FTAA - Free Trade Area of the Americas
Draft Agreement
Chapter on Services
(Continuation)
[7.3. [In sectors where market access commitments are undertaken, the Parties cannot maintain or adopt either on the basis of a regional subdivision or on the basis of its entire territory, unless otherwise specified in its Schedule the following measures[, among
others]4:] [In sectors and modes of delivery to be liberalized pursuant to the decision in Article ( ), no Party may maintain or adopt any of the measures defined below:]
a)limitations on the number of service suppliers, whether in the form of numerical quotas, monopolies, exclusive service suppliers or the requirement of an economic needs test;
b) imitations on the [total] value of service assets or transactions in the form of numerical quotas or the requirement of an economic needs test;
c) limitations on the [total] number of service operations or on the [total] quantity of service output expressed in terms of designated numerical units in the form of quotas or the requirement of an economic needs test;
d) limitations on the [total] number of natural persons that may be employed in a particular service sector or that a service supplier may employ and who are necessary for, and directly related to, the supply of a specific service in the form of numerical quotas or the requirement of an economic needs test;
e) measures which restrict [or require] specific types of juridical persons or joint ventures through which a service supplier [of another Party] may supply a service; and
f) limitations on the participation of foreign capital in terms of maximum percentage limit on foreign share holding or the total value of individual or aggregate foreign investments.]
[7.4. The Committee on Services, at the request of any of the Parties, may order that sectoral studies be conducted for the purpose of defining those service sectors and sub-sectors which, by virtue of their characteristics and specificities, might be subject to a specific sectoral liberalization process.]
Market Access
[7.1. Each Party shall accord to the services and service suppliers of the other Parties, access to their markets, across all modes of supply established in the definition of trade in services in Article ( ) of this Chapter.]
[7.2. Developed countries shall facilitate the development and strengthening of services trade in smaller economies and developing countries, through,
inter alia:
a) providing increased access to technology to enhance efficiency and competitiveness (specifically in the area of services which has been revolutionized by the advent of the internet, e-commerce etc.)
b) improving access to distribution channels and information networks
c) liberalizing market access in sectors and modes of supply of interest to them (e.g. movement of natural persons).]
[7.3. Larger and more developed countries shall seek, through their national contact points, to facilitate the access of the service suppliers of smaller economies to information related to their respective markets, concerning:
a) commercial and technical aspects of the supply of services (particularly in newer areas)
b)
registration, recognition and obtaining of professional qualifications; and
c) the availability of services technology.]
[7.4. Special priority shall be given to the smaller economies of the hemisphere in the implementation of paragraphs 7.2 and 7.3. Particular account shall be taken of the serious difficulty of the smaller economies in fulfilling certain negotiated commitments in view of their specific vulnerabilities and their development, trade and national economic needs.]
Market Access
[Nondiscriminatory Quantitative Restrictions
7.1. No Party shall apply limitations on:
a) the number of service suppliers whether in the form of numerical quotas, monopolies, exclusive service suppliers or the requirements of an economic needs test.
b) the total value of service transactions or assets in the form of numerical quotas or the requirement of an economic needs test.
c) the total number of service operations or on the total quantity of services output expressed in terms of designated numerical units in the form of quotas or the requirement of an economic needs test.
d) the total number of natural persons that may be employed in a particular service sector or that a service supplier may employ and who are necessary for, and directly related to, the supply of a specific service in the form of a numerical quota or the requirement of an economic needs test.]
[Access and Use
7.2. Each Party shall ensure that the service supplier of any other Party is accorded access to and use of public telecommunications transport networks and services on reasonable and non-discriminatory terms and conditions, for the supply of a service to which a Party’s obligations under this Chapter apply.]
[No Local Presence5
7.3. No Party may require a service supplier of another Party to establish or maintain a representative office or any form of company, or to be resident, in its territory as a condition for the cross-border supply of a service.]
