Trade in Services Agreement (TiSA) Negotiations

Trade in Services Agreement (TiSA) Negotiations

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Updated July 7, 2017
Trade in Services Agreement (TiSA) Negotiations
Overview
imports. Surpluses in services trade have partially offset
The Trade in Services Agreement (TiSA) aims to further
large trade deficits in goods trade (see Figure 2).
liberalize trade in services among signatories and would
build on the 1995 multilateral World Trade Organization
Figure 1. TiSA Negotiating Parties’ Services Exports
(WTO) General Agreement on Trade in Services (GATS).
2016
GATS provides a system of rules for global trade in
services, and has served as a foundation for other regional
and bilateral free trade agreements. TiSA negotiations seek
to enhance rules and disciplines governing services trade
and gain additional market access for foreign service
providers.
The 23 TiSA participants, including the United States and
the European Union (EU), account for about 70% of world
trade in services, but do not include some major emerging
economies such as Brazil, China, and India. The United
States has existing or potential free trade agreements with
some of the TiSA partners (see Figure 1).
Unlike broader trade agreements, the TiSA focuses only on
services. While the negotiations are taking place outside of
the WTO, the TiSA framework aims to build on the GATS.
Reportedly, the agreement is being structured so it could be
incorporated into the GATS in the future, making it
applicable to all WTO members.
Congress set negotiating objectives to expand international

competitive market opportunities for services in the Trade
Source: CRS analysis of WTO data.
Priorities and Accountability Act of 2015, signed into law
Key Negotiating Issues
in June 2015 (Title I, P.L. 114-26). If the Administration
makes progress toward the objectives and meets other trade
While the final scope of TiSA has yet to be determined, key
promotion authority (TPA) requirements, Congress could
provisions and areas of disagreement have emerged.
potentially consider legislation to approve and implement a
Disciplines and Rules. Some rules, such as non-
future TiSA under expedited legislative procedures if the
discrimination among TiSA partners, would be in the core
parties reach a final agreement while the current TPA is in
text and apply across the agreement, while others would be
effect. The Trump Administration has not stated a formal
sector-specific. Transparency provisions are in a separate
position on TiSA.
annex and are said to be similar to those in the U.S.-South
Services in the Economy
Korea Free Trade Agreement, including requirements to
publish current and proposed regulations and provide a
“Services” refers to a growing range of economic activities,
period for public comment.
such as audiovisual; construction; computer and related
services; energy; express delivery; e-commerce; financial;
Unlike the GATS, which requires WTO members to apply
accounting and legal services; retail and wholesaling;
terms to all its preferential trade partners, benefits of the
transportation; telecommunications; and travel. A key part
commitments made by the participants in the TiSA would
of the U.S. economy, services now account for 78% of U.S.
apply to only those countries that have signed on to the
private sector gross domestic product (GDP) and 82% of
agreement. The parties may include the option for each
U.S. private sector jobs.
TiSA participant to automatically extend to all TiSA
participants the same benefits that it grants to other
Services are an important and growing part of U.S. trade
countries in future free trade deals it may enter. While the
flows and global trade in general, accounting for $1,257
United States supports the provision, others do not.
billion of U.S. total cross-border trade in 2016. According
to the WTO, the United States is the world’s single largest
The section on domestic regulations would establish rules
exporter of services (14.5% of the global trade in 2015) and
related to the licensing and qualification requirements for
the largest importer (10.2% of the global trade in 2015).
professional services set by each party.
Services are 34% of U.S. exports but, unlike trade in goods,
Rules on the movement of foreign nationals aim to facilitate
every year the United States exports more services than it
people providing services through temporary entry for
business purposes. As this has been politically sensitive, the
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Trade in Services Agreement (TiSA) Negotiations
United States may make a limited offer in TiSA and not
prevent fraud and deception; or to protect individual
include special visas or quotas.
privacy. In contrast to the United States, the EU and some
other parties seek to exempt yet-to-be-defined “new
Market Access. Commitments to provide market access are
services.”
being negotiated under a positive list: each party identifies
individual sectors to be opened, but may identify carve-outs
Figure 2. Total U.S. Cross-Border Trade in Goods and
or reservations within those sectors. National treatment
Services
obligations, to treat foreign and domestic service providers
equally, are negotiated under a more comprehensive
negative list: obligations apply to all categories of the
liberalized sectors listed in the agreement, unless a party
specifies exceptions.
Government Procurement. TiSA participants are
discussing whether to include disciplines on government
procurement to complement the WTO Agreement on
Government Procurement (GPA). Most TiSA participants,
including the United States and EU, are active or observer
parties to GPA.
Potential Sectors. The list of sectors to be included in

