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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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Members,
Recognizing the growing importance of trade in services for the growth and development of the world economy;
Wishing to establish a multilateral framework of principles and rules for trade in services with a view to the expansion of such trade under conditions of transparency and progressive liberalization and as a means of promoting the economic growth of all trading partners and the development of developing countries;
Desiring the early achievement of progressively higher levels of liberalization of trade in services through successive rounds of multilateral negotiations aimed at promoting the interests of all participants on a mutually advantageous basis and at securing an overall balance of rights and obligations, while giving due respect to national policy objectives;
Recognizing the right of Members to regulate, and to introduce new regulations, on the supply of services within their territories in order to meet national policy objectives and, given asymmetries existing with respect to the degree of development of services regulations in different countries, the particular need of developing countries to exercise this right;
Desiring to facilitate the increasing participation of developing countries in trade in services and the expansion of their service exports including, inter alia, through the strengthening of their domestic services capacity and its efficiency and competitiveness;
Taking particular account of the serious difficulty of the least-developed countries in view of their special economic situation and their development, trade and financial needs;
Hereby agree as follows:
No jurisprudence or decision of a competent WTO body.
Part I: Scope and Defination
II. Article I back to top Article I: Scope and Definition 1. This Agreement applies to measures by Members affecting trade in services.
2. For the purposes of this Agreement, trade in services is defined as the supply of a service:
(a) from the territory of one Member into the territory of any other Member;
(b) in the territory of one Member to the service consumer of any other Member;
(c) by a service supplier of one Member, through commercial presence in the territory of any other Member;
(d) by a service supplier of one Member, through presence of natural persons of a Member in the territory of any other Member.
3. For the purposes of this Agreement:
(a) "measures by Members" means measures taken by:
(i) central, regional or local governments and authorities; and
(ii) non-governmental bodies in the exercise of powers delegated by central, regional or local governments or authorities;
In fulfilling its obligations and commitments under the Agreement, each Member shall take such reasonable measures as may be available to it to ensure their observance by regional and local governments and authorities and non-governmental bodies within its territory;
(b) "services" includes any service in any sector except services supplied in the exercise of governmental authority;
(c) "a service supplied in the exercise of governmental authority" means any service which is supplied neither on a commercial basis, nor in competition with one or more service suppliers.
(a) Measures relating to judicial and administrative assistance 1. With respect to measures relating to judicial and administrative assistance in the context of Article II of GATS, as referenced in paragraph 13 below, at its meeting of 1 March 1995, the Council for Trade in Services agreed to adopt the conclusion of the Sub-Committee on Services concerning measures relating to judicial and administrative assistance.(1) The adopted conclusion, inter alia, states that none of the provisions of the GATS would apply to such measures.(2) (b) Measures relating to the entry and stay of natural persons 2. With respect to the basis for drawing the distinction between "temporary" and "permanent" residency in the context of GATS, see paragraph 107 below. 3. At its meeting of 25 September 1998, the General Council adopted the Work Programme on Electronic Commerce, which mandated the Council for Trade in Services to examine and report on the treatment of electronic commerce in the GATS legal framework.(3) (a) "measures affecting trade in services" 4. The Panel on EC - Bananas III defined the scope of application of the GATS in the following terms: "[N]o measures are excluded a priori from the scope of the GATS as defined by its provisions. The scope of the GATS encompasses any measure of a Member to the extent it affects the supply of a service regardless of whether such measure directly governs the supply of a service or whether it regulates other matters but nevertheless affects trade in services."(4) 5. Based on its interpretation of the scope of the GATS set out in paragraph 4 above, the Panel on EC - Bananas III concluded that there was "no legal basis for an a priori exclusion of measures within the EC banana import licensing regime from the scope of the GATS".