FTAA - Free Trade Area of the Americas
Chapter on Services
Article 1: SCOPE [OF APPLICATION] 1,
2, 3, 4
[1.1. This chapter applies to measures [adopted or maintained] by a Party [relating to] [affecting]] [cross-border] trade in services [by] service providers/suppliers of another Party, [including measures respecting] [Such measures include [but are not limited to measures affecting]]:
a) the production, distribution, marketing, sale, and delivery of a service;
[1.1. This chapter applies to measures adopted by Parties [directly] affecting trade in services.]
b) the purchase or use of, or payment for, a service;
[c) the access to and use of [distribution and transportation systems] [distribution, transport, [or] [and] telecommunications networks and services] in connection with the provision/supply of a service;]
[d) the presence[, including commercial presence,] in its territory of a service provider of another Party; and,]
e) the provision of a bond or other form of financial security as a condition for the provision of a service.
[f) access to and use of services required by the Parties to be offered to the general public to supply a service.]]
[1.1. This Chapter shall apply to all measures adopted by the Parties that affect trade in services, in all sectors and in all the different modes of supply, including those stemming from the delivery of commercial services by the public sector, at the national, federal, regional or local levels, as well as those stemming from bodies in the exercise of powers delegated by the national, federal, regional or local government.]
[1.2.5 For the purposes of this chapter, cross-border trade in services or cross-border supply of services [shall be defined as] [means] the supply of a service:
However, it does not include the [delivery] [provision]** of a service in the territory of a Party [through] [by] an
investment6 in that territory.]
a) from the territory of one Party into the territory of another Party;
b) in the territory of one Party [by [a] person[s] of that Party to [a] person[s] of another Party] [to the consumer of another Party]; or
c) by [natural persons] [a national] of a Party in the territory of another Party.
[1.2. For purposes of this Chapter, trade in services is defined as the delivery of a service:
[1.3. For [the] purposes of this Chapter:
a) from the territory of a 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 any other Party;
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.]
[1.4. In fulfilling its obligations and commitments under this Chapter, each Party shall take [the necessary][such reasonable] measures as may be available to it to [secure][ensure] their observance by [state, provincial, departmental, municipal or][regional and] local governments and authorities and by non-governmental bodies [within][in] its territory.]
a) “measures [that a Party adopts or maintains] [adopted [or maintained]] [by a Party] [by the Parties]” means [any provision], [measures] [adopted [or maintained]] [whether in the form of a law, decree, regulation, rule, procedure, decision, administrative order, or any other
form]7 [having an effect on trade in services], [adopted] [taken] by:
i) [central, regional, or local governments and authorities][[the] [governments and ][[central], [regional]] [national or federal, [or] state [or] [provincial,]] [departmental, municipal or local authorities]], [or] [and]
ii) [the] [non-governmental] [bodies] [or] [the] [organizations] [in the exercise of] [regulatory, administrative or other powers of a governmental nature that have been delegated to them] [powers delegated [to them]] by [central, regional, or local] governments [or][and] [central, regional, or local] [authorities]] [mentioned in] [subparagraph a) above] [subparagraph (i)].]
[1.5. For [the] purposes of this Chapter:
[a) The term “services” includes any service of any sector, except services supplied in the exercise of governmental authority;]
[1.6. References to [central or] national [or federal], state, [regional] provincial [or departmental, municipal or local] governments [and authorities] include non-governmental entities that perform regulatory or administrative functions or other functions of a governmental nature delegated to them by such governments [or authorities].]
[b) 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 providers[, including activities undertaken by a Central Bank or a monetary or an exchange authority [or by any other public entity]].]]
[1.7. For developing countries and, particularly, the smaller economies, there shall be flexibility in meeting the commitments, and special conditions of treatment shall be given to promote the balanced growth of the Parties and facilitate their increasing participation in trade in services in the Hemisphere.]
