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Statement on TiSA Ministers Meeting

January 22, 2016

Davos, Switzerland -- A group of ministers from Trade in Services Agreement (TiSA) participants met informally in Davos, Switzerland today where they discussed progress in negotiations and reaffirmed their commitment to conclude an ambitious agreement this year. 

Launched in 2013, twenty-three parties are negotiating TISA, an agreement that will encompass state-of-the-art rules to promote fair and open trade across the full spectrum of service sectors – from telecommunications and technology to distribution and delivery services.

"The negotiations to conclude a Trade in Services Agreement have accelerated over the past several months and I'm pleased we had an opportunity to support further progress today,” said U.S. Trade Representative Michael Froman. “All participants are motivated because they recognize the potential of a high-quality services agreement to support jobs."

The United States – a founding co-chair of the negotiations together with Australia and the European Union (EU) – is pursuing this agreement for three fundamental reasons:

  • The services industry is vital to the U.S. economy.  Services industries account for three-quarters of private industries U.S. GDP, 4 out of 5 jobs in the United States, and about 30 percent of U.S. exports.  The United States has run surpluses of more than $200 billion in services trade each of the last three years.  And because every $1 billion in U.S. services exports supports an estimated 7,000 jobs, expanding services trade globally will unlock new opportunities for Americans and support additional jobs at home.
     
  • U.S. service suppliers must be given a level playing field in the global marketplace.  The United States has one of the most open services sectors in the world – we want to make sure U.S. suppliers have the same access abroad that others already enjoy in the United States.  TiSA will help guarantee that our suppliers can compete on the basis of quality and competence rather than nationality.
     
  • New technologies and changes to the way we trade require us to inject new disciplines into the global trading system, particularly with respect to services.  TiSA is taking on new issues confronting the global marketplace, for example restrictions on cross-border data flows and server localization requirements that can disrupt the supply of services over the Internet; forced transfers of technology; restrictions on the ability to make payments electronically; and certain unfair advantages that other governments provide to their state-owned enterprises.

The United States is pursuing these objectives in TiSA while ensuring that our ability to adopt or maintain regulations to protect important public interest objectives – such as the protection of health, safety, and the environment – is unimpeded. Nothing in TiSA will require the United States or other participants to privatize any service. Nor will TiSA prevent governments from expanding the range of services they supply to the public, including services that may have been privatized previously.

 

Background

Twenty-three participants are presently participating in TiSA negotiations, representing nearly 70 percent of the world’s $55 trillion services market in 2014.  Current participants are:  Australia, Canada, Chile, Chinese Taipei, Colombia, Costa Rica, European Union (28 Member States), Hong Kong China, Iceland, Israel, Japan, Korea, Liechtenstein, Mauritius, Mexico, New Zealand, Norway, Pakistan, Panama, Peru, Switzerland, Turkey, and the United States.

TiSA draws its core obligations from the 1994 General Agreement on Trade in Services (GATS) and will include market-opening commitments that parties provide to each other as well as additional commitments in service-specific chapters.  Key chapters include financial services, electronic commerce, telecommunications, localization, domestic regulations and transparency.

In 2014, the United States exported more than $710 billion in cross-border services, supporting 4.5 million U.S. jobs and resulting in a $233 billion trade surplus in services.  Leading U.S. service exports included:

  • Travel ($177 billion)
     
  • Charges for the use of Intellectual Property ($130 billion) -Transportation Services ($90 billion) -Financial Services ($87 billion) -Telecommunication, Computer and other IT Services ($36 billion) -Maintenance and Repair Services ($22 billion) -Insurance Services ($17 billion)
     
  • In addition, majority U.S.-owned affiliates in foreign countries provided over $1.3 trillion in services in 2013 (latest data available), including $559 billion in the European Union.  The largest sales of services by majority U.S.-owned affiliates include:
  • Wholesale trade ($241 billion)
     
  • Finance and Insurance ($221 billion)
     
  • Professional, scientific and Technical Services ($197 billion)
     
  • Information Services (including publishing, motion pictures and sound recording, telecom, broadcasting, and data processing, hosting services) ($181 billion)
     
  • Retail Trade ($105 billion)
     
  • Real Estate and Rental Services ($45 billion)