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WTO ANALYTICAL INDEX: GENERAL AGREEMENT ON TRADE IN SERVICES General Agreement on Trade in Services |
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> Preamble
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Article IV: Increasing Participation of Developing Countries 1. The increasing participation of developing country Members in world trade shall be facilitated through negotiated specific commitments, by different Members pursuant to Parts III and IV of this Agreement, relating to:
(a) the strengthening of their domestic services capacity and its efficiency and competitiveness, inter alia through access to technology on a commercial basis;
(b) the improvement of their access to distribution channels and information networks; and
(c) the liberalization of market access in sectors and modes of supply of export interest to them.
2. Developed country Members, and to the extent possible other Members, shall establish contact points within two years from the date of entry into force of the WTO Agreement to facilitate the access of developing country Members' service suppliers to information, related to their respective markets, concerning:
(a) commercial and technical aspects of the supply of services;
(b) registration, recognition and obtaining of professional qualifications; and
(c) the availability of services technology.
3. Special priority shall be given to the least-developed country Members in the implementation of paragraphs 1 and 2. Particular account shall be taken of the serious difficulty of the least-developed countries in accepting negotiated specific commitments in view of their special economic situation and their development, trade and financial needs.
31. With respect to application of Article IV to electronic commerce, see the Progress Report adopted by the Council for Trade in Services in the context of the Work Programme on Electronic Commerce on 19 July 1999.(39) 32. With respect to the contact points provided for in paragraph 2, see the "Decision on the Notification of the Establishment of Enquiry and Contact Points" referenced in paragraph 30 above. 33. With respect to contact points in accountancy services, see the Disciplines on Domestic Regulation in the Accountancy Sector, adopted by the Council for Trade in Services on 14 December 1998.(40)
VII. Article V back to top Article V: Economic Integration 1. This Agreement shall not prevent any of its Members from being a party to or entering into an agreement liberalizing trade in services between or among the parties to such an agreement, provided that such an agreement:
(a) has substantial sectoral coverage,(1) and
(footnote original) 1 This condition is understood in terms of number of sectors, volume of trade affected and modes of supply. In order to meet this condition, agreements should not provide for the a priori exclusion of any mode of supply.
(b) provides for the absence or elimination of substantially all discrimination, in the sense of Article XVII, between or among the parties, in the sectors covered under subparagraph (a), through:
(i) elimination of existing discriminatory measures, and/or
(ii) prohibition of new or more discriminatory measures,
either at the entry into force of that agreement or on the basis of a reasonable time-frame, except for measures permitted under Articles XI, XII, XIV and XIV bis.
2. In evaluating whether the conditions under paragraph 1(b) are met, consideration may be given to the relationship of the agreement to a wider process of economic integration or trade liberalization among the countries concerned.
3. (a) Where developing countries are parties to an agreement of the type referred to in paragraph 1, flexibility shall be provided for regarding the conditions set out in paragraph 1, particularly with reference to subparagraph (b) thereof, in accordance with the level of development of the countries concerned, both overall and in individual sectors and subsectors.
(b) Notwithstanding paragraph 6, in the case of an agreement of the type referred to in paragraph 1 involving only developing countries, more favourable treatment may be granted to juridical persons owned or controlled by natural persons of the parties to such an agreement.
4. Any agreement referred to in paragraph 1 shall be designed to facilitate trade between the parties to the agreement and shall not in respect of any Member outside the agreement raise the overall level of barriers to trade in services within the respective sectors or subsectors compared to the level applicable prior to such an agreement.
5. If, in the conclusion, enlargement or any significant modification of any agreement under paragraph 1, a Member intends to withdraw or modify a specific commitment inconsistently with the terms and conditions set out in its Schedule, it shall provide at least 90 days advance notice of such modification or withdrawal and the procedure set forth in paragraphs 2, 3 and 4 of Article XXI shall apply.
6. A service supplier of any other Member that is a juridical person constituted under the laws of a party to an agreement referred to in paragraph 1 shall be entitled to treatment granted under such agreement, provided that it engages in substantive business operations in the territory of the parties to such agreement.
7. (a) Members which are parties to any agreement referred to in paragraph 1 shall promptly notify any such agreement and any enlargement or any significant modification of that agreement to the Council for Trade in Services. They shall also make available to the Council such relevant information as may be requested by it. The Council may establish a working party to examine such an agreement or enlargement or modification of that agreement and to report to the Council on its consistency with this Article.
