Trade in Services Agreement in the United States

Launched in April 2013, the Trade in Services Agreement (TiSA) is a trade initiative focused exclusively on service industries. Drawing on best practices from around the world, Trade in Services Agreement will encompass state-of-the-art trade rules aimed at promoting fair and open trade across the full spectrum of service sectors – from telecommunications and technology to distribution and delivery services. Trade in Services Agreement will also take on new issues confronting the global marketplace, like restrictions on cross-border data flows that can disrupt the supply of services over the Internet – a rapidly expanding market for U.S. small businesses and entrepreneurs. And Trade in Services Agreement will support the development of strong, transparent, and effective regulatory policies, which are so important to enabling international commerce.

Twenty-three economies are presently participating in TiSA, representing nearly 70 percent of the world’s $55 trillion services market. Trade in Services Agreement is part of the Obama Administration’s ongoing effort to create economic opportunity for U.S. workers and businesses by expanding trade opportunities. Further opening services trade will help grow U.S. services exports and support more American jobs in a sector where we are the world’s leader.

Services account for three-quarters of U.S. GDP and 4 out of 5 jobs in the United States. Thanks to our vibrant and open domestic market, the United States is highly competitive in services trade, routinely recording a surplus on the order of $200 billion per year. With every $1 billion in U.S. services exports supporting an estimated 7,300 jobs, expanding services trade globally will unlock new opportunities for Americans.

Readout of Trade in Services Agreement (TISA) negotiations

Negotiators on the Trade in Services Agreement have concluded this week’s meetings in Geneva, Switzerland. The fourth round of TISA talks was positive and productive, with participants expecting to table offers by the end of this month. Additionally, the draft text of the agreement was further stabilized with the removal of all brackets concerning the “negative list” approach.

U.S. negotiators look forward to further work on this important agreement.

Every $1 billion in U.S. services exports supports more than 4,000 American jobs. Service industries employ workers across the United States – approximately three out of every four American workers nationwide. If business services were to achieve the same export potential as manufactured goods globally, U.S. exports could increase by as much as $800 billion.

EU-US Joint Statement on Public Services

Brussels, Belgium – Ambassador Froman and Commissioner Malmström discussed the important role public services play in the United States and the European Union.

They confirmed that U.S. and EU trade agreements do not prevent governments, at any level, from providing or supporting services in areas such as water, education, health, and social services.

Furthermore, no EU or U.S. trade agreement requires governments to privatize any service, or prevents governments from expanding the range of services they supply to the public. Moreover, these agreements do not prevent governments from providing public services previously supplied by private service suppliers; contracting a public service to private providers does not mean that it becomes irreversibly part of the commercial sector.

Ambassador Froman and Commissioner Malmström also noted the important complementary role of the private sector in these areas. Private sector activities can improve the availability and diversity of services, to the benefit of people in the United States and the European Union. Defining the appropriate balance between public and private services is up to the discretion of each government.

Finally, Ambassador Froman and Commissioner Malmström also confirmed that EU and US trade agreements do not impede governments’ ability to adopt or maintain regulations to ensure the high quality of services and to protect important public interest objectives, such as the protection of health, safety, or the environment.

The United States and the European Union are following this same approach in TTIP and TiSA.

Statement on TiSA Ministers Meeting

A group of ministers from Trade in Services Agreement (TiSA) participants met informally in Davos, Switzerland in January 2016 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)