[1.8. This chapter does not apply to:
[a) the cross-border trade in financial services;]
b) air services, including domestic and international air transportation services, whether scheduled or nonscheduled, and related services in support of air services, other than:
i) aircraft repair and maintenance services during which an aircraft is withdrawn from service;
[ii) specialty air services; and,
iii) computerized reservations systems.]
c) [government procurement by a Party or a state enterprise;] [government procurement by a
[d) [subsidies or grants provided by a Party or a state enterprise, including government-supported loans, guarantees, and insurance.] [promotional or development measures granted by one Party or by a State enterprise, including loans, guarantees, insurance, grants and tax incentives granted by governments of the Parties;]]
[e) the services or functions of government, such as law enforcement, correctional services, pensions [or unemployment insurance or social security] [income security or insurance, social security or insurance,], social welfare, public education, public training, health, or [child care] [child care or protection].]
[f) services supplied in the exercise of governmental authority. 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.]]
[1.8. This Chapter does not apply to:
[1.9. [Nothing in this chapter shall be construed to] [This Chapter does not]:
a) those services supplied in the exercise of governmental authority, on a non-commercial basis.
b) measures related to certain air transport services.]
[a) impose* any obligation on a Party with respect to a national of another Party seeking access to its employment market, or employed on a permanent basis in its territory, or to confer any right on that national with respect to that access* or employment[; or,] [,]
[1.10. Notwithstanding paragraph [1.9 b)] [1.8.e)], whether a service provider of a Party, duly authorized, provide services or performs a governmental function such as correctional services, pension or unemployment insurance or social security services, social welfare, public education, public training, health, and child care or child protection, in the territory of another Party, the provision of those services shall be protected by the provisions of this chapter.]
[b) prevent a Party from providing a service or performing a function such as law enforcement, correctional services, pension or unemployment insurance or social security services, social welfare, public education, public training, health, and child protection.] [or]
[c) impose* any obligation or grant any right to a Party, with respect to government procurement made by the other Party.]]
[1.11. With respect to the non-governmental bodies cited in sub-paragraph a) ii) of paragraph 1.3 of this article, which perform regulatory, administrative or other governmental functions delegated pursuant to the legislation of each Party, the central government shall take such reasonable measures as may be available to it to secure the compliance of these organizations with the provisions of this chapter.]
[1.12. The provisions of this chapter shall apply to measures related to services envisaged in the annex on Temporary Movement of Natural Persons, solely to the extent and within the time limits stipulated in that annex.]
Article 2: SECTORAL COVERAGE1
[2.1. This Chapter shall, in principle, have universal coverage of all service sectors.]
[2.1. The comprehensiveness of the coverage shall be linked to the extent and rate at which the modes of supply for the provision of services are liberalized. In this regard, special attention shall be given to the particular interests of smaller economies in liberalizing those sectors and modes important to the facilitation of their development needs.]
[2.2. Special disciplines shall be established for determined services sectors whose particular characteristics so require them.]
[2.3. No provision of this Chapter shall be construed to prevent a Party from having the right to regulate and to introduce new regulations to achieve legitimate domestic political objectives.]
[2.4. This Chapter shall not apply to the following service sectors:
Article 3: MOST FAVORED NATION TREATMENT
[3.1. Each Party shall [immediately and unconditionally] accord to [services and] service providers/suppliers of another Party treatment no less favorable than that it accords, [in like circumstances], to [like] [services] [and] [like] service providers/suppliers of any other Party or of a non-Party.]
[3.1. With respect to the measures covered by this Chapter, each Party shall immediately and unconditionally accord to the services and service providers of any other Party treatment no less favorable than that it accords to [like][similar]** services and [like][similar] ** service providers of any other Party or of third countries.]
[3.2. The provisions of this Chapter shall not be construed to* prevent a Party from conferring or according advantages to adjacent countries in order to* facilitate the exchange, limited to contiguous frontier zones, of services that are locally produced and consumed.]
[3.2. Without prejudice to the provisions of the preceding paragraph, any Party may confer or accord advantages to adjacent countries and smaller economies, regardless of whether they are Parties, in order to facilitate the exchange of services.]