(b) Members which are parties to any agreement referred to in paragraph 1 which is implemented on the basis of a time-frame shall report periodically to the Council for Trade in Services on its implementation. The Council may establish a working party to examine such reports if it deems such a working party necessary.
(c) Based on the reports of the working parties referred to in subparagraphs (a) and (b), the Council may make recommendations to the parties as it deems appropriate.
8. A Member which is a party to any agreement referred to in paragraph 1 may not seek compensation for trade benefits that may accrue to any other Member from such agreement.
34. The Panel on Canada - Autos, in a finding subsequently not addressed by the Appellate Body, considered that, with respect to an import duty exemption available to only a limited number of firms, Canada could not claim an exemption from its MFN obligation under Article II by invoking Article V:1. The Panel noted that the Canadian measures at issue did not grant more favourable treatment to all services and service suppliers of members of NAFTA: "Even assuming that the [Canadian measures at issue] could be brought within the scope of the services liberalization provisions of NAFTA, we note that the import duty exemption under the [measures at issue] is accorded to a small number of manufacturers/wholesalers of the United States to the exclusion of all other manufacturers/wholesalers of the United States and of Mexico. The [measures at issue], therefore, provide more favourable treatment to only some and not all services and service suppliers of Members of NAFTA, while, according to Article V:1(b), an economic integration agreement has to provide for 'the absence or elimination of substantially all discrimination, in the sense of Article XVII', in order to be eligible for the exemption from Article II of the GATS.
Although the requirement of Article V:1(b) is to provide non-discrimination in the sense of Article XVII (National Treatment), we consider that once it is fulfilled it would also ensure non-discrimination between all service suppliers of other parties to the economic integration agreement. It is our view that the object and purpose of this provision is to eliminate all discrimination among services and service suppliers of parties to an economic integration agreement, including discrimination between suppliers of other parties to an economic integration agreement. In other words, it would be inconsistent with this provision if a party to an economic integration agreement were to extend more favourable treatment to service suppliers of one party than that which it extended to service suppliers of another party to that agreement.
Moreover, it is worth recalling that Article V provides legal coverage for measures taken pursuant to economic integration agreements, which would otherwise be inconsistent with the MFN obligation in Article II. Paragraph 1 of Article V refers to 'an agreement liberalizing trade in services'. Such economic integration agreements typically aim at achieving higher levels of liberalization between or among their parties than that achieved among WTO Members. Article V:1 further prescribes a certain minimum level of liberalization which such agreements must attain in order to qualify for the exemption from the general MFN obligation of Article II. In this respect, the purpose of Article V is to allow for ambitious liberalization to take place at a regional level, while at the same time guarding against undermining the MFN obligation by engaging in minor preferential arrangements. However, in our view, it is not within the object and purpose of Article V to provide legal coverage for the extension of more favourable treatment only to a few service suppliers of parties to an economic integration agreement on a selective basis, even in situations where the maintenance of such measures may explicitly be provided for in the agreement itself."(41) 35. With respect to the format for notifications under paragraph 7, see the Guidelines for Notifications under the General Agreement on Trade in Services.(42) (b) Reporting on the operation of regional trade agreements 36. On 20 February 1998, the Committee on Regional Trade Agreements made recommendations to the Council for Trade in Services with respect to the reporting on the operation of regional trade agreements to the Committee.(43) On 23 and 24 November 1998, the Council for Trade in Service took note of these recommendations.(44) (c) Examination of specific agreements 37. With respect to the procedures for the examination of specific agreements, see the Chapter on WTO Agreement, paragraph 181. 38. With respect to the enlargement of the European Union as a result of the accession of Austria, Finland and Sweden on 1 January 1995(45), the Council for Trade in Services agreed that two issues, namely the Treaty of Accession of Austria, Finland and Sweden to the European Union and the Treaties establishing the European Union should be discussed separately. With respect to the first issue, the Council for Trade in Services on 30 March 1995 agreed to establish the Working Party on the Enlargement of the European Union.(46) With respect to the second issue, the Council for Trade in Services, at its meeting of 23 September 1996, decided to refer the Treaties establishing the European Union to the Committee on Regional Trade Agreements for examination pursuant to paragraph 7 of Article V of the GATS.(47) 39. On 30 March 1995, Canada, Mexico and the United States jointly notified the North American Free Trade Agreement (NAFTA) to the Council for Trade in Services pursuant to paragraph 7(a) of Article V of the GATS.(48) On the same date, the Council for Trade in Services agreed to establish a Working Party(49) 40. Between 1 January 1995 and 31 December 2002, the Council for Trade in Services adopted terms of reference for examination by the Committee on Regional Trade Agreements pursuant to paragraph 7(a) of Article V of the GATS of the following agreements: (a) Establishment of the European Union, EC Treaty of Rome(50);
