one should pay attention to the fact that obligations in the trade agreement following an agreement coming into effect, can only be reversed under particularly difficult conditions.

Public services were not generally exempt from the multilateral General Agreement on Trade in Services GATS. So far, there have also not been any reforms, which were aimed at improving the protection of public services in GATS. It was rather the case that the TiSA negotiations - due to the conflicts within WTO - were aiming at positioning themselves on a new negotiation terrain, where they would try to realise tougher liberalisation targets. In doing so, demands to exempt public services from trade agreements are further undermined. Soukup commented that in the current TiSA negotiations too, the exemption clauses proposed by the EU Commission were insufficient. It was also very problematic that the negative list approach was used in parts of the TiSA Agreement, according to which the relevant liberalisation obligations automatically applied to all sectors if no exemptions were explicitly entered. Apart from that one had to warn that TiSA provisions could create service-related regulations, which limit governmental scope, for example by determining that such regulations should “not be more burdensome than necessary”.

Danger of Legal uncertainty for public services

In his contribution, Rainer Plaßmann drew attention to the fact that the regulations of the EU law on services of general interest were hard-earned. There was a danger that international trade agreements could impair this legal framework. The hybrid approach from positive and negative lists in TiSA would make it extremely difficult to get a clear idea of the extent of the obligations in the Agreement. Plaßmann also criticised that some terms in trade agreements were not sufficiently clearly defined, such as the term referring to “public utilities”. The interplay between the various trade agreements such as CETA, TTIP and TiSA was also responsible for a number of open questions, which would create legal uncertainty. Plaßmann also commented that one had to consider that public services were very attractive to private investors as a safe investment.

EU Commission tries to calm things down

The representative of the EU Commission, Ignacio Iruarrizaga Díez, emphasized the economic significance of the service trade and pointed out that the EU would show a trade balance surplus in respect of trade with services. He tried to eliminate the concerns with regard to TiSA and pointed towards various exemption clauses as regards to public services in existing agreements, which the EU also intended to integrate in TiSA. Apart from that, he praised the transparency of the negotiations, as Council and EU Parliament would receive copies of all negotiation documents.

MEP Georges Bach, as representative of Viviane Reding (EPP) participated in the discussion and presented the positions of the TiSA rapporteur in the European Parliament. Reding was generally in favour of the TiSA negotiations, would however support the argument to exempt public services from the negotiations. The special significance of services of general economic interest would be embedded in the contracts of the EU; they would form part of the EU’s DNA and had to be granted special protection. There was requirement for resharpening and further negotiations in this sector. The EU Parliament would adopt a report containing its positions on TiSA before the end of the year.

Offensive interests of businesses

Luisa Santos expressed the expectations of the Confederation of European Business BusinessEurope on the TiSA negotiations, coming out in favour of expanding the market opening. She would welcome it if more countries, for example China and Brazil, would join the TiSA negotiations. In the context of the TiSA negotiations it was also possible to reduce regulation costs and, where it was conceivable, to harmonise standards. She supported further liberalisations in respect of public procurement and with regard to the temporary labour migration regarding cross-border services. From the point of view of BUSINESSEUROPE it was guaranteed that public services were not subject of the TiSA negotiations. However, she pointed out that privately financed services, for example in the education or health sector, should be subject to liberalisation obligations.

Further information:

Published texts of the European Commission on TiSA

AK Position Paper on the Plurilateral Services Agreement TiSA

Documentation of the Seminar “Challenging the liberalisation of public services in TTIP and beyond”, organised by AK, ÖGB, EPSU and ETUCE

AK Position Paper on TTIP and CETA

AK Vienna information letter eu & international 2/2013, article “GATS reloaded”, page 25ff

Study on TiSA by Public Services International (PSI)

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Foto: siebensieben / Quelle: photocase.de