(TISA)

1. MINISTRY OF FOREIGN AFFAIRS, REGIONAL INTEGRATION AND INTERNATIONAL TRADECONSULTATIVE WORKSHOP ON TRADE IN SERVICES AGREEMENT (TISA) HENNESSY PARK HOTEL, EBENE15thNOVEMBER 2016

2. (TISA) Mr. N. Boodhoo Director Trade Policy 15 November 2016

3. Trade in Services • Importance of trade in services in today’s world • World exports in services : $ 875 billion (2015) • Link between trade in services and trade in goods • A more efficient trade in services leads to enhanced trade in goods • Mauritius is becoming an essentially services driven economy with export of services overtaking exports of goods. Services in Mauritius constitutes 70 percent of GDP

4. Export and Import of Services Trade

5. Mauritius’ Exports And Imports Of Trade In Services (2005 - 2014) (Rs Million)

6. Mauritius Export & Import of services Rs Millions

7. What is TISA? • With the services negotiations at the WTO stalled, a group of 23 like minded countries decided to move forward and negotiate an agreement on trade in services. The negotiations started in 2013. • TISA members hope that they will make better progress in liberalizing trade in services between each other than within the ambit of the WTO. Together they account for about 70% of world trade in services

8. Objectives of TISA • To remove bottlenecks to trade in services, building upon what they already agreed to in the WTO's 1995 General Agreement on Trade in Services (GATS) – reduce/eliminate barriers to trade • creating new regulatory disciplines on trade in services • Open up the TISA to all WTO members

9. Why join TISA? • Covers a huge services market encompassing 70 percent of world services market. • TISA Parties comprise some 50 trillion of GDP, a market of 1.6 Billion people • TISA GDP per capita – USD 29,594 • TISA % of world GDP – 65% (2015) • Mauritius is becoming an essentially services driven economy with export of services overtaking exports of goods • Services constitutes 70 percent of GDP • To capture the huge export TISA market • Create a more conjunctive environment for FDI in the services sector in Mauritius • Promote cross border trade in services • Promote mode 4 and access of our professionals to the services market in TISA

10. Possibilities under TISA • Seek reciprocity for the autonomous liberalization of the services market in Mauritius • Seek access to the best FTA negotiated by the TISA Parties which constitutes the basis for the negotiations • Ensure consistency between TISA and negotiations and commitments by Mauritius at the Regional and Continental levels  • Develop Mauritius as a business platform for the region and position the country as a platform for trade and investment • remove bottlenecks to trade and investment on the basis of best practices and promote regulatory reform

11. Possibilities under TISA (Cont.) • Promote cooperation with the most important players in the services sector in the world • Improve the visibility of Mauritius as a player in the services sector on the world scene and market Mauritius as a services destination • Influence the negotiations process and be a rule setter rather that a rule taker, in view of the intended multilateralisation of a TISA.  • Contribute in injecting momentum in the Multilateral Trading System.

12. TISA Flexibilities • TISA does not remove the right of Parties to regulate trade in services. • It explicitly recognizes the right of the Parties to regulate (core text relating to DR) • Allows Parties to take policy space reservation. Market access offer of Mauritius carves out all public sectors such as health, education, transport, utilities, etc • Allows Parties to maintain limitations on market excess and national treatment • All sectors in the exercise of Government Authority are excluded from the Agreement • TISA contains provisions on general exceptions, security exceptions, exception for countries to take measures to promote health, environment, to maintain SOEs, to maintain Government monopolies and exclusive service suppliers.

13. TISA Negotiations

14. Tisa Structure • Annex on Delivery Services • Annex on Financial Services • Annex on Localisation • Annex on Professional Services • Annex on Transparency • Core text • Annexes • Annex on State-Owned enterprises • Annex on Movement of Natural persons • Annex on Domestic Regulation • Annex on Road Freight Transport and Related Logistics Services • Annex on International Maritime Transport Services and other Maritime Services • Annex on Air Transport Services • Annex on Telecommunications Services • Annex on Electronic Commerce • Market access offers of TISA parties • Institutional Issues

15. Contents of the TISA text • TISA text – sets out the basic principles and the various disciplines that would govern trade in the services sector. • Based on an existing international agreement, the General Agreement on Trade in Services (GATS) • It contains provisions relating to • Annexes to the framework agreement – to define the scope of each of the sectors and list conditions for market entry. • Non-discriminatory principles e.g. MFN, National Treatment • Market access • Transparency • Domestic Regulations • General exceptions • Security Exceptions • Treatment of monopolies and exclusive service suppliers

16. What is new in TISA? • Many more sectoral Annexes compared to GATS • Provision to address sensitivities in the ‘policy space reservation’ of the horizontal section • Annex on localisation - to minimise local requirements imposed on foreign service suppliers • such as the requirement to source goods locally or to have a physical presence even in the case of cross border supply of goods

17. TISA market access features • Policy space reservation – “Section A” of market access offer – not subject to liberalisation. Flexibility for TISA parties to cater for domestic sensitivities such as -Public Health-Public Education-Public Housing-Public Transport-Public Utilities-Public Postal Services -Social Security- Public Safety (Public law enforcement) • “Section B” reservations – subject to standstill and ratchet. • Standstill obligation - establishes the liberalisation level existing at the time the agreement has been concluded. • Ratchet clause - any liberalisation steps that take place following conclusion of the agreement are not reversible.