(5) The Appellate Body upheld this finding and held that no provision of the Agreement "suggest[s] a limited scope of application for the GATS": "In addressing this issue, we note that Article I:1 of the GATS provides that '[t]his Agreement applies to measures by Members affecting trade in services'. In our view, the use of the term 'affecting' reflects the intent of the drafters to give a broad reach to the GATS. The ordinary meaning of the word 'affecting' implies a measure that has 'an effect on', which indicates a broad scope of application. This interpretation is further reinforced by the conclusions of previous panels that the term 'affecting' in the context of Article III of the GATT is wider in scope than such terms as 'regulating' or 'governing'. ... We also note that Article I:3(b) of the GATS provides that ' 'services' includes any service in any sector except services supplied in the exercise of governmental authority' (emphasis added), and that Article XXVIII(b) of the GATS provides that the ' 'supply of a service' includes the production, distribution, marketing, sale and delivery of a service'. There is nothing at all in these provisions to suggest a limited scope of application for the GATS. ... For these reasons, we uphold the Panel's finding that there is no legal basis for an a priori exclusion of measures within the EC banana import licensing regime from the scope of the GATS."(6) 6. In Canada - Autos, the Panel reiterated the statement of the Panel on EC - Bananas III that Article I of the GATS does not a priori exclude any measure from the scope of application of the Agreement. The Panel on Canada - Autos then went on to state that a determination of whether the measures at issue in the case before it were measures "affecting trade in services" within the meaning of Article I of GATS, "should be done on the basis of the determination of whether these measures constitute less favourable treatment for the services and service suppliers of some Members as compared to those of others (Article II) and/or for services and service suppliers of other Members as compared to domestic ones (Article XVII)."(7) The Appellate Body reversed this finding, holding that whether a measure "affects" trade in services must be assessed before any further consistency of this measure with other GATS provision is considered: "[T]he fundamental structure and logic of Article I:1, in relation to the rest of the GATS, require that determination of whether a measure is, in fact, covered by the GATS must be made before the consistency of that measure with any substantive obligation of the GATS can be assessed.
Article II:1 of the GATS states expressly that it applies only to "any measure covered by this Agreement". This explicit reference to the scope of the GATS confirms that the measure at issue must be found to be a measure "affecting trade in services" within the meaning of Article I:1, and thus covered by the GATS, before any further examination of consistency with Article II can logically be made. We find, therefore, that the Panel should have inquired, as a threshold question, into whether the measure is within the scope of the GATS by examining whether the import duty exemption is a measure "affecting trade in services" within the meaning of Article I. In failing to do so, the Panel erred in its interpretative approach.
...
[W]e believe that at least two key legal issues must be examined to determine whether a measure is one "affecting trade in services": first, whether there is "trade in services" in the sense of Article I:2; and, second, whether the measure in issue "affects" such trade in services within the meaning of Article I:1."(8) 7. After rejecting the notion that the question whether a measure "affected" trade in services could be ascertained by examining whether such a measure violated Article II or Article XVII of GATS, the Appellate Body in Canada - Autos then indicated the criteria which it considered relevant for determining whether a measure "affected" trade in services: "[T]he Panel ... never examined whether or how the import duty exemption affects wholesale trade service suppliers in their capacity as service suppliers. Rather, the Panel simply stated:
'Like the measures at issue in the EC - Bananas III case, the import duty exemption granted only to manufacturer beneficiaries bears upon conditions of competition in the supply of distribution services, regardless of whether it directly governs or indirectly affects the supply of such services.(9) (emphasis added)'
We do not consider this statement of the Panel to be a sufficient basis for a legal finding that the import duty exemption 'affects' wholesale trade services of motor vehicles as services, or wholesale trade service suppliers in their capacity as service suppliers. The Panel failed to analyze the evidence on the record relating to the provision of wholesale trade services of motor vehicles in the Canadian market. It also failed to articulate what it understood Article I:1 to require by the use of the term 'affecting'. Having interpreted Article I:1, the Panel should then have examined all the relevant facts, including who supplies wholesale trade services of motor vehicles through commercial presence in Canada, and how such services are supplied. It is not enough to make assumptions. Finally, the Panel should have applied its interpretation of 'affecting trade in services' to the facts it should have found.