(b) Australia-New Zealand Closer Economic Relations Trade Agreement(51);
(c) Europe Agreement establishing an association between the European Communities and their Member States and the Republic of Slovakia(52);
(d) Europe Agreement establishing an association between the European Communities and their Member States and Republic of Hungary(53);
(e) Europe Agreement establishing an association between the European Communities and their Member States and Republic of Poland(54);
(f) Europe Agreement establishing an association between the European Communities and their Member States and the Czech Republic(55);
(g) Europe Agreement establishing an association between the European Communities and their Member States and Romania(56);
(h) European Economic Area ("EEA") concluded between the European Communities and their Member States, and the Kingdom of Norway, the Republic of Iceland and the Principality of Liechtenstein(57);
(i) Europe Agreement establishing an association between the European Communities and their Member States and Bulgaria(58);
(j) Free Trade Agreement between Chile and Mexico(59);
(k) Free Trade Agreement between the EFTA States and Mexico(60);
(l) Agreement between New Zealand and Singapore on a Closer Economic Partnership(61);
(m) Joint Communication from the European Communities and their Member States and the Republic of Latvia(62);
(n) Joint Communication from the European Communities and their Member States and the Republic of Estonia(63);
(o) Joint Communication from the European Communities and their Member States and the Republic of Lithuania(64);
(p) Joint Communication from the European Communities and their Member States and the Republic of Slovenia(65);
(q) Notification pursuant to Article V:7 of the GATS from Chile and Costa Rica(66);
(r) Joint Communication from the European Communities and their Member States and the United Mexican States(67);
(s) Notification pursuant to Article V:7(a) of the GATS from Jordan and the United States(68);
(t) Agreement between Japan and Singapore for a New-Age Economic Partnership(69); and
(u) Agreement amending the Convention Establishing the European Free Trade Association.(70)
VIII. Article V bis back to top Article V bis: Labour Markets Integration Agreements This Agreement shall not prevent any of its Members from being a party to an agreement establishing full integration(2) of the labour markets between or among the parties to such an agreement, provided that such an agreement:
(footnote original) 2 Typically, such integration provides citizens of the parties concerned with a right of free entry to the employment markets of the parties and includes measures concerning conditions of pay, other conditions of employment and social benefits.
(a) exempts citizens of parties to the agreement from requirements concerning residency and work permits;
(b) is notified to the Council for Trade in Services.
41. With respect to the format for notifications under subparagraph (b), see the Guidelines for Notifications under the General Agreement on Trade in Services.(71)
IX. Article VI back to top Article VI: Domestic Regulation 1. In sectors where specific commitments are undertaken, each Member shall ensure that all measures of general application affecting trade in services are administered in a reasonable, objective and impartial manner.
2. (a) Each Member 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 Member 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 Member to institute such tribunals or procedures where this would be inconsistent with its constitutional structure or the nature of its legal system.
3. Where authorization is required for the supply of a service on which a specific commitment has been made, the competent authorities of a Member shall, within a reasonable period of time after the submission of an application considered complete under domestic laws and regulations, inform the applicant of the decision concerning the application. At the request of the applicant, the competent authorities of the Member shall provide, without undue delay, information concerning the status of the application.
4. 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 Council for Trade in Services shall, through appropriate bodies it may establish, develop any necessary disciplines. Such disciplines shall aim to ensure that such requirements are, inter alia:
(a) based on objective and transparent criteria, such as competence and the ability to supply the service;
(b) not more burdensome than necessary to ensure the quality of the service;
(c) in the case of licensing procedures, not in themselves a restriction on the supply of the service.
