Services are an important part of New Zealand’s economy, accounting for two-thirds of economic activity and 70% of employment. Our service sector exports were worth over $20 billion in 2015.

World Trade Organization (WTO) members are bound by the rules of the General Agreement on Trade in Services (GATS), though new challenges and regulatory barriers to services trade have emerged since the GATS entered into force in 1995. The Trade in Services Agreement (TiSA) negotiation aims to update the rules to reflect this new trading landscape. It can be viewed as a major Free Trade Agreement for services only. It does not include trade in goods or other issues like intellectual property standards or investor-state dispute settlement.

More information on the GATS can be found here (external link).

Who is involved?

There are 23 participants in the TiSA negotiations, all members of the WTO: Australia, Canada, Chile, Colombia, Costa Rica, the European Union (representing the 28 EU countries), Hong Kong, Iceland, Israel, Japan, Korea, Liechtenstein, Mauritius, Mexico, New Zealand, Norway, Pakistan, Panama, Peru, the Separate Customs Territory of Taiwan, Penghu, Kinmen and Matsu (Chinese Taipei), Switzerland, Turkey, and the United States.
TiSA participants collectively account for 70% of global services trade.

Why it’s a priority for New Zealand

New Zealand business sell over $14 billion in services to TiSA markets each year (almost two-thirds of New Zealand’s total services exports). This includes New Zealand companies doing work for overseas clients and customers, and services sold in New Zealand to foreigners.

The TiSA grouping:

  • includes seven of New Zealand’s top ten services export markets;
  • is home to 16,000 international students studying in New Zealand; and
  • is the source of over two million international visitors (tourists and business visitors) to New Zealand each year.

By addressing regulatory barriers such as discriminatory laws and regulations, TiSA will support existing exports; create new business opportunities and certainty for New Zealand business; and help promote growing international demand for New Zealand expertise and innovation in environmental services, private education, aviation, IT, and a wide range professional services such as engineering, architecture and services associated with agriculture.  It also supports the Business Growth Agenda priorities of advancing free trade and increasing New Zealand’s exports from 30% to 40% of GDP by 2025.

Much of the subject matter being discussed in TiSA (below) reflects outcomes New Zealand has advocated for since the conclusion of the GATS agreement, including during the Doha Round of WTO negotiations.  In this way it is natural for New Zealand to be involved with TiSA, shaping outcomes in a way that reflects our commercial interests, while ensuring the fundamental right for the New Zealand government to regulate for legitimate public policy purposes is protected.

What are the potential benefits?

In simple terms, the TiSA negotiations are aimed at making it easier for New Zealand services exporters to do business in international markets.  The process is aimed at tackling barriers that:

  • restrict selling services online;
  • restrict investment in other countries by New Zealanders, including requiring joint ventures or imposing equity limits;
  • make it difficult and overly burdensome to obtain business licences;
  • mean that regulations, qualification and professional registration, and other processes are applied in a discriminatory way or are not transparent;
  • restrict the ability to transfer funds (capital, profits, payments etc) back to New Zealand;
  • impose overly burdensome employment restrictions on New Zealand businesses offshore (such limits on the ability to place New Zealand management or expertise in international
  • subsidiaries, or nationality and residency requirements for company directors)
  • limit access to visas for New Zealand business people.

What is being discussed?

The foundation of TiSA is the GATS. Parties have proposed a range of additional new rules, designed to build on the GATS. Almost all reflect long-standing discussions held at the WTO.

These additional proposals take the form of 19 annexes:

  • 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
  • State Owned Enterprises
  • Telecommunications
  • Transparency
  • Transport services (air, maritime, road)

Not all of these issues will necessarily be included in any final agreement. New Zealand supports some, but not all, proposals.

We are a co-proponent of the annexes relating to air transport services and domestic regulation.

In addition, Parties are negotiating market access commitments specific to each participant that will building on existing WTO guarantees.

Timing for the negotiations

Formal negotiations started in April 2013. There have been 21 rounds so far with the last round being in November 2016. It is unclear whether the negotiations will continue.