[3.3. The developing countries may maintain exemptions from the principle embodied in paragraph 3.1.]
[3.3. Smaller economies and developing countries may identify exceptions to the MFN principle for specific sectors.]
[3.3. A Party may maintain a measure inconsistent with paragraph 3.1, provided that the measure is simultaneously listed in the Annex on Article II Exemptions of GATS and in the Annex on Exemptions to this paragraph.]
[3.4. The FTAA can coexist with bilateral and sub-regional agreements, to the extent that the rights and obligations under these agreements are not covered by or go beyond the rights and obligations of the FTAA.]
[3.5. The principle embodied in paragraph 3.1 shall be applicable in all cases to agreements reached between Parties and non-Party third countries.]
[3.6. This Chapter shall not prevent any of its Parties from being a party to or entering into of an agreement liberalizing trade in services between the parties to such an agreement, provided that such agreement:
a) has substantial sectoral coverage1, and
b) provides for the absence or elimination of substantially all discrimination between the parties, in the sense of Article ( ), in the sectors covered under sub-paragraph (a), through:
[3.6. This Chapter shall not prevent Parties from entering into or being party to agreements in pursuit of liberalizing trade in services or wider economic integration at the sub-hemispheric level.]
i) the 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 pursuant to Articles ( ). ]
[3.7. In evaluating whether the conditions in paragraph 3.6(b) are met, consideration may be given to the relationship of the agreement to a wider process of economic integration or trade liberalization between the countries concerned.]
[3.8. (a) When [a smaller economy is a party][developing countries are parties] to an agreement of the type [mentioned][referred to] in paragraph 3.6, flexibility shall be provided for regarding [the requirement of substantial liberalization][the conditions set out in said paragraph, particularly with reference to sub-paragraph (b) thereof], in accordance with [their][the] level of development [and national economic objectives] [of the countries concerned, both overall and in individual sectors and subsectors];
Notwithstanding paragraph 3.11, in the case of an agreement of the type referred to in paragraph 3.6 involving only developing countries, more favorable treatment may be granted to juridical persons owned or controlled by natural persons of the Parties to such an agreement.]
[3.9. Any agreement referred to in paragraph 3.6 shall be designed to facilitate trade between the parties to the agreement, and shall not in respect of any Party 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.]
[3.10.2 If, in the conclusion, enlargement, or any significant modification of any agreement under paragraph 3.6, a Party intends to withdraw or modify any of its commitments in a manner inconsistent with this Agreement, it shall provide at least 90 days advance notice of such modification or withdrawal, and the procedure for modifying commitments shall be applied.]
[3.11. Service providers of any other Party that are juridical persons constituted under the laws a party to an agreement referred to in paragraph 3.6 shall be entitled to the treatment granted under such agreement, provided that it engages in substantive business operations in the territory of the parties to such agreement.]
[3.12. a) Parties that are parties to an agreement referred to in paragraph 3.6 shall promptly notify to the ( ) any such agreement and any enlargement or significant modification of said agreement. They shall also make available to (
)3 such relevant information as it may request. ( ) may establish a working party to examine such an agreement or enlargement or modification of such agreement and report to ( ) on its consistency with this Article.
b) Parties that are parties to an agreement referred to in paragraph 3.6 that is implemented on the basis of a time-frame shall periodically report to ( ) on its implementation. ( ) may establish a working party if it deems such a working party necessary, to examine such reports.
c) Based on the reports of the working parties referred to in sub-paragraphs (a) and (b), ( ) may make recommendations to the parties as it deems appropriate.]
[3.13. A Party that is party to an agreement referred to in paragraph 3.6 may not seek compensation for trade benefits that may accrue to any other Party from such agreement.]