5. (a) In sectors in which a Member has undertaken specific commitments, pending the entry into force of disciplines developed in these sectors pursuant to paragraph 4, the Member shall not apply licensing and qualification requirements and technical standards that nullify or impair such specific commitments in a manner which:
(i) does not comply with the criteria outlined in subparagraphs 4(a), (b) or (c); and
(ii) could not reasonably have been expected of that Member at the time the specific commitments in those sectors were made.
(b) In determining whether a Member is in conformity with the obligation under paragraph 5(a), account shall be taken of international standards of relevant international organizations(3) applied by that Member.
(footnote original) 3 The term "relevant international organizations" refers to international bodies whose membership is open to the relevant bodies of at least all Members of the WTO.
6. In sectors where specific commitments regarding professional services are undertaken, each Member shall provide for adequate procedures to verify the competence of professionals of any other Member.
42. With respect to application of Article VI to electronic commerce, see the Progress Report adopted by the Council for Trade in Services in the context of the Work Programme on Electronic Commerce on 19 July 1999.(72) (a) Professional services/domestic regulation 43. With respect to the Working Party on Professional Services and its successor, the Working Party on Domestic Regulation, see paragraphs 89-91 below. (b) Disciplines in accountancy services 44. On 14 December 1998, with a view to ensuring that domestic regulations affecting trade in accountancy services met the requirements of Article VI:4, the Council for Trade in Services adopted the Disciplines on Domestic Regulation in the Accountancy Sector,(73) which had been recommended by the Working Party on Professional Services. These Disciplines contain, inter alia, the following provision under the heading "General Provisions": "Members shall ensure that measures not subject to scheduling under Articles XVI or XVII of the GATS, relating to licensing requirements and procedures, technical standards and qualification requirements and procedures are not prepared, adopted or applied with a view to or with the effect of creating unnecessary barriers to trade in accountancy services. For this purpose, Members shall ensure that such measures are not more trade-restrictive than necessary to fulfil a legitimate objective. Legitimate objectives are, inter alia, the protection of consumers (which includes all users of accounting services and the public generally), the quality of the service, professional competence, and the integrity of the profession."(74) (c) Relationship with Articles XVI and XVII 45. On 10 December 1998, the Working Party on Professional Services submitted a report to the Council for Trade in Services on the development of Disciplines on Domestic Regulation in the Accountancy Sector, including the informal note by the Chairman entitled "Discussion of Matters Relating to Articles XVI and XVII of the GATS in Connection with the Disciplines on Domestic Regulation in the Accountancy Sector."(75)
X. Article VII back to top Article VII: Recognition 1. For the purposes of the fulfilment, in whole or in part, of its standards or criteria for the authorization, licensing or certification of services suppliers, and subject to the requirements of paragraph 3, a Member may recognize the education or experience obtained, requirements met, or licenses or certifications granted in a particular country. Such recognition, which may be achieved through harmonization or otherwise, may be based upon an agreement or arrangement with the country concerned or may be accorded autonomously.
2. A Member that is a party to an agreement or arrangement of the type referred to in paragraph 1, whether existing or future, shall afford adequate opportunity for other interested Members to negotiate their accession to such an agreement or arrangement or to negotiate comparable ones with it. Where a Member accords recognition autonomously, it shall afford adequate opportunity for any other Member to demonstrate that education, experience, licenses, or certifications obtained or requirements met in that other Member's territory should be recognized.
3. A Member shall not accord recognition in a manner which would constitute a means of discrimination between countries in the application of its standards or criteria for the authorization, licensing or certification of services suppliers, or a disguised restriction on trade in services.
4. Each Member shall:
(a) within 12 months from the date on which the WTO Agreement takes effect for it, inform the Council for Trade in Services of its existing recognition measures and state whether such measures are based on agreements or arrangements of the type referred to in paragraph 1;
(b) promptly inform the Council for Trade in Services as far in advance as possible of the opening of negotiations on an agreement or arrangement of the type referred to in paragraph 1 in order to provide adequate opportunity to any other Member to indicate their interest in participating in the negotiations before they enter a substantive phase;
(c) promptly inform the Council for Trade in Services when it adopts new recognition measures or significantly modifies existing ones and state whether the measures are based on an agreement or arrangement of the type referred to in paragraph 1.
