This week, the Trade Committee adopted a report on the Trade in Services Agreement TiSA by a majority that includes important warning signals to the European Commission, the authority leading the negotiations. However, there are still far too many loopholes which may undermine the protection of public interests.

Given the fact, that the vote had already been postponed once, the Trade Committee of the European Parliament reached agreement at the beginning of the week. Whilst the rapporteur MEP Viviane Reding (EPP) emphasises the signal effect for the European Commission, more sceptical voices talk of too many watered down recommendations and compromises.

The unresolved issues for the vote in the plenum at the beginning of February included the questions whether a universal rejection of the so-called “negative list approach” and the associated “ratchet” and “standstill clauses” might happen. There was no clear rejection in the Trade Committee. The use of these new liberalisation methods results in the fact that all exemptions from full liberalisation get under stonger pressure (“list it or lose it”). Some of these new methods have not only already been applied to the current TiSA, but also in the TTIP negotiations. Corporate lobbies are hailing their use as a success. If the European Parliament would come out in favour of a full return to the standard negotiation approach “positive list” from the WTO General Agreement on Trade in Services GATS (possible liberalisation obligations have to be specified in detail), the European Commission would be forced to fundamentally change course.

Added to this are a number of areas, where until now the recommendations by the European Commission have left too much room for manoeuvre. For example, in its opinion on the Reding report, the Employment and Social Affairs Committee (EMPL) still supported the idea to incorporate enforceable and sanctionable ILO Labour Standards in TiSA. Now the adopted report only contains a non-binding phrase. In addition, the report includes the welcome demand for a review of the so-called “Public Utility” clause to become a standard clause for the protection of public services. However, in this context one failed to ensure that such a standard clause for the protection of public services has to be applicable to all contract provisions of such agreements (e.g. not only in parts to market access obligations such as the so-called “Public Utility” clause, but also to areas such as national treatment, investment protection, public procurement or domestic regulation).

Improvements in the plenum required

From the point of view of the AK, it is vital to ensure a clear and full exemption of services of general interest from the scope of such agreements as well as enforceable and sanctionable ILO Core Labour Standards. In this context, fundamental reforms are not only necessary in connection with TiSA, but also within the framework of the contract text of the WTO General Agreement on Trade in Services GATS. Concerning the temporary movement of natural persons (mode IV), it is essential to ensure that any further negotiations must be subject to the condition that an effective cross-border cooperation of legal and administrative authorities is implemented. The given lack of legal and administrative enforcement mechanisms provokes to bypass high-level standards of social and employment legislation and collective wage agreements. Against this backdrop one must in particular refrain from committing higher levels of mode4-obligations to countries outside the EU (and irrespective of the willingness of other TiSA-parties to extend their offers and their demands for mutual trade-off). Apart from that, one needs - against the background of the negative experience of the financial and economic crisis - clear guidelines, which exclude further negotiations by the European Commission on the liberalisation of financial services.

Further Information:

AK Position paper Current negotiations on the plurilateral Trade in Services Agreement (TiSA)

AK Position Paper on the EC Communication Trade for all – Towards a more responsible trade and investment policy

AK Position Paper on TTIP and CETA

Published texts of the European Commission on TiSA

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

AK Wien information letter EU & international 2/2013, Article “GATS reloaded”, page 25ff (German only)

Study “TiSA versus Public Services” by Public Services International (PSI) 

Study Public Services under Attack

Study “Public Services in Bilateral Free Trade Agreements of the EU