In the globalised economy of today, services account for two-thirds of world output and employment, 60 percent of world FDI flows, and nearly half of world trade as measured on a value-added basis.
Despite its growing importance in the world economy, nothing substantively has happened on services in the WTO since the launch of the Doha Round. There has been no progress on disciplines and no new multilaterally agreed market access. None of the “unfinished business” has been completed with regard to services disciplines (domestic regulation, subsidies, safeguards, and government procurement) and no new disciplines relevant to current concerns about services trade have been proposed to update the GATS (data flows and forced localisation, local content requirements, electronic commerce/digital trade and state-owned enterprises, among others). Many new services, such as express delivery, energy or environmental services are either not covered or very inadequately covered by the classification system used for GATS commitments, which has not been updated since 1991. Effectively, negotiations related to services have been frozen in the WTO and there seems to be no willingness to make any forward movement.
In light of this stalemate, 50 economies came together in 2012 to negotiate a plurilateral services agreement called the Trade in Services Agreement (TISA). Negotiations on the TiSA began in early 2013, with 16 negotiating sessions already having taken place. The TiSA Agreement is projected to be concluded by end 2016. Several mega-regional initiatives for trade agreements covering services have either been concluded recently (the TPP or Trans-Pacific Partnership Agreement) or are underway, such as the TTIP (Trans-Atlantic Trade and Investment Partnership) or the RCEP (Regional Comprehensive Economic Partnership). The latter two initiatives should be finalised shortly as well, projected by end 2016 or mid-2017. In addition, preferential trade agreements and investment treaties covering new rules and negotiating approaches on services trade and investment in services have proliferated. The resulting systemic implications of such important agreements bring about updated and deeper rules on services together with new services liberalization for service governance frameworks and for the multilateral trading system will be considerable.
Against this backdrop, the E15 Expert Group on Services has engaged in critical analysis on issues relating to a deeper and more comprehensive regime for services in the global economy. The experts explored new thinking and put forward fresh ideas on opportunities for reform and reinvigoration of international services regimes, developing a set of solutions and proposals on how international cooperation through the WTO and other mechanisms for integration will promote the contribution of services to sustainability, growth and development.