5. Wherever appropriate, recognition should be based on multilaterally agreed criteria. In appropriate cases, Members shall work in cooperation with relevant intergovernmental and non-governmental organizations towards the establishment and adoption of common international standards and criteria for recognition and common international standards for the practice of relevant services trades and professions.(76)
46. With respect to application of Article VII to electronic commerce, see the Progress Report adopted by the Council for Trade in Services in the context of the Work Programme on Electronic Commerce on 19 July 1999.(77) 47. With respect to the format for notifications under paragraph 4, see the Guidelines for Notifications under the General Agreement on Trade in Services.(78) (a) Guidelines for Mutual Recognition Agreements or Arrangements in the Accountancy Sector 48. On 29 May 1997, the Council for Trade in Services approved the voluntary Guidelines for Mutual Recognition Agreements or Arrangements in the Accountancy Sector.(79)
XI. Article VIII back to top Article VIII: Monopolies and Exclusive Services Suppliers 1. Each Member shall ensure that any monopoly supplier of a service in its territory does not, in the supply of the monopoly service in the relevant market, act in a manner inconsistent with that Member's obligations under Article II and specific commitments.
2. Where a Member's monopoly supplier competes, either directly or through an affiliated company, in the supply of a service outside the scope of its monopoly rights and which is subject to that Member's specific commitments, the Member shall ensure that such a supplier does not abuse its monopoly position to act in its territory in a manner inconsistent with such commitments.
3. The Council for Trade in Services may, at the request of a Member which has a reason to believe that a monopoly supplier of a service of any other Member is acting in a manner inconsistent with paragraph 1 or 2, request the Member establishing, maintaining or authorizing such supplier to provide specific information concerning the relevant operations.
4. If, after the date of entry into force of the WTO Agreement, a Member grants monopoly rights regarding the supply of a service covered by its specific commitments, that Member shall notify the Council for Trade in Services no later than three months before the intended implementation of the grant of monopoly rights and the provisions of paragraphs 2, 3 and 4 of Article XXI shall apply.
5. The provisions of this Article shall also apply to cases of exclusive service suppliers, where a Member, formally or in effect, (a) authorizes or establishes a small number of service suppliers and (b) substantially prevents competition among those suppliers in its territory.(80)
49. With respect to application of Article VIII to electronic commerce, see the Progress Report adopted by the Council for Trade in Services in the context of the Work Programme on Electronic Commerce on 19 July 1999.(81) 50. With respect to the format for notifications under paragraph 4, see the Guidelines for Notifications under the General Agreement on Trade in Services.(82)
XII. Article IX back to top Article IX: Business Practices 1. Members recognize that certain business practices of service suppliers, other than those falling under Article VIII, may restrain competition and thereby restrict trade in services.
2. Each Member shall, at the request of any other Member, enter into consultations with a view to eliminating practices referred to in paragraph 1. The Member addressed shall accord full and sympathetic consideration to such a request and shall cooperate through the supply of publicly available non-confidential information of relevance to the matter in question. The Member addressed shall also provide other information available to the requesting Member, subject to its domestic law and to the conclusion of satisfactory agreement concerning the safeguarding of its confidentiality by the requesting Member.
51. With respect to application of Article IX to electronic commerce, see the Progress Report adopted by the Council for Trade in Services in the context of the Work Programme on Electronic Commerce on 19 July 1999.(83)
XIII. Article X back to top Article X: Emergency Safeguard Measures 1. There shall be multilateral negotiations on the question of emergency safeguard measures based on the principle of non-discrimination. The results of such negotiations shall enter into effect on a date not later than three years from the date of entry into force of the WTO Agreement.
2. In the period before the entry into effect of the results of the negotiations referred to in paragraph 1, any Member may, notwithstanding the provisions of paragraph 1 of Article XXI, notify the Council on Trade in Services of its intention to modify or withdraw a specific commitment after a period of one year from the date on which the commitment enters into force; provided that the Member shows cause to the Council that the modification or withdrawal cannot await the lapse of the three-year period provided for in paragraph 1 of Article XXI.
3. The provisions of paragraph 2 shall cease to apply three years after the date of entry into force of the WTO Agreement.
