Professional Services and the GATS Impact of the WTO multilateral liberalization of trade in...
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Transcript of Professional Services and the GATS Impact of the WTO multilateral liberalization of trade in...
Professional Services and the GATS
Impact of the WTO multilateral liberalization of trade in services on professional services
Hamid Mamdouh, February 2004
GATS Commitments on Professional Services
(number of schedules)
Engineering Services 58
Accounting, Auditing and Bookkeeping 56
Architectural Services 50
Legal Services 45
Taxation Services 34
Integrated Engineering Services 32
Urban Planning and Landscape Architecture 33
Medical and Dental Services 38
Veterinary Services 26
Midwives, Nurses, Physiotherapists 15
Trade Barriers &Domestic Regulation
Market Access (Article XVI)
– quantitative restrictions
National Treatment (Article XVII)
– discriminatory measures
Domestic Regulation (Article VI)
– qualitative requirements - regulatory autonomy of Members subject to GATS rules aimed at minimising trade restrictive effects (Article VI:1&4)
Trade in professional services
Cross-border supply– Legal advice over the Internet
Consumption abroad– Legal services received in other countries
or over the Internet
Commercial presence– Foreign offices of law firms
Movement of natural persons– Lawyers practising abroad individually or through
an established foreign law firm
Ministerial Decision on Professional Services
April 1995 Established the Working Party on
Professional Services (WPPS) Required the immediate implementation of
GATS Article VI:4 Gave priority to the accountancy sector (i.e
as a “test case”)
WPPS Work on Accountancy
Mandate under the Ministerial Declaration had
three parts:
– 1) Establishment of guidelines for the
recognition of qualifications;
– 2) Concentration on the use of
international standards;
– 3) Development of disciplines on
domestic regulation.
Creation of MRA Guidelines
28 May, 1997: WTO Council for Trade in
Services adopted the voluntary Guidelines for
Mutual Recognition Agreements in the
Accountancy Sector.
In addition to a reminder of Article VII
notification requirements, the Guidelines give
recommendations on the form and content of
MRAs in accountancy.
Development of Disciplines
14 December, 1998: WTO Council for Trade in Services adopted the mandatory Disciplines on Domestic Regulation in the Accountancy Sector
Applicable to Members with specific commitments in accountancy
No immediate legal effect Standstill provision applicable to all WTO
Members
Disciplines on Domestic Regulation in Accountancy - in Brief
Do not address measures subject to scheduling under Articles XVI and XVII of the GATS
Necessity test
To ensure that measures are not more trade-restrictive than necessary to fulfil a legitimate objective. Legitimate objectives are, inter alia, the protection of consumers, the quality of the service, professional competence, and the integrity of the profession
Accountancy Disciplines - in Brief (Cont.)Transparency
• provide information on competent authorities
• provide information on activities regulated, licensing requirements and procedures, qualification requirements and procedures; and technical standards
• inform the rationale behind measures in relation to legitimate objectives (upon request)
• endeavour to provide opportunity for prior comment before adoption of new measures
Licensing requirements • consideration of less trade-restrictive alternatives to residency requirements
• fees charged shall reflect administrative costs
Licensing procedures • authorities shall not require more documentation than strictly necessary
• prompt acknowledgement of receipt of applications
Accountancy Disciplines - in Brief (Cont.)
Qualification requirements:
• account to be taken of qualifications acquired in the territory of another Member
Qualification procedures:
• verification of an applicant's qualifications within a reasonable time-frame
Technical standards: • must fulfil legitimate objectives
Accountancy Disciplines in Brief (Cont.)
Applicability to Other Professional Services?
Accounting, Auditing and Bookkeeping
Taxation Services
Legal Services
Architectural Services
Engineering Services
Integrated Engineering Services
Urban Planning and Landscape Architecture
Medical and Dental Services
Veterinary Services
Midwives, Nurses, Physiotherapists
Negotiating Proposals in the CTS Special Session (as of Feb. 2004)
Norway’s proposal on Business Services includes some professional services
Seven general proposals on Professional Services: Canada, Chile, Columbia, EC, Japan, Kenya and Switzerland
Two proposals on Legal Services: Australia and the U.S.
Two proposals on Accountancy Services: Australia and the U.S.
One proposal on Architectural Services: Australia One proposal on Engineering Services: Australia
Negotiating Proposals in the CTS: Issues Raised in Professional Services National treatment and market access: seek
improvements in the quantity and quality of commitments. Seek the elimination of nationality and citizenship requirements, and alternatives to permanent residency requirements.
Facilitating entry under mode 4: seek improvements in the coverage for the temporary entry and stay of foreign professionals.
Recognition of credentials: encourage the recognition of foreign qualifications and the development of mutual recognition agreements.
Domestic Regulation: continue develop general disciplines with the possibility of developing specific disciplines for individual professions. Work on regulatory issues should be based on international standards.
Number of Offers by Sector(as of January 2004)
0
5
10
15
20
25
30
35
Sectors
Num
ber o
f Offe
rs
Developed
Developing and in Transition
Types of Improvements, per SectorProfessional Services
Jan. 2004
0123456789
Sectors
Num
ber o
f offe
rs
New commitments
Improvements to existing
74
39
72
25
67
5164
33
60
15
Full Commitment Cross Border Supply
Can Professional Servicesgo on line?
GATS Commitments(by number of governments)