Uruguay Says Goodbye to TiSA

By Pittaluga Abogados

Up until a few weeks ago, Uruguay was debating whether or not to become a Party to the Trade in Services Agreement (TiSA) that is being negotiated at the World Trade Organization (WTO) in Geneva. But, after long deliberations, President Tabaré Vázquez finally announced that the country would be withdrawing from this international treaty.

As alternatives to the TiSA, the government plans to pursue free trade agreements (FTAs), as “countries with FTAs are not subject to tariff preferences, their products can be imported without tariffs, and they compete with us, which is why we think that a strategy that seeks FTAs with the European Union (EU), China, and other countries is important. Ahead of the December Doha Round in Nairobi, we are working to see what we can do toward integration and to secure advantages,” Uruguay’s Foreign Affairs Minister Rodolfo Nin Novoa said.

The TiSA, formed by Australia, Canada, Colombia, Costa Rica, Chile, Hong Kong, Iceland, Israel, Japan, Liechtenstein, Mexico, New Zealand, Norway, Pakistan, Panama, Paraguay, Peru, South Korea, Switzerland, Taiwan, Turkey, the United States, and the European Union and all its member States, is aimed at boosting business opportunities in corporate, communications, distribution, education, environmental, financial, social, tourism, entertainment, transportation, health, and construction and related engineering services.

Not Everyone Agrees

At a conference organized by ORT University’s National Academy of Economics on the subject “Uruguay: Challenges for 2015-2020,” economist Gabriel Oddone, of CPA Ferrere, and Carlos Pérez del Castillo, undersecretary and advisor to the Foreign Affairs Ministry, gave their opinions on the government’s withdrawal from TiSA.

“The Executive Branch’s decision is a critical strategic mistake. Uruguayans have not discussed this matter thoroughly. In trade in services, Uruguay is more like the countries that are negotiating their entrance to TiSA than those that are staying out,” Oddone said.

For his part, Pérez del Castillo believes that once the countries that are negotiating the TiSA —which account for more than 70% of global trade in services— come to an agreement, they are going to try to “multilaterize it” under the WTO with the countries not included in the agreement.

Uruguay, where services represent more than 67% of GDP and 79% of employment, pay US$ 600 million a year in tariffs to place its products in other markets.