1. Working Party on GATS Rules (a) First sentence of paragraph 1 of Article X 52. Negotiations on the question of emergency safeguard measures have been carried out in the Working Party on GATS Rules, established on 30 March 1995 by the Council for Trade in Services.(84) Members have postponed four times the deadline referred to in Article X:1. In the Fourth Decision on Negotiations on Emergency Safeguard Measures, Members decided that the first sentence of paragraph 1 of Article X should continue to apply until 15 March 2004.(85) (b) Guidelines for work programmes 53. The Working Party on GATS Rules adopted its work programmes(86) on 22 July 2002. The Program sets out the deadlines for negotiations, and the guidelines for the Working Party's conduct in what regards the indicative and flexible character of the discussions so as to not prejudge in any way the outcome of the respective negotiations: "In organizing their work on government procurement, together with the work on emergency safeguard measures and subsidies, Members recognized that:
(a) The work programmes do not prejudge in any way the outcome of the respective negotiations on emergency safeguard measures, subsidies and government procurement. Members will remain free to bring up any relevant issues for discussion, including the questions of feasibility and desirability, as well as the scope of the negotiations, under any of the three subjects of negotiations.
(b) The benchmarks for submissions are indicative, with a view to encouraging Members to put forward submissions on the respective subjects as early as possible, and would be without prejudice to Members' right to put forward further suggestions and raise relevant issues by way of submissions at any time, under any of the three subjects of negotiations.
(c) The undertaking of individual items of work, including the question of feasibility and desirability, should be without prejudice to each other under each subject of negotiations
Members also recognize that flexibility should be exercised in conducting the work of the Working Party and the work programmes may be adjusted in the future to take account of latest progress "(87)
XIV. Article XI back to top Article XI: Payments and Transfers 1. Except under the circumstances envisaged in Article XII, a Member shall not apply restrictions on international transfers and payments for current transactions relating to its specific commitments.
2. Nothing in this Agreement shall affect the rights and obligations of the members of the International Monetary Fund under the Articles of Agreement of the Fund, including the use of exchange actions which are in conformity with the Articles of Agreement, provided that a Member shall not impose restrictions on any capital transactions inconsistently with its specific commitments regarding such transactions, except under Article XII or at the request of the Fund.
No jurisprudence or decision of a competent WTO body.
XV. Article XII back to top Article XII: Restrictions to Safeguard the Balance-of-Payment 1. In the event of serious balance-of-payments and external financial difficulties or threat thereof, a Member may adopt or maintain restrictions on trade in services on which it has undertaken specific commitments, including on payments or transfers for transactions related to such commitments. It is recognized that particular pressures on the balance of payments of a Member in the process of economic development or economic transition may necessitate the use of restrictions to ensure, inter alia, the maintenance of a level of financial reserves adequate for the implementation of its programme of economic development or economic transition.
2. The restrictions referred to in paragraph 1:
(a) shall not discriminate among Members;
(b) shall be consistent with the Articles of Agreement of the International Monetary Fund;
(c) shall avoid unnecessary damage to the commercial, economic and financial interests of any other Member;
(d) shall not exceed those necessary to deal with the circumstances described in paragraph 1;
(e) shall be temporary and be phased out progressively as the situation specified in paragraph 1 improves.
3. In determining the incidence of such restrictions, Members may give priority to the supply of services which are more essential to their economic or development programmes. However, such restrictions shall not be adopted or maintained for the purpose of protecting a particular service sector.
4. Any restrictions adopted or maintained under paragraph 1, or any changes therein, shall be promptly notified to the General Council.
5. (a) Members applying the provisions of this Article shall consult promptly with the Committee on Balance-of-Payments Restrictions on restrictions adopted under this Article.
(b) The Ministerial Conference shall establish procedures(4) for periodic consultations with the objective of enabling such recommendations to be made to the Member concerned as it may deem appropriate.
(footnote original) 4 It is understood that the procedures under paragraph 5 shall be the same as the GATT 1994 procedures.
(c) Such consultations shall assess the balance-of-payment situation of the Member concerned and the restrictions adopted or maintained under this Article, taking into account, inter alia, such factors as:
(i) the nature and extent of the balance-of-payments and the external financial difficulties;
(ii) the external economic and trading environment of the consulting Member;
(iii) alternative corrective measures which may be available.
(d) The consultations shall address the compliance of any restrictions with paragraph 2, in particular the progressive phase-out of restrictions in accordance with paragraph 2(e).
(e) In such consultations, all findings of statistical and other facts presented by the International Monetary Fund relating to foreign exchange, monetary reserves and balance of payments, shall be accepted and conclusions shall be based on the assessment by the Fund of the balance-of-payments and the external financial situation of the consulting Member.