Market Access
[Non-Discriminatory Quantitative Restrictions]
[7.1. Each Party shall indicate [at the date of entry into force of this Agreement] in its non-discriminatory “Quantitative Restrictions” Annex any non-discriminatory quantitative restriction that it maintains at the national or federal and state or provincial levels.]
[7.2. Each Party shall notify the other Parties of any non-discriminatory quantitative restriction that it adopts[, other than at the local government or municipal level,] after the date of entry into force of this Agreement and shall set out the restriction in its Annex on Non-discriminatory Quantitative Restrictions.]
[7.3. The Parties shall endeavor periodically, but in any event at least every [two] years, to negotiate the liberalization of the non-discriminatory quantitative restrictions set out in the non-discriminatory “Quantitative Restrictions” annex pursuant to paragraphs 7.1 and 7.2.]
[7.3. The Parties shall periodically, at least every two years, endeavor to negotiate the liberalization or elimination of:
a) existing non-discriminatory quantitative restrictions that maintain:
at the national or federal and state or provincial levels, as set out in the Annex on Non- discriminatory Quantitative Restrictions; or
b) non-discriminatory quantitative restrictions adopted by a Party after the date this Agreement has entered into force.]
[7.4. No Party shall require a service provider of another Party to establish or maintain a representative office or any form of enterprise, or to be resident in its territory as a condition for the cross-border provision of a service.]
Article 8: DEFINITIONS
[SERVICES:
[All][Any] service[s] in any sector, except those services supplied in the exercise of governmental authority.]
[SUPPLY OF A SERVICE:
The production, distribution, marketing, sale, and supply of a service.]
[SERVICE SUPPLIED IN THE EXERCISE OF GOVERNMENTAL AUTHORITY:
[Service supplied neither on a commercial basis, nor in competition with one or more service [providers][suppliers][, including activities carried out by a central bank or by a monetary and exchange authority, or by any other public entity].]
[Any service supplied by a public institution, which is not supplied under commercial conditions, nor in competition between one or more service suppliers.]
[Any service which is supplied neither on a commercial basis, nor in competition with one or more economic enterprises, and includes:
a) activities conducted by the central bank or monetary authority or any other public entity, in pursuit of monetary or exchange rate policies;
b) activities forming part of a statutory system of social security or public retirement plans;
c) activities forming part of a system of national security or for the establishment or maintenance of public order; and
d) other activities conducted by a public entity for the account of or with the guarantee or using financial resources of the government.]]
[SERVICE PROVIDER:
[All][Any] persons who suppl[y][ies] a service. [When the service is not supplied by a juridical person directly, but rather through other forms of commercial presence, for example, a branch or representative office, the service provider (i.e., the juridical person), through that presence, shall nevertheless be granted the treatment granted to service providers on the basis of the Chapter. Such treatment shall be granted to the presence through which the service is supplied, without having to grant it to any other party of the provider located outside the territory in which the service is being supplied.]]
[SERVICE PROVIDER OF A PARTY:
A person of a Party that seeks to provide or provides a service.]
[SERVICE CONSUMER:
Any person that receives or uses a service.]
[MEASURE:
[Any [measure][provision] adopted by a Party, [at any level of government,] whether in the form of a law, [decree, resolution,] regulation, rule, procedure, decision, or administrative [provision][rule][, [requirement or practice,] or in any other form].]
[Any law, regulation, [rule,] procedure, [decision or administrative practice,
inter alia][, requirement, or practice].]]
[MEASURE ADOPTED OR MAINTAINED BY A PARTY:
[Shall mean][Means] measures adopted by:
a) [central], [national or] federal, state, [provincial, departmental, municipal or local] and local [government authorities][governments and authorities]; and
b) non-governmental institutions [that perform functions][exercising powers] delegated to them by the governments or authorities referred to in sub-paragraph (a).]
[MEASURES ADOPTED OR MAINTAINED BY PARTIES AFFECTING TRADE IN SERVICES:
[This deals with measures related to:]
a) Purchase, payment, or use of a service;
b) access to and use of services required by those Parties to be offered to the general public in order to deliver a service;
c) Presence, including commercial presence, of persons of a Party in the territory of another Party for the delivery of a service.]