18. What does TISA not cover? • air traffic rights - the rules on where and how airlines can carry passengers and freight between countries • services only governments provide, such as justice, policing or defence. • TISA does not change other rules to: • protect people's health and safety (such as public healthcare, public utilities and law and order) or the environment • minimum qualifications for people wishing to supply a particular service

19. Article I-9 : General Exceptions • General Exceptions’ as follows: • “........ nothing in this Agreement shall be construed to prevent the adoption or enforcement by any Party of measures: • (a) necessary to protect public morals or to maintain public order; • (b) necessary to protect human, animal or plant life or health; • (c) necessary to secure compliance with laws or regulations which are not inconsistent with the provisions of this Agreement including those relating to: • (i) the prevention of deceptive and fraudulent practices or to deal with the effects of a default on services contracts; • (ii) the protection of the privacy of individuals in relation to the processing and dissemination of personal data and the protection of confidentiality of individual records and accounts; • (iii) safety;”

20. Article I-10 : Security Exceptions • “Nothing in this Agreement shall be construed: • (a) to require any Party to furnish any information, the disclosure of which it considers contrary to its essential security interests; or • (b) to prevent any Party from taking any action which it considers necessary for the protection of its essential security interests: • (i) relating to the supply of services as carried out directly or indirectly for the purpose of provisioning a military establishment; • (ii) relating to fissionable and fusionable materials or the materials from which they are derived; • (iii) taken in time of war or other emergency in international relations; or • (c) to prevent any Party from taking any action in pursuance of its obligations under the United Nations Charter for the maintenance of international peace and security.” • The public order exception may be invoked only where a genuine and sufficiently serious threat is posed to one of the fundamental interests of society.

21. Salient features of some of the Annexes • Annex on Financial Services • Annex on Telecommunications Services • Annex on Movement of Natural Persons • Annex on Maritime Transport • Annex on Professional Services • Annex on Energy related services • Annex on Localisation

22. Annex on financial services • Applies to measures affecting the supply of financial services • Major provisions covered: • National Treatment • MFN • New financial services • Self-regulatory organisation • Transparency • Prudential measures • Recognition • Dispute settlement

23. Issues with the Annex on Financial Services • Each Party shall permit financial service suppliers of any other Party established in its territory to supply any new financial service that the Party would permit its own like financial services supplier to supply[CL/NZ/HK/CH propose; within the scope of the subsectors and financial services committed in its Schedule and subject to the terms, limitations, conditions and qualifications established in that Schedule] without adopting a law or modifying an existing law.Notwithstanding (Market Access, paragraph on juridical form), a Party may determine the institutional and juridical form through which the service may be supplied and may require authorisation for the supply of the service. Where such authorisation is required, a decision shall be made within a reasonable time and the authorisation may be refused only for prudential reasons. • Concern: obligation to allow interested service suppliers to provide the service in any of the other Parties even if it is a new financial service for them. What will be the regulatory implications for Mauritius? • This issue has already been agreed upon by the Parties • Annex encourages no commercial presence for insurance sector Mode 1 – Mauritius Insurance Act stipulates need for commercial presence

24. Annex on Telecommunications sector • Outlines conditions for scheduling, scope and coverage of telecommunications services • Calls for : • Elimination of Joint Venture Requirement • sectors to be opened to foreign service suppliers across all the modes of supply • Discussions focused on: • interpretation of the notion of "public communication • interpretation of the notion of "public communication services" (what type of operators can be regarded as telecommunications service) • ‘access to essential facilities’. • discussing access to "essential facilities" (to what extent and under what conditions can new market entrants use infrastructure

25. Annex on Movement of natural persons Mode 4 • Covers measures affecting natural persons (service suppliers of a Party), and natural persons of a Party employed by a service supplier of a Party • Does not apply to: • natural persons seeking access to the employment market of a Party • measures regarding citizenship, residence or employment on a permanent basis

26. Issues with Annex on Movement of natural persons mode 4 • Best endeavour language – may not bind the Parties to take commitments in this area • Parties to take commitments on mode 4. However, there is no compulsion on them to do so. • Annex: any person (of a TISA party) who has been refused a visa may make an appeal. • “to the extent possible” to allow reasonable time between the publication of a measure and its entry into force – Mauritius Finance Act measures enter into force on the day of gazetting

27. Annex on maritime transport • Covers guidelines for commitments to allow cross-border supply of international maritime services. • Provides for: • access to and use of ports • domestic regulations • entry and transit of seafarers • repositioning of transport equipment etc. • Member States shall not be required to take commitment in services falling under cabotage. • Definition of cabotage and feeder vessels • Mauritius will not take commitments in cargo handling services

28. Annex on Professional Services • Covers measures affecting trade in professional services such as architecture, legal services, engineering, urban planning, accounting and auditing amongst others. • Subject to terms, limitations, conditions in the schedule: • No limitations on foreign shareholdings for Mode 3 • No Joint venture requirements as a condition for the supply of a professional service • Encouraging Recognition of other parties’ professional qualifications, and facilitating licensing and/or registration procedures.