6. If a Member which is not a member of the International Monetary Fund wishes to apply the provisions of this Article, the Ministerial Conference shall establish a review procedure and any other procedures necessary.
54. With respect to the format for notifications under paragraph 4, see the Guidelines for Notifications under the General Agreement on Trade in Services.(88)
XVI. Article XIII back to top Article XIII: Government Procurement 1. Articles II, XVI and XVII shall not apply to laws, regulations or requirements governing the procurement by governmental agencies of services purchased for governmental purposes and not with a view to commercial resale or with a view to use in the supply of services for commercial sale.
2. There shall be multilateral negotiations on government procurement in services under this Agreement within two years from the date of entry into force of the WTO Agreement.
1. Working Party on GATS Rules 55. Negotiations on government procurement in services have been carried out in the Working Party on GATS Rules, established on 30 March 1995 by the Council for Trade in Services.(89)
XVII. Article XIV back to top Article XIV: General Exceptions Subject to the requirement that such measures are not applied in a manner which would constitute a means of arbitrary or unjustifiable discrimination between countries where like conditions prevail, or a disguised restriction on trade in services, nothing in this Agreement shall be construed to prevent the adoption or enforcement by any Member of measures:
(a) necessary to protect public morals or to maintain public order;(5)
(footnote original) 5 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.
(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;
(d) inconsistent with Article XVII, provided that the difference in treatment is aimed at ensuring the equitable or effective(6) imposition or collection of direct taxes in respect of services or service suppliers of other Members;
(footnote original) 6 Measures that are aimed at ensuring the equitable or effective imposition or collection of direct taxes include measures taken by a Member under its taxation system which:
(i) apply to non-resident service suppliers in recognition of the fact that the tax obligation of non-residents is determined with respect to taxable items sourced or located in the Member's territory; or
(ii) apply to non-residents in order to ensure the imposition or collection of taxes in the Member's territory; or
(iii) apply to non-residents or residents in order to prevent the avoidance or evasion of taxes, including compliance measures; or
(iv) apply to consumers of services supplied in or from the territory of another Member in order to ensure the imposition or collection of taxes on such consumers derived from sources in the Member's territory; or
(v) distinguish service suppliers subject to tax on worldwide taxable items from other service suppliers, in recognition of the difference in the nature of the tax base between them; or
(vi) determine, allocate or apportion income, profit, gain, loss, deduction or credit of resident persons or branches, or between related persons or branches of the same person, in order to safeguard the Member's tax base.
Tax terms or concepts in paragraph (d) of Article XIV and in this footnote are determined according to tax definitions and concepts, or equivalent or similar definitions and concepts, under the domestic law of the Member taking the measure.
(e) inconsistent with Article II, provided that the difference in treatment is the result of an agreement on the avoidance of double taxation or provisions on the avoidance of double taxation in any other international agreement or arrangement by which the Member is bound.
56. With respect to application of Article XIV to electronic commerce, see the Progress Report adopted by the Council for Trade in Services in the context of the Work Programme on Electronic Commerce on 19 July 1999.(90) (b) Trade in services and the environment 57. On 1 March 1995, the Council for Trade in Services, pursuant to the Ministerial Decision on Trade in Services and the Environment, adopted the Decision on Trade in Services and the Environment.(91) The Decision stipulates, inter alia: "In order to determine whether any modification of Article XIV of the Agreement is required to take account of such measures, [Ministers] request the Committee on Trade and Environment to examine and report, with recommendations if any, on the relationship between services trade and the environment including the issue of sustainable development. The Committee shall also examine the relevance of inter-governmental agreements on the environment and their relationship to the Agreement."(92)
XVIII. Article XIV bis back to top Article XIV bis: Security Exceptions 1. Nothing in this Agreement shall be construed:
(a) to require any Member to furnish any information, the disclosure of which it considers contrary to its essential security interests; or
(b) to prevent any Member 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 Member from taking any action in pursuance of its obligations under the United Nations Charter for the maintenance of international peace and security.
2. The Council for Trade in Services shall be informed to the fullest extent possible of measures taken under paragraphs 1(b) and (c) and of their termination.
58. With respect to the format for notifications under paragraph 2, see the Guidelines for Notifications under the General Agreement on Trade in Services.(93)
Footnotes: 39. S/L/74, para. 10. back to text |
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