[LEVEL OF GOVERNMENT:
[Refers to the national, state, regional, departmental, federal, municipal, provincial, cantonal, etc. levels at which measures affecting trade in services in the Parties can be adopted.]
[Reference to national[,] [or] federal, [or provincial] [or] [and] state governments includes non-governmental agencies with regulatory, administrative, or other governmental powers conferred on them by those governments.]]
[CROSS-BORDER TRADE IN SERVICES or CROSS-BORDER SUPPLY OF SERVICES:
[The supply of a service:] [Means the supply of a service:]
a) from the territory of a Party into the territory of another Party;
b) in [the] territory of a Party, by [a] person[s] of that Party, to [a] person[s] of another Party; or
c) by a national of a Party in the territory of another Party; but [excluding] [does not include] the provision of a service in the territory of a Party [by][by means of] an
investment1 [in that territory].]
[PROVISION OF SERVICES
The supply of services:
a) from the territory of one Party into the territory of any other Party;
b) in the territory of a Party to a consumer of services of any other Party;
c) by a service [provider][supplier] of a Party through a commercial presence in the territory of another Party; and
d) by a service [provider][supplier] of a Party through the presence of natural persons of a Party in the territory of any other Party.]
[SERVICE OF ANOTHER PARTY:
[The service supplied:
a) from the territory of or in the territory of the other Party; or
b) by a service supplier of the other Party, through commercial presence or through presence of natural persons.]
[The service supplied:
a) from or in the territory of that other Party, by a service provider of that Party;
b) in the case of the delivery of a service through commercial presence, or through the presence of natural persons, by a service provider of another Party.]]
[COMMERCIAL PRESENCE:
Any type of commercial or professional establishment, through, among other[s] [means]:
a) the constitution, acquisition, or [maintenance][stay] of a juridical person; [or][as well as]
b) [the creation or maintenance of] a [local] branch or representative office, [within][in] the territory of a Party, for the purpose of supplying* a service.]
[SECTOR:
Service sector means:
a) with reference to a specific commitment, one or more subsectors of that service, or all of them, as specified in the list of a Party;
b) otherwise, the entirety of this sector of services, including all of its subsectors.]
[ENTERPRISE:
[Any][An] entity constituted or organized pursuant to [existing][applicable] law, whether or not for profit, and whether privately or government owned, [as well as other organizations or economic entities organized in conformity with the applicable legislation such as] including [companies][firms,] [trusts,] [corporations], holdings, partnerships, sole proprietorships, joint ventures or other forms of associations, [and branches of an enterprise]. [Not withstanding the above, corporations with bearer shares are not included.]]
[ENTERPRISE OF A PARTY:
An enterprise constituted or organized pursuant to the legislation of a Party, including local branches in the territory of a Party and carrying out economic activities in that territory.]
[COMPANY:
An entity constituted or organized under applicable law, whether or not for profit, and whether privately or governmentally owned or controlled. Forms that a company may take include a corporation, trust, partnership, sole proprietorship, branch, joint venture, association, or similar organization.]
[COMPANY OR OTHER LEGAL ENTITY:
a) substantially owned if more than 50% of the equity interest therein is beneficially owned by nationals mentioned in subparagraphs 5(a) and (b) above;
b) effectively controlled if nationals mentioned in subparagraph (a) of this paragraph have the power to name a majority of its directors or legally manage its operations.]
[EXISTING:
means in effect on ( ).]
[PERSON:
A natural or juridical person.]
[NATURAL PERSON:
Shall be defined as:
a) a citizen of the Party;
b) a permanent resident of that Party in accordance with the National legislation of the respective Party.]
[NATURAL PERSON OF ANOTHER PARTY:
[A national of any other Party under the law of that Party.]
[A natural person residing in the territory of that other Party or in that of any other Party and who, according to the legislation of that other Party, is a national of that other Party.]]