The European Communities and Japan may well be correct in their assertions that the availability of the import duty exemption to certain manufacturer beneficiaries of the United States established in Canada, and the corresponding unavailability of this exemption to manufacturer beneficiaries of Europe and of Japan established in Canada, has an effect on the operations in Canada of wholesale trade service suppliers of motor vehicles and, therefore, 'affects' those wholesale trade service suppliers in their capacity as service suppliers. However, the Panel did not examine this issue. The Panel merely asserted its conclusion, without explaining how or why it came to its conclusion. This is not good enough."(10) 3. Relationship Between GATT and GATS 8. In Canada - Periodicals, the Panel, in a finding subsequently not addressed by the Appellate Body, rejected the argument by Canada that Article III of GATT 1994 does not apply to a measure which is within the purview of the GATS: "Canada's argument is essentially that since Canada has made no specific commitments for advertising services under GATS, the United States should not be allowed to 'obtain benefits under a covered agreement that have been expressly precluded under another covered agreement'. ... Put another way, Canada seems to argue that if a Member has not undertaken market-access commitments in a specific service sector, that non-commitment should preclude all the obligations or commitments undertaken in the goods sector to the extent that there is an overlap between the non-commitment in services and the obligations or commitments in the goods sector. Canada claims that because of the existence of the two instruments - GATT 1994 and GATS - both of which may apply to a given measure, 'it is necessary to interpret the scope of application of each such as to avoid any overlap'.
We are not fully convinced by Canada's characterization of the Excise Tax as a measure intended to regulate trade in advertising services, in view of the fact that there is no comparable regulation on advertisements through other media and the fact that the tax is imposed on a "per issue" basis. However, assuming that Canada intended to carve out Part V.1 of the Excise Tax Act from the coverage of its GATS commitments by not inscribing advertising services in its Schedule..., does that exonerate Canada from the Panel's scrutiny regarding the alleged violation of its obligations and commitments under GATT 1994?
In order to answer this question, we need to examine the structure of the WTO Agreement including its annexes. Article II:2 of the WTO Agreement is the relevant provision, which reads as follows:
'The agreements and associated legal instruments included in Annexes 1, 2 and 3 ... are integral parts of this Agreement, binding on all Members' ... ."(11) 9. Recalling the principle of effective treaty interpretation, the Panel then found that "obligations under GATT 1994 and GATS can co-exist and that one does not override the other": "According to Article 31(1) of the 1969 Vienna Convention on the Law of Treaties ('Vienna Convention'), a treaty must be interpreted in good faith in accordance with the ordinary meaning to be given to the terms of the treaty in their context and in the light of its object and purpose. Furthermore, as the Appellate Body has repeatedly pointed out, 'one of the corollaries of the 'general rule of interpretation' in the Vienna Convention is that interpretation must give meaning and effect to all the terms of the treaty. An interpreter is not free to adopt a reading that would result in reducing whole clauses or paragraphs of a treaty to redundancy or inutility.'...(12) The ordinary meaning of the texts of GATT 1994 and GATS as well as Article II:2 of the WTO Agreement, taken together, indicates that obligations under GATT 1994 and GATS can co-exist and that one does not override the other. If the consequences suggested by Canada were intended, there would have been provisions similar to Article XVI:3 of the WTO Agreement or the General Interpretative Note to Annex 1A in order to establish hierarchical order between GATT 1994 and GATS. The absence of such provisions between the two instruments implies that GATT 1994 and GATS are standing on the same plain in the WTO Agreement, without any hierarchical order between the two."(13) 10. The Panel on Canada - Periodicals finally rejected the notion that overlaps between the subject-matter of GATT 1994 and GATS should be avoided. Rather, it noted that certain types of services have long been associated with GATT disciplines, as evidenced, inter alia, by certain GATT Panel Reports: "In this connection, Canada also argues that overlaps between GATT 1994 and GATS should be avoided. ... We disagree. Overlaps between the subject matter of disciplines in GATT 1994 and in GATS are inevitable, and will further increase with the progress of technology and the globalization of economic activities. We do not consider that such overlaps will undermine the coherence of the WTO system. In fact, certain types of services such as transportation and distribution are recognized as a subject-matter of disciplines under Article III:4 of GATT 1994. It is also noteworthy in this respect that advertising services have long been associated with the disciplines under GATT Article III. As early as 1970, the Working Party on Border Tax Adjustment made the following observation:
'The Working Party noted that there was a divergence of views with regard to the eligibility for adjustment of certain categories of tax and that these could be sub-divided into
(a) 'Taxes occultes' which the OECD defined as consumption taxes on capital equipment, auxiliary materials and services used in the transportation and production of other taxable goods. Taxes on advertising, energy, machinery and transport were among the more important taxes which might be involved. ... ;
(b) Certain other taxes, ...'...(14)
We also note that there are several adopted panel reports that examined the issue of services in the context of GATT Article III. For instance, the panel on Canada - Import, Distribution and Sale of Certain Alcoholic Drinks by Provincial Marketing Agencies addressed the issues of access to points of sale and restrictions on private delivery of beer. ... The panel on United States - Measures Affecting Alcoholic and Malt Beverages also dealt with the issues of distribution of wine and beer. ... More to the point, the panel on Thailand - Restrictions on Importation of and Internal Taxes on Cigarettes specifically addressed the question of advertising ...