Article 4: TRANSPARENCY
[4.1. Each Party shall publish* promptly [in its official organs of record [and in accordance with its legislation]] and [, except in emergency situations,] [shall notify the Committee on Trade in Services and each of the Parties] no later than the date [of the entry into force of the Agreement], [of its entry into force] all [[relevant][pertinent] laws, regulations, and administrative directives and [all] other [generally applicable] decisions, [resolutions][rulings] **,] [and][or]] [measures] [of general application] that pertain to or affect [the operation of the provisions][the provisions] of this chapter [enacted by federal, central, and state governments or by non-governmental regulatory agencies]. International agreements referring to or affecting trade in services to which one of the Parties is a signatory shall also be published [and notified].]
[4.2. When publication of the information [mentioned] [referred to] in paragraph 4.1 is not feasible [or practical], [it shall be made] [the Parties shall make all possible efforts to make it] otherwise publicly available.]
[4.3. Each Party shall inform promptly [to the other Party] [to ( )] and at least once a year, the [introduction][establishment] of new, or [the introduction of] changes to existing laws, regulations or administrative guidelines [which considerably affect][that it considers to affect significantly] trade in services [covered by its specific commitments under this chapter][reached as a result of the commitments of each Party].]
[4.4. [Each Party shall establish national inquiry points.] [For purposes of compliance with the provisions of this Article, the Parties shall use the inquiry points established at the national level, as set out in paragraph 3 of Annex III of the Toronto Ministerial Declaration.] [Parties shall respond promptly to all requests for specific information presented by the other Parties on all their laws] [and] [regarding any of its measures] [referred to in paragraphs 4.1 and 4.2] [of general application or international agreements referred to in paragraph 4.1, through the contact points or the National Information Centers [identified by each Party].] [The inquiry offices that provide specific information to the other Party’s requests on all such matters as well as those subject to the notification requirement in paragraph 4.3, shall be listed in the Annex to this Article.] [Special provision shall be made for the smaller economies, allowing for flexibility in the time-limit to establish such inquiry points as well as for the provision of technical assistance (particularly in the areas of information technology) in order to enable these states to successfully fulfill their obligations in this area.]]
[4.5. To the extent possible, each Party shall provide a reasonable opportunity for interested persons and for the Party to make observations on proposed measures.]
[4.6. Any Party may notify the ( ) of any measure adopted by another Party which, in its judgment, affects the operation of this Chapter.]
[4.7. [No provision of][Nothing in] ** this Chapter shall impose on any* Party the obligation of [providing][supplying] confidential information the disclosure of which could constitute an [obstacle][impediment] to enforcing [its domestic laws] [the laws] or that [in any other way] would be contrary to the public interest, or that could [harm][prejudice] the legitimate commercial interests of public or private enterprises.]
Article 5: DENIAL OF BENEFITS
[5.1. A Party may deny benefits derived from this Chapter, subject to prior notification and consultation:
a) to a service provider of another Party, when it determines the service is being supplied from or in the territory of a non-Party country;
[5.1. [Subject to prior notification and consultation.] a Party may deny the benefits [derived from] [of] this Chapter to a service provider/supplier of another Party [when the Party determines that] [where] the service is being provided/supplied by [an enterprise] [a company] that has no [substantial] [substantive][or real] business* activities in the territory of any [other] Party and [, in accordance with legislation currently in force in said Party,] that is owned or controlled by persons of a non-Party.]
b) when the service is being supplied by an enterprise that is not duly constituted, authorized, or domiciled, pursuant to national legislation, in any other Party.
c) when an enterprise constituted, authorized, or domiciled in any Party does not conduct substantial operations in the territory of that other Party and is owned or controlled by a non-Party country.]
[5.1. A Party may deny benefits deriving from this Chapter, through notification and consultation:
[5.1. In order to enjoy the benefits of this Chapter, and to be considered as services originating in the region service suppliers must be:
a) To the delivery of a service, if it is determined that the service is being supplied from or in the territory of a country that is not a Party;
b) To a service provider, if it is established that the service is being supplied by a person of a country that is not a Party.]
a) natural persons, who are citizens of or have permanent residence in a Party, in accordance with the respective national regulations
b) juridical persons authorized or domiciled, in accordance with the national legislation, in the respective Party and that effectively carry out substantial operations in the territory of that Party.