[JURIDICAL PERSON:
[Shall be defined as a company or other legal entity constituted in a Party in conformity with their respective laws, provided that such company or other legal entity:
a) has its registered office and central administration and carries out substantial activity within the Parties of the Agreement.
b) is substantially owned and effectively controlled by persons listed in paragraphs 5(a) and (b) above.]
[Any juridical entity duly constituted or organized in any other manner, according to applicable legislation, whether for profit or not for profit, and whether publicly or privately owned, including any corporation, trust, partnership, joint venture, sole proprietorship, or association.]]
[JURIDICAL PERSON OF ANOTHER PARTY:
[Any juridical person constituted or organized in accordance with the legislation of the other Party and that develops or intends to develop substantial commercial operations in the territory of that Party or of any other Party.]
[A juridical person of another Party:
a) is “owned” by persons of a Party if those persons have full ownership of more than 50 percent of its capital stock;
b) is “controlled” by persons of a Part if they have the power to appoint the majority of its directors or legally manage its operations;
c) is “related” to another person when it controls or is under the control of that person, or when both are under the control of the same person.]]
[NON-DISCRIMINATORY QUANTITATIVE RESTRICTION:
A nondiscriminatory measure that imposes limitations on:
a) the number of service providers, whether in the form of a quota, a monopoly, an economic needs test, or by any other quantitative means; or
b) the operations of any service provider, whether in the form of a quota, an economic needs test, or by any other quantitative means.]
[PROFESSIONAL SERVICES:
Services whose provision requires specialized post-secondary education or equivalent training or experience, and for which the right to practice is granted or restricted by a Party, but not include services provided by trades-persons or vessels and aircraft crew members.]
[SPECIALTY AIR SERVICES:
[Services include] Aerial mapping, aerial surveying, aerial photography, forest fire management, fire fighting, aerial advertising, glider towing, parachute jumping, aerial construction services, heli-logging [of wooden tree trunks], aerial sightseeing, flight training, aerial inspection and surveillance, and aerial spraying services.]
[DIRECT TAXES:
Deals with all taxes on total income, on elements of income or of capital, including taxes on gains from alienation of property, taxes on estates, inheritances, and gifts, and taxes on total amounts of wages or salaries paid by enterprises, as well as taxes on capital appreciation.]
SECTION ON OTHER ISSUES RELATED TO THE ABOVE
(AS DETERMINED BY EACH COUNTRY OR GROUP)
[Domestic Regulation
[1. [In establishing its domestic regulations,] in those sectors in which commitments are undertaken, each Party shall ensure that all measures of general application affecting trade in services are administered in a reasonable, objective, and impartial manner.]
[2. Where authorization is required for the supply of a service on which a [specific] commitment has been made, the competent authorities of the Party involved shall, within a reasonable period after the submission of an application considered to be complete under domestic laws and regulations, inform the applicant of the decision regarding the application. At the request of the applicant, the competent authorities of the Party shall provide without undue delay information regarding the status of the application.]
[3. In sectors where specific commitments regarding professional services are undertaken, each Party shall establish adequate procedures to verify the competence of the professionals of other Parties. Such procedures may be covered in an annex for professional services.]
[3.
a) In sectors in which a Party has undertaken commitments, pending the entry into force of the disciplines developed pursuant to the above paragraph, the Party shall not apply licensing and qualification requirements and technical standards that nullify or impair such commitments in a manner which:
- does not comply with the criteria outlined in subparagraphs (a) through (f) of the above paragraph; and
- it could not reasonably have been expected of that Party at the time the commitments in those sectors were made.
b) In determining whether a Party is in conformity with the obligation under (a) of this paragraph, account shall be taken of the international standards of relevant international organizations applied by that Party.]
[4. The liberalization process shall be pursued while observing the right of each Party to regulate and introduce new regulations within its territory in pursuit of its national policy objectives for the services sector. The regulations may regulate,
inter alia, national treatment and market access, provided that they do not nullify or impair the obligations under this Chapter or the commitments in Parties’ Schedules.