In any event, since Canada admits that in the present case there is no conflict between its obligations under GATS and under GATT 1994..., there is no reason why both GATT and GATS obligations should not apply to the Excise Tax Act. Thus, we conclude that Article III of GATT 1994 is applicable to Part V.1 of the Excise Tax Act."(15) 11. On appeal, the Appellate Body in Canada - Periodicals did not find it necessary "to pronounce on the issue of whether there can be potential overlaps between the GATT 1994 and the GATS, as both participants agreed that it is not relevant in this appeal." The Appellate Body then held that the Canadian measure at issue, as an excise tax on certain periodicals, clearly applied to goods. The Appellate Body subsequently examined the measure under Article III:2 of GATT 1994.(16) 12. While in Canada - Periodicals the Appellate Body did not find it necessary to pronounce on the question whether there could be overlaps between the scope of application of GATT 1994 and GATS, in EC - Bananas III the Appellate Body confirmed the approach of the Panel on Canada - Periodicals. The Appellate Body rejected the notion that the GATT 1994 and GATS are "mutually exclusive agreements" and held that there was a "category of measures that could be found to fall within the scope of both the GATT 1994 and the GATS": "The second issue is whether the GATS and the GATT 1994 are mutually exclusive agreements. The GATS was not intended to deal with the same subject matter as the GATT 1994. The GATS was intended to deal with a subject matter not covered by the GATT 1994, that is, with trade in services. Thus, the GATS applies to the supply of services. It provides, inter alia, for both MFN treatment and national treatment for services and service suppliers. Given the respective scope of application of the two agreements, they may or may not overlap, depending on the nature of the measures at issue. Certain measures could be found to fall exclusively within the scope of the GATT 1994, when they affect trade in goods as goods. Certain measures could be found to fall exclusively within the scope of the GATS, when they affect the supply of services as services. There is yet a third category of measures that could be found to fall within the scope of both the GATT 1994 and the GATS. These are measures that involve a service relating to a particular good or a service supplied in conjunction with a particular good. In all such cases in this third category, the measure in question could be scrutinized under both the GATT 1994 and the GATS. However, while the same measure could be scrutinized under both agreements, the specific aspects of that measure examined under each agreement could be different. Under the GATT 1994, the focus is on how the measure affects the goods involved. Under the GATS, the focus is on how the measure affects the supply of the service or the service suppliers involved. Whether a certain measure affecting the supply of a service related to a particular good is scrutinized under the GATT 1994 or the GATS, or both, is a matter that can only be determined on a case-by-case basis. This was also our conclusion in the Appellate Body Report in Canada - Periodicals."(17)
Part II: General Obligations and Disciplines
III. Article II back to top Article II: Most Favoured-Nation Treatment 1. With respect to any measure covered by this Agreement, each Member shall accord immediately and unconditionally to services and service suppliers of any other Member treatment no less favourable than that it accords to like services and service suppliers of any other country.
2. A Member may maintain a measure inconsistent with paragraph 1 provided that such a measure is listed in, and meets the conditions of, the Annex on Article II Exemptions.
3. The provisions of this Agreement shall not be so construed as to prevent any Member from conferring or according advantages to adjacent countries in order to facilitate exchanges limited to contiguous frontier zones of services that are both locally produced and consumed.
