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Trade in Services Agreement

forestry, fishing, mining, utilities,” “public administration services and other services provided to
a community as a whole, compulsory social security services, and “other services.”
5
The rules constraining government regulations in commitments on “National Treatment,”
“Market Access,” and “Most Favored Nation obligations incorporate sweeping restrictions on
the capacity of democratic governments to protect the environment. Article (3) of the Annex
dealing with scheduling of National Treatment commitments for Environmental Services
provides that: “With respect to measures affecting trade in services as defined in Article I-1(2)
(a) through (c), no Party may set out a condition or qualification affecting the supply of an
environmental service in Section A of Part 1 of its Schedule.” In other words, the National
Treatment rule prohibits discrimination in favor of domestic suppliers of services, even if there is
an unintentional change in the conditions of competition that does not formally discriminate. Nor
may there be a local preference necessary to meet important environmental or climate policy
goals. For example, preferences may not be given to local suppliers of clean energy services in
order to assist in the local transition from a carbon-based economy to one based on renewables.
6
Article (4)(b) of the Annex on Scheduling of Market Access Commitments for Environmental
Services provides that: Any terms, limitations and conditions on market access affecting the
supply of environmental services shall be those measures that a Party maintains on the date this
Agreement takes effect, or the continuation or prompt renewal of any such measures.” In other
words, this is a “standstill” provision that is likely to preclude or inhibit future environmental
initiatives. More generally, Market Access rules prohibit quantitative limits on service suppliers
such as monopolies and limits on the number of suppliers of the volume of service.
Article (6) of the Annex on Most-Favored-Nation Treatment Exemptions for Environmental
Services provides that: With respect to measures affecting trade in services as defined in Article
I-1(2) (a) through (d), no Party may take an exemption to Article [X] (Most-Favoured-Nation
Treatment) for the supply of each environmental service classified under CPC Prov. 94.”
Although the parties to the TiSA negotiations have not yet agreed on final language for the
“Most Favored Nation”rule, MFN provisions generally provide that countries cannot normally
discriminate between their trading partners. Granting favorable treatment to one country requires
as a general matter that the same favorable treatment must be provided to other countries, thus
lowering regulation and access to the lowest common denominator.
The exception to protect governments right to regulate the supply of environmental services is
largely toothless. Article (2) of the leaked Annex on Environmental Services on the Right to
Regulate provides that: Parties recognize the right to regulate, and to introduce new regulations,
on the supply of environmental services within their territories in order to meet public policy
5
UN Central Product Classification http://unstats.un.org/unsd/cr/registry/regcst.asp?Cl=25; See generally, World
Trade Organization, Guide to reading the GATS schedules of specific commitments and the list of article II (MFN)
exemptions. https://www.wto.org/english/tratop_e/serv_e/guide1_e.htm
6
This hypothetical reflects the facts, but not the trade law issues raised in the notorious WTO case related to the
Ontario feed-in tariff to promote renewable energy. See, International Centre for Trade and Sustainable
Development, WTO Appellate Body rules against Canada in renewable energy case, 27 May 2013.
http://www.ictsd.org/bridges-news/biores/news/wto-appellate-body-rules-against-canada-in-renewable-energy-case-
0

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