Trade in Services Agreement (TiSA) Services and Investment Unit, Trade Negotiations Division Ministry of Foreign Affairs and Trade

Trade in Services Agreement (TiSA) Services and Investment Unit, Trade Negotiations Division Ministry of Foreign Affairs and Trade

MFAT Services and Investment Unit Carriage of WTO services policy and negotiations Negotiate services, investment and temporary entry chapters of FTAs Provide advice on: FTA implementation Existing trade obligations Domestic law reforms International cooperation in other fora (e.g. OECD, APEC)

TiSA overview

Services-only trade agreement 23 participants, including EU 70% of global trade in services

Commercial interest Size and significance of the players $13 billion in exports Policy interest Issues under negotiation include NZ priorities at the WTO Objectives Why is New Zealand involved? Capture FTA practice and domestic reforms improve access guarantees for NZ exporters Bring progress back to the WTO

Timing April First formal negotiating round February Market access negotiations begin September Paraguay, Uruguay leave May Revised market access offers exchanged July Next negotiating round. At least two more in 2016 2013 2014 2015 2016 June Liechtenstein joins February Uruguay joins October Mauritius joins January TiSAMinisters / representatives meet in Davos June TiSAMinisters / representatives meet in Paris

Issues under discussion Existing WTO rules (General Agreement on Trade in Services, GATS) Delivery services Direct selling services Domestic regulation Electronic commerce Energy-related services Environmental services Export subsidies Facilitation of Patient Mobility Financial Services Government Procurement Localisation Movement of Natural Persons Professional Services SOEs Telecommunications Transparency Transport services (air, maritime, road)

Issues TiSA will not cover Goods (including related obligations e.g. rules of origin, sanitary and phytosanitary measures, technical barriers to trade, trade remedies) Intellectual property rules Investor protections and investor-state dispute settlement

What an agreement could look like

Structure Part 1: WTO Part 2: How market access commitments are made Part 3: New rules 19 Proposals for Annexes Part 4: Institutional Mechanisms Part 5: Market Access Commitments 23 individual schedules

Part 1: WTO (GATS) Scope and definitions Core obligations Market access Non-discrimination ( national treatment and Most Favoured Nation treatment obligations) Exceptions

Part 2: Market access This Part outlines howmarket access commitments are made Positive list for market access Negative list for national treatment Standstill Ratchet Some supporting investment issues under discussion (for service providers who invest offshore)

Part 3: New rules 19 proposals not all will make it not all New Zealand supports Content drawn almost exclusively from WTO agenda and FTA practice NZ proposals Domestic Regulation (Licensing, qualification requirements) Air Transport Services

Part 4: Institutional mechanisms Five key elements: Entry into force Institutions Accession Dispute settlement Multilateralisation

Part 5: Individual schedules Where each TiSA participant sets out their market access commitments Exceptions

NZ s priorities in services negotiations

Public policy protections Public services excluded. Exceptions for: Services supplied in the exercise of governmental authority Government subsidies Other exceptions:health and public morals, taxation, prudential regulation, balance of payments, national security

Public policy protections Treaty of Waitangi NZ s market access offers: no commitments or further exceptions for a wide range of sensitive policy areas, including (there are many others): Social services (e.g. health, education, public housing) Gambling, distribution of alcohol and tobacco Water, conservation and protected areas, foreshore and seabed, and New Zealand s territorial waters Promotion of local content in broadcasting Ownership of SOEs Foreign investment screening

Domestic regulation Licensing, qualifications, technical standards Regulatory principles: transparent and objective regulation independent decisions not more burdensome than necessary avoid duplication Fair procedures and due process

Expanded coverage of air services WTO (GATS) covers: Aircraft repair and maintenance Selling and marketing of air transport services Computer reservation services NZ seeks to expand this to include: Ground handling services Airport operation services Specialty air services

Improved access to markets We focus on outcomes that help to: Export more services online (and other forms of cross-border trade). Improved market access also supported by commitments to support digital economy commerce Invest in international markets more easily Access business visas Some agreements help access government contracts

Improved access to markets Wide range of sectors that we focus on, including: Private education Professional services (e.g. engineering) ICT Environmental services Transport services and logistics Other services that support GVCs important to NZ goods exporters (e.g. food and beverage wholesale and retail trade)

Business feedback on barriers Private education: Prohibitions on delivering online content Restrictions on the ability to repatriate fees and profits back to NZ Requirements to partner with local providers Limitations on course content / number of programmes that can be provided Transport and logistics: foreign equity limits force NZ companies to establish joint ventures Project management and related ICT services: some exporters face requirements to store all data locally

Business feedback on barriers Commercial pilot training: requirements to be partnered locally in some markets IT payment processing systems: some exporters have encountered requirements to divulge source code Regular feedback on systemic challenges: Opaque regulatory processes Investment restrictions Accessing government contracts Visa access

What should NZ s negotiating priorities be? What should we be concerned about? If you are an exporter, what regulatory barriers are you facing in TiSA markets? Input via: Public feedback welcomed Written submissions to MFAT Meetings with MFAT Input welcomed any time to serviceexports@mfat.govt.nz Check www.mfat.govt.nz/tisa for further details