(a) Measures relating to judicial and administrative assistance 13. At its meeting of 1 March 1995, the Council for Trade in Services agreed to adopt the following conclusion of the Sub-Committee on Services concerning measures relating to judicial and administrative assistance:(18) "At the end of the Uruguay Round it had been agreed by participants that Article II of the GATS (MFN) would not apply to measures relating to judicial and administrative assistance. This agreement was reflected in document MTN.GNS/W/177/Rev.1/Add.1 which states:
'It is agreed by participants that the provisions of Article II (Most-Favoured National Treatment) do not apply to measures relating to judicial and administrative assistance. In the light of this agreement, the former footnote to Article II has been deleted.'
The agreement was based on the view that discrimination between service suppliers of different Members arising from judicial and administrative assistance measures, apart from what is already stipulated by the provisions of the GATS, would not have any significant effect on conditions of competition between service suppliers. In the subsequent consultations it was agreed that the same logic could be applied to the whole of the GATS and that therefore none of the provisions of the GATS would apply to such measures."(19) 14. With respect to the application of Article III 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.(20) 15. In Canada - Autos, the Appellate Body explained how a Panel should proceed when examining the consistency of a measure with Article II:1 of the GATS: After determining whether the measure under examination affects trade in services, the examiner should make "factual findings as to treatment of wholesale trade services and service suppliers of motor vehicles of different Members commercially present" and, as the last step, apply Article II:1 to these facts: "The wording of this provision suggests that analysis of the consistency of a measure with Article II:1 should proceed in several steps. First, as we have seen, a threshold determination must be made under Article I:1 that the measure is covered by the GATS. This determination requires that there be 'trade in services' in one of the four modes of supply, and that there be also a measure which 'affects' this trade in services. We have already held that the Panel failed to undertake this analysis.
If the threshold determination is that the measure is covered by the GATS, appraisal of the consistency of the measure with the requirements of Article II:1 is the next step. The text of Article II:1 requires, in essence, that treatment by one Member of 'services and services suppliers' of any other Member be compared with treatment of 'like' services and service suppliers of 'any other country'. Based on these core legal elements, the Panel should first have rendered its interpretation of Article II:1. It should then have made factual findings as to treatment of wholesale trade services and service suppliers of motor vehicles of different Members commercially present in Canada. Finally, the Panel should have applied its interpretation of Article II:1 to the facts as it found them."(21) 16. The Appellate Body in Canada - Autos subsequently disapproved of the Panel's application of Article II of GATS to the facts in the case before it. Specifically, the Appellate Body objected to what it considered to be the Panel's assumption that the application of an import duty exemption to manufacturers automatically affected "competition among wholesalers in their capacity as service suppliers": "Clearly, here the Panel is confusing the application of the import duty exemption to manufacturers with its possible effect on wholesalers. In our view, the Panel has conducted a 'goods' analysis of this measure, and has simply extrapolated its analysis of how the import duty exemption affects manufacturers to wholesale trade service suppliers of motor vehicles. The Panel surmised, without analyzing the effect of the measure on wholesalers as service suppliers, that the import duty exemption, granted to a limited number of manufacturers, ipso facto affects conditions of competition among wholesalers in their capacity as service suppliers. As we stated earlier in respect of whether the measure at issue 'affects trade in services', the Panel failed to demonstrate how the import duty exemption granted to certain manufacturers, but not to other manufacturers, affects the supply of wholesale trade services and the suppliers of wholesale trade services of motor vehicles. In reaching its conclusions under Article II:1 of the GATS, the Panel has neither assessed the relevant facts - we see no analysis of any evidence relating to the supply of wholesale trade services of motor vehicles - nor has it interpreted Article II of the GATS and applied that interpretation to the facts it found."(22) (a) "no less favourable treatment" 17. In EC - Bananas III, the European Communities argued that Article II of GATS did not cover de facto discrimination; the European Communities claimed that if the drafters of the GATS had wished to make the "modification of competitive conditions" requirement an integral part of the "no less favourable treatment" test under the most-favoured-nation clause, they would have done so explicitly. The Panel rejected this argument, noting that Article XVII "is meant to provide for no less favourable conditions of competition regardless of whether that is achieved through the application of formally identical or formally different measures ... The absence of similar language in Article II is not, in our view, a justification for giving a different ordinary meaning in terms of Article 31(1) of the Vienna Convention to the words 'treatment no less favourable', which are identical in both Articles II:1 and XVII:1."(23) The Panel also opined that "if the standard of 'no less favourable treatment' in Article II were to be interpreted narrowly to require only formally identical treatment, that could lead in many situations to the frustration of the objective behind Article II which is to prohibit discrimination between like services and service suppliers of other Members".(24) The Appellate Body did not agree with this reasoning of the Panel, but reached the same conclusion as regards the applicability of Article II of GATS to de facto discrimination: "We find the Panel's reasoning on this issue to be less than fully satisfactory. The Panel interpreted Article II of the GATS in the light of panel reports interpreting the national treatment obligation of Article III of the GATT. The Panel also referred to Article XVII of the GATS, which is also a national treatment obligation. But Article II of the GATS relates to MFN treatment, not to national treatment. Therefore, provisions elsewhere in the GATS relating to national treatment obligations, and previous GATT practice relating to the interpretation of the national treatment obligation of Article III of the GATT 1994 are not necessarily relevant to the interpretation of Article II of the GATS. The Panel would have been on safer ground had it compared the MFN obligation in Article II of the GATS with the MFN and MFN-type obligations in the GATT 1994.