[5.
a) Each Party shall maintain or institute as soon as practicable judicial, arbitral or administrative tribunals or procedures which provide, at the request of an affected service supplier, for the prompt review of, and where justified, appropriate remedies for, administrative decisions affecting trade in services. Where such procedures are not independent of the agency entrusted with the administrative decision concerned, the Party shall ensure that the procedures in fact provide for an objective and impartial review.
b) The provisions of subparagraph (a) shall not be construed to require a Party to institute such tribunals or procedures where this would be inconsistent with its constitutional structure or the nature of its legal system.]
[6.1 With a view to ensuring that measures relating to qualification requirements and procedures, technical standards and licensing requirements do not constitute unnecessary barriers to trade in services, the necessary disciplines shall be developed. Such disciplines shall aim to ensure that the requirements,
inter alia:
a) are based on objective and transparent criteria such as competence and the ability to supply the service;
b) avoid unnecessary regulations and are not more burdensome than necessary to ensure the quality of the service;
c) are not in themselves, in the case of licensing procedures, restrictions on the supply of the service;
d) limit the regulation in scope to what is necessary for the attainment of their objectives;
e) avoid abusive monopoly or dominant positions in the market;
f) are aimed at stimulating the use of market mechanisms to achieve regulatory objectives.]]
[National Regulations
[Procedures
1. The Parties shall establish procedures for:
a) a Party to notify another Party and include in its relevant lists:
i) commitments pursuant to Article 10;
ii) amendments of measures referred to in Article 08(1), (2), and (3); and,
iii) quantitative restrictions in accordance with Article 07, and
b) consultations on reservations, quantitative restrictions, or commitments, with a view to further liberalization.]
[Granting [permits, authorizations] [licenses and certificates]
[1. For the purpose of ensuring that any measure that a Party adopts or maintains regarding the requirements and procedures for granting [permits, authorizations,] licenses [and][[or] certificates] to nationals of any other Party does not constitute an unnecessary barrier to trade, each [Party][one of the Parties] shall endeavor to ensure that [these][such] measures:
a) are based on objective and transparent criteria, such as the capacity, [and] ability [and competence] to supply a service;
b) are not more burdensome than necessary to ensure the quality of a service; and
c) do not constitute a disguised restriction on the [supply] [to the cross-border supply] of a service.]
[1. The Parties shall agree to establish mutual recognition and licensing requirements and other regulations, in order to ensure that services or service suppliers comply with the criteria applied by each Party for the authorization, licensing, operation and certification of service suppliers, particularly for professional services.]
2. Where a Party recognizes, either unilaterally or by agreement with a non-Party State, education, experience, licenses, or certifications obtained in the territory of another Party or of a non-Party:
a) nothing in Article 03 shall be construed to require a Party to accord such recognition to education, experience, licenses, or certifications obtained in the territory of the other Party; and,
b) a Party shall afford the other Party an adequate opportunity to demonstrate that education, experience, licenses, or certifications obtained in the territory of another Party should also be recognized or to conclude an agreement or arrangement of comparable effect.
3. Each Party shall, following the entry into force of this Agreement, eliminate all citizenship or permanent residency requirements. Where a Party does not comply with this obligation with respect to a particular sector, it shall list said requirements in its Section A of the “Nonconforming and Future Measures” annex. The other Party may adopt or maintain, as its sole remedy, an equivalent requirement in the same sector and for such period as the non-compliant Party maintains its requirement.
4. The Parties shall consult periodically with the view to determining the feasibility of removing any remaining citizenship or permanent residency requirement for the licensing or certification of service providers from other Parties.
5. The Annex on Professional Services sets out procedures for recognizing education, experience, and other rules and requirements governing professional service providers.]
| 4 |
Some countries consider that there could be other measures in addition to those indicated in this paragraph. |
| 5 |
One country recognizes that specialized provisions need to be developed for financial services. |
| 1 |
One country recognizes that the terminology is to be conformed to that used in the FTAA Investment Chapter. |
| 1 |
One country considers that the content of such a paragraph would depend on the nature of other disciplines to be developed under this Chapter. |
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countries