TiSA as annexes is not final; many are considered sensitive
Source: Analysis by CRS of U.S. Bureau of Economic Analysis data.
or controversial amongst and within negotiating parties.
What are supporting views? Many in the business
Audiovisual and Express Delivery. Given the
community support TiSA as an opportunity to increase
competitiveness of U.S. industry in these sectors, the
consistency and predictability among trading partners, to
United States supports their inclusion. Some other countries
eliminate trade barriers, and to strengthen and update multi-
have traditionally opposed including either one.
lateral rules on trade in services beyond the WTO GATS.
E-commerce/Digital Trade. Participants aim to establish
What are opposing views? Opponents of trade in services
clear rules and disciplines, while drafting the agreement
liberalization, including some labor unions and civil society
broadly enough to capture technological change. TiSA
groups, are concerned about the potential impact of TiSA
would likely address trade barriers such as localization
on the authority of national, state, and local governments to
requirements, consumer online protection, interoperability,
regulate services.
and international regulatory cooperation, among other
What is the current status? 21 rounds of TiSA
provisions. Digital trade and cross-border data flows impact
negotiations occurred 2013 through 2016. Parties cancelled
business opportunities for a broad range of industries,
the December 2016 ministerial meeting, and no
including transportation. One potential obstacle is the EU’s
negotiations have been scheduled for 2017. The Trump
reluctance to discuss cross-border data flows, a key U.S.
Administration has not stated an official position on TiSA.
negotiating objective, under TiSA.
In response to questions on TiSA from his Senate Finance
confirmation hearing, U.S. Trade Representative Robert
Financial Services. TiSA would likely build on the
Lighthizer wrote, “Maintaining a vibrant U.S. services
commitments in the GATS financial services annex. The
sector and expanding U.S. services exports is vital to a
United States aims to include provisions on cross-border
healthy economy and a key objective of U.S. trade policy.
data flows and localization requirements. The annex would
If confirmed, I look forward to working with you to pursue
potentially benefit from other TiSA provisions, like
our services trade priorities.”
transparency.
Issues for Congress
Professional Services. TiSA would likely not require
As part of its oversight of trade negotiations, Congress may
explicit mutual recognition agreements (MRAs), but may
monitor progress on the TiSA negotiations. Congress could
facilitate the process for interested parties in recognizing
examine the economic implications of a potential TiSA;
foreign professionals and expedite their licensing.
compare the TiSA provisions with the priorities established
Maritime Services. While many would like to include these,
in TPA and with U.S. free trade agreements; or consider
the United States and some other parties likely would
whether TiSA should include other parties with large, fast-
oppose it. A U.S. market access offer has not included this
growing service sectors, such as Brazil, China, and India.
sector or would be limited to those port services, as allowed
For more information see CRS Report R43291, U.S. Trade
under existing U.S. law.
in Services: Trends and Policy Issues, by Rachel F. Fefer,
Telecommunications. TiSA would likely build on the GATS
and CRS Report R44354, Trade in Services Agreement
telecommunications annex and commitments made by
(TiSA) Negotiations: Overview and Issues for Congress, by
parties to facilitate trade and open markets to competition.
Rachel F. Fefer.
Exceptions. Like GATS, TiSA would not apply to “services
Rachel F. Fefer, Analyst in International Trade and
supplied in the exercise of governmental authority.” TiSA
Finance
would not constrain a government from taking measures for
prudential reasons; to protect national security or maintain
IF10311
public order; to protect human, animal, or plant health; to
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Trade in Services Agreement (TiSA) Negotiations

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