Articles I and II of the GATT 1994 have been applied, in past practice, to measures involving de facto discrimination. ...
The GATS negotiators chose to use different language in Article II and Article XVII of the GATS in expressing the obligation to provide 'treatment no less favourable'. The question naturally arises: if the GATS negotiators intended that 'treatment no less favourable' should have exactly the same meaning in Articles II and XVII of the GATS, why did they not repeat paragraphs 2 and 3 of Article XVII in Article II? But that is not the question here. The question here is the meaning of 'treatment no less favourable' with respect to the MFN obligation in Article II of the GATS. There is more than one way of writing a de facto non-discrimination provision. Article XVII of the GATS is merely one of many provisions in the WTO Agreement that require the obligation of providing 'treatment no less favourable'. The possibility that the two Articles may not have exactly the same meaning does not imply that the intention of the drafters of the GATS was that a de jure, or formal, standard should apply in Article II of the GATS. If that were the intention, why does Article II not say as much? The obligation imposed by Article II is unqualified. The ordinary meaning of this provision does not exclude de facto discrimination. Moreover, if Article II was not applicable to de facto discrimination, it would not be difficult - and, indeed, it would be a good deal easier in the case of trade in services, than in the case of trade in goods - to devise discriminatory measures aimed at circumventing the basic purpose of that Article.
For these reasons, we conclude that 'treatment no less favourable' in Article II:1 of the GATS should be interpreted to include de facto, as well as de jure, discrimination. We should make it clear that we do not limit our conclusion to this case. We have some difficulty in understanding why the Panel stated that its interpretation of Article II of the GATS applied 'in casu'."(25) 18. In Canada - Autos, Canada argued that it was not possible to establish whether treatment no less favourable had been granted or not, due to vertical integration and exclusive distribution arrangements existing in the motor vehicle industry between manufacturers and wholesale trade service suppliers; Canada argued that these circumstances excluded any actual or potential competition at the wholesale trade level. The Panel found that these factual elements did not rule out the possibility of less favourable treatment: "We therefore find that vertical integration and exclusive distribution arrangements between manufacturers and wholesalers in the motor vehicle industry do not rule out the possibility that treatment less favourable may be granted to suppliers of wholesale trade services for motor vehicles. We also find that vertical integration and exclusive distribution arrangements do not preclude potential competition among wholesalers for the procurement of vehicles from manufacturers and actual inter-brand competition for sales to retailers."(26) (b) "like services and service suppliers" 19. The Panel on EC - Bananas III, in a finding subsequently not reviewed by the Appellate Body, addressed the issue of likeness under Article II: "[I]n our view, the nature and the characteristics of wholesale transactions as such, as well as of each of the different subordinated services mentioned in the headnote to section 6 of the CPC, are 'like' when supplied in connection with wholesale services, irrespective of whether these services are supplied with respect to bananas of EC and traditional ACP origin, on the one hand, or with respect to bananas of third-country or non-traditional ACP origin, on the other. Indeed, it seems that each of the different service activities taken individually is virtually the same and can only be distinguished by referring to the origin of the bananas in respect of which the service activity is being performed. Similarly, in our view, to the extent that entities provide these like services, they are like service suppliers."(27) 20. The Panel on Canada - Autos reiterated this approach: "We agree that to the extent that the service suppliers concerned supply the same services, they should be considered 'like' for the purpose of this case."(28) 21. In EC - Bananas III, the Appellate Body rejected the application of the so-called "aims and effects" test which had been previously adopted by several GATT panels in interpreting GATT Article III, to the national treatment requirement contained in Article II or Article VII of GATS. See paragraph 64 below. 