The devil’s in the (de)regulation

Trade agreements these days tend to devote more space to smoothing out barriers to trade posed by countries’ domestic regulatory frameworks than on reducing tariffs or abolishing the more traditional, at-the-border trade barriers such as quotas. The “barriers” to cross-border trade in services include regulations like foreign ownership restrictions, licensing requirements, environmental, labour or quality standards, financial regulations or universal service obligations.

Many civil society groups in Mauritius were worried that liberalization would undermine public services, such as provision of drinking water. The government rightly responded that the Mauritian services market is already liberalized. The article unpacks these arguments and describes how it is less the proposed liberalization aspects of TiSA that give cause for concern than its deregulatory aspects. A related risk for the Mauritian government’s ability to continue to fulfil its right to water obligations lies in the lack of clear understanding of the scope of standard public services-related legal exceptions in trade in services instruments.

The article recalls that what TiSA refers to as the right to regulate is in fact a duty to regulate under human rights law. Human rights is neutral with respect to political or economic models, but clearly affirms that the State is the primary duty bearers and remains responsible for effective regulation of private actors.

The deregulatory aspects of the TiSA Agreement are now being negotiated in the World Trade Organization and other international trade fora. As these could limit governments’ ability to regulate in the public interest in the future, the article’s analysis and recommendations have ongoing relevance.