29. Annex on localisation • New area for negotiation in an agreement • Guide parties on local presence, local management and board of director, local content, local technology. • Not an obligation for commercial presence for service provided through cross border supply. • No obligation for service suppliers to source out goods locally if they have a commercial presence in another Party • No obligation to transfer specific technology as a condition to supply a service • Mauritius - TISA should encourage and promote the transfer of technology, skills and know-how among the Parties • Footnote included

30. Institutional issues • Accession • Multilateralisation • Dispute Settlement

31. MARKET ACCESS COMPONENT

32. Schedules of specific commitments • Liberalisation of trade in services is tabled through schedules of commitments that contain all conditions and requirements that other members need to be compliant with to provide a service in a country

33. Cross-border supply is defined to cover services flows from the territory of one Member into the territory of another Member (e.g. banking or architectural services transmitted via telecommunications or mail);

34. Consumption abroad refers to situations where a service consumer (e.g. tourist or patient) moves into another Member's territory to obtain a service;

35. Commercial presence implies that a service supplier of one Member establishes a territorial presence, including through ownership or lease of premises, in another Member's territory to provide a service (e.g. domestic subsidiaries of foreign insurance companies or hotel chains)

36. Presence of natural persons consists of persons of one Member entering the territory of another Member to supply a service (e.g. accountants, doctors or teachers). The Annex on Movement of Natural Persons specifies, however, that Members remain free to operate measures regarding citizenship, residence or access to the employment market on a permanent basis.

37. How are schedules of commitments structured? • Full commitment: - sector is fully liberalised. Entered as ‘NONE’ in the schedule • No commitment: - free to introduce or maintain measures inconsistent with market access or national treatment. Entered as ‘UNBOUND’ • Commitment with limitations: - take certain limitations, recorded as ‘NONE EXCEPT ….’

38. Limitations on Market access and national treatment

39. How are schedules of commitments structured?

40. Horizontal Commitments • Applies to trade in services in all scheduled services sectors unless otherwise specified. • May contain limitations and maintain certain sectors exclusively reserved for local service suppliers. • Reservations on measures government may take in future to support local service suppliers, especially in new sectors of activities.

41. Horizontal Commitments • The initial offer may be revised, supplemented or withdrawn partially or in toto, depending on the progress made in and on the outcome of the negotiations • Mauritius has indicated that it reserves the right to: • take commitments in air access rights • take measures necessary to build the capacity of local small scale service providers • provide preferential treatment to small scale local service providers in relation to procurement. • regulate new sectors of activities or new subsectors • take measures, fiscal or otherwise to promote the development of local service suppliers • Requirement for movement of persons - sharing of knowledge and experience, skill building and with Mauritian professionals and the building of their skills and know-how • principle of reciprocity and a fair balance of market openness relative to its offers

42. Horizontal commitment – limitations examples

43. Mauritius market access offer • Covers removal of restrictions (elimination of barriers) on the four modes of supply that govern trade in the services • Drafted after consultations with relevant stakeholders from all services sectors concerned • Main sectors scheduled include: • financial services • banking • Professional services • communications • environmental • transport • computer related • social services • tourism • energy services and • research and development

44. Domestic Consultations • To elaborate Mauritius position on TISA • Extensive sectoral meetings held since Mauritius joined the TISA negotiations to brainstorm on the Annexes and the Mauritius offer • Consultations to be pursued till the negotiations are completed and the Agreement signed

45. List of Stakeholders

46. List of Stakeholders

47. Mauritius market access offer • Fairly opened - professional services (except for architectural and engineering services), banking, research and development • Fully liberalised - Communications services and energy-related services except for compliance with local regulations • Limitations on financial services sector, health services, tourism sector (mode 3 limitations mostly) • NO commitments in air access rights (however, computer reservation, maintenance/repair of aircraft are fully liberalised)

48. Carve Outs • Complete carve out of all public services • Possibility to take measures to address balance of payment problems • Possibility to renegotiate schedule

49. Status of Negotiations • Annexes on Telecom, E-Commerce and Financial Services still bracketed • Good progress on other Annexes, although some issues still remain such as • EU position on Mode 4 to conclude Protocol on readmission • Application of localisation to financial services • Ministerial meeting: 4-5 December 2016 • If completed, legal scrubbing • Thereafter, signature and ratification

50. Thank You