22. With respect to the "aims and effects" test under GATT Article III, see Chapter on GATT, paragraphs 106-111. (a) Annex on Article II Exemptions 23. See Section XXXIV.B. (b) Exemptions in financial services 24. With respect to exemptions from Article II of GATS concerning financial services, see the Fifth Protocol to the GATS,(29) adopted by the Committee on Trade in Financial Services on 14 November 1997.(30) See also paragraph 74 below. (c) Exemptions in maritime transport services 25. With respect to this issue, see the Decision on Maritime Transport Services adopted by the Council for Trade in Services at its meeting of 28 June 1996, which suspends negotiations on maritime transport services; the Decision further states that such negotiations will resume with "the commencement of comprehensive negotiations on Services" and that Article II of GATS will enter into force with respect to "international shipping, auxiliary services and access to and use of port facilities" when these negotiations have been concluded.(31) A Special Session of the Council for Trade in Services formally launched the new negotiations on services on Friday 25 February 2000.(32) (d) Exemptions in basic telecommunications 26. With respect to this issue, see the Fourth Protocol to the GATS, adopted by the Council for Trade in Services at its meeting of 30 April 1996.(33)
IV. Article III back to top Article III: Transparency 1. Each Member shall publish promptly and, except in emergency situations, at the latest by the time of their entry into force, all relevant measures of general application which pertain to or affect the operation of this Agreement. International agreements pertaining to or affecting trade in services to which a Member is a signatory shall also be published.
2. Where publication as referred to in paragraph 1 is not practicable, such information shall be made otherwise publicly available.
3. Each Member shall promptly and at least annually inform the Council for Trade in Services of the introduction of any new, or any changes to existing, laws, regulations or administrative guidelines which significantly affect trade in services covered by its specific commitments under this Agreement.
4. Each Member shall respond promptly to all requests by any other Member for specific information on any of its measures of general application or international agreements within the meaning of paragraph 1. Each Member shall also establish one or more enquiry points to provide specific information to other Members, upon request, on all such matters as well as those subject to the notification requirement in paragraph 3. Such enquiry points shall be established within two years from the date of entry into force of the Agreement Establishing the WTO (referred to in this Agreement as the "WTO Agreement"). Appropriate flexibility with respect to the time-limit within which such enquiry points are to be established may be agreed upon for individual developing country Members. Enquiry points need not be depositories of laws and regulations.
5. Any Member may notify to the Council for Trade in Services any measure, taken by any other Member, which it considers affects the operation of this Agreement.(34)
27. With respect to the applicability of Article III 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.(35) 28. With respect to transparency in domestic regulations in the field of accountancy services, see the Disciplines on Domestic Regulation in the Accountancy Sector, adopted by the Council for Trade in Services at its meeting of 14 December 1998.(36) 29. On 1 March 1995, the Council for Trade in Service approved the "Guidelines for Notifications under the General Agreement on Trade in Services".(37) 30. On 28 May 1996, the Council for Trade in Services adopted the "Decision on the Notification of the Establishment of Enquiry and Contact Points", which calls upon Members to notify the establishment of enquiry points pursuant to Paragraph 4 of Article III.(38)
V. Article III bis back to top Article III bis: Disclosure of Confidential Information Nothing in this Agreement shall require any Member to provide confidential information, the disclosure of which would impede law enforcement, or otherwise be contrary to the public interest, or which would prejudice legitimate commercial interests of particular enterprises, public or private.
No jurisprudence or decision of a competent WTO body.
Footnotes: 1 S/C/M/1,
paras. 14-15. back to text |
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