A Fair Competition Agreement

For more than three years now, many countries, covering 70% of the world's trade in services, have been holding talks on reaching a new Trade in Services Agreement (TISA).

Corina Cristea, 18.03.2016, 13:40

For more than three years now, many
countries, covering 70% of the world’s trade in services, have been holding
talks on reaching a new Trade in Services Agreement (TISA). Among the 23
participants in these discussions, the European Union is a unique entity. But
why is a fresh agreement needed? First, because some services, which appeared
and developed after the present agreement had come into effect back in 1994,
must be regulated. An example in this sense is the digital market. Another
reason is the ever-increasing importance of services as share of the GDP. According to World Bank indicators,
the value added by services to the global GDP kept growing at a steady pace,
from 53% in 1970 to 57% in 1990, from 67% in 2000 to 70% in 2011. Present talks
are aimed at setting a minimum group of demands for trade sectors, such as
financial services or transportation. In February this year, MEPs endorsed a
resolution under which the EU trade policies are to represent the interests of community
companies and consumers.

MEP Viviane Reding said after the vote
(quote):

I
am proud to have gathered wide support across the political spectrum. MEPs are
taking their responsibilities. We are sending a strong message to negotiators
about what TISA we want and what TISA we don’t want… We want better
international regulation, not lower domestic regulation. We want competition by
the rules, not for the rules. We want a level playing field, not a global
battlefield.

TISA
is an opportunity to shape globalisation, ensure more reciprocity in terms of
access to foreign markets and provide more rights to consumers. Yet our public
services must be unequivocally excluded, our right to regulate fully preserved,
and our fundamental rights and labour standards duly safeguarded. These
negotiations can and must be a safety net for our citizens at home and a
market-opener for our companies abroad. We
certainly do not want TiSA to undermine our public services, culture, labour
laws, environmental standards, consumer protection, data protection – in other
words the way we live in Europe.

In order to protect EU companies from unfair competition
abroad, the MEPs have authorised community negotiators to call for the
adjustment of third states’ practices against EU companies such as those
concerning mandatory data localisation or foreign equity caps. They also want
less bureaucracy for the SMEs and most importantly, reciprocity in the market,
particularly with regard to international public tenders, transport, financial
and digital services. At present, the EU service providers are more open to
foreign competition than their partners. Very clear rules are needed for
competition reasons, as MEP Norica Nicolai explained.

Norica Nicolai: A certain type of
protection is needed. We all know about the consequences of financial services
developed in the absence of regulations regarding crisis. There is also the
issue of lifting trade barriers with third countries. Also important are talks
on labour force, its domestic and external mobility. Sadly, a tendency of
limiting access to the labour market is being felt all over the union. The EU
is very much in favour of introducing the famous Gold-standard clause
concerning highly-skilled labour force. I believe the brain drain phenomenon is
still going on.

Figures
show that the EU is the world’s main exporter and importer of services. Is this
position threatened in a way or another?
MEP Norica Nicolai says no:

No,
this position is not under threat, at least for the time being. Negotiations,
which I see as pretty tough and very likely to last, are underway. But, with
the global economy in recession, many countries aren’t going to give up
protectionist measures meant to keep their growth and cut losses. As other services
develop due to technical breakthroughs, the EU services may run the risk of
being affected. But this is going to be short-lived, as we’ll have finished
these negotiations in 5-6 years, and we all know how long it takes to ratify an
agreement in the EU. I believe that around 2020 – 2025 we will be able to talk
about a general agreement concerning the service trade.

The
evolution of the Romanian economy’s structure in recent years indicates an
emerging economy that has passed through a period of overheating and is now
recovering, with a services sector still under the EU average, but also with a
structural change shifting from sectors with low added value, such as
agriculture, towards those of bigger added value. This is actually a positive
fact, which pundits believe it will have a great contribution to meeting
transition criteria towards the Eurozone.

According
to the latest Eurostat data, Romania registered the third largest economic
growth rate in the EU in the last quarter of last year, alongside Sweden, the
Czech Republic and Slovakia.