In the case of a cross border supply of services produced and offered directly from the territory of another Party, by natural or juridical persons, the appropriate preceding paragraph shall apply.]
[5.2. A Party may deny the benefits of this Chapter to service suppliers of another Party where:
a)the service is being supplied by a company owned or controlled by nationals of a non-Party, and:
[5.3. In the case where a Party has doubts regarding the origin of a service, consultations may be sought with the Party involved. If within ( ) days the parties are unable to resolve the doubts regarding the origin of the service, each of the parties involved may seek the intervention of the (dispute settlement entity – as defined in the Chapter on Dispute Settlement).]
i) the denying Party does not maintain diplomatic relations with the non-Party, or
ii) the denying Party adopts or maintains measures with respect to the non-Party that prohibit transactions with the company or that would be violated or circumvented if the benefits of this Chapter were accorded to the company.]
Article 6: NATIONAL TREATMENT1, 2
[6.1. [In the sectors inscribed in its Schedule, and subject to any conditions and qualifications set out therein][Subject to the exceptions listed in the Annexes], each Party shall accord to services and service suppliers of any other Party, in respect of all measures affecting the supply of services, treatment no less favorable than that it accords to its own like services and service suppliers.]
[6.1. Each Party shall accord to the [services and] service providers/suppliers of another Party treatment no less favorable than that it accords, in like circumstances, to its [services and] service providers/suppliers.]
[6.2. The treatment granted by a Party under paragraph 6.1 means, with respect to a province or state, treatment no less favorable than the most favorable treatment accorded, in like circumstances, by that province or state to service providers of the Party of which it forms a integral part.]
[6.2. The commitments assumed under this Article shall not be construed to require any Party to compensate for inherent competitive disadvantages which result from the foreign character of the like services or service suppliers.]
[6.2. The Parties shall maintain exemptions to the Principle enshrined in paragraph 6.1.]
[6.3. The Parties may meet the requirement of paragraph 6.1 by according to services and service suppliers of the other Parties, either formally identical treatment or formally different treatment to that it accords to its own like services and service suppliers.]
[6.4. Formally identical or formally different treatment shall be considered to be less favorable if it modifies the conditions of competition in favor of services or service suppliers of the Party compared to like services or service suppliers of any other Party.]
[6.5. Developing countries and smaller economies, in particular, may establish exceptions to the principle set out in paragraph 6.1.]
[6.5. Exceptions to this principle shall be allowed, in the case of smaller economies, in pursuit of sustainable national development objectives and to enable their fuller participation in the overall FTAA process.]
Article 7: MARKET ACCESS1,
[7.1. With respect to market access through the four modes of supply identified in Article ( ), each Party shall accord services and service suppliers of any other Party treatment no less favorable than that provided for under the terms, limitations and conditions agreed and specified in its Schedule [of Specific Commitments annexed to this Chapter] [and in accordance with appropriate regulations consistent with the provisions of Article ( ) on Domestic Regulation].]
[7.1. Each Party shall accord to services and service providers of the other Parties, access to its market, through any of the modes of supply established for trade in services.]
[7.2. The Parties undertake to permit the cross-border movement of capital where this is an essential part of a market-access commitment on cross-border trade in their Schedule of Commitments, as well as transfers of capital to its territory where market access commitments are undertaken in respect of commercial presence. ]
|| Some countries believe that aspects related to the right of governments to regulate services, as well as exceptions to certain disciplines which could eventually be relevant to the issue of scope and coverage, will be defined subsequently.
|| One country recognizes that the NGSV will identify where appropriate supplementary disciplines for specific sectors, and that specialized provisions need to be developed for financial services.
|| Some countries consider that aspects related to “mode 3” of the GATS “commercial presence” should be considered by the Negotiating Group on Investment. Channels of communication should be opened between the NGSV and the NGIN to ensure consistency and avoid duplication with respect to investment-related aspects of the services and investment chapters.
|| One country recognizes that the NGSV will continue discussion of the possibility of establishing specific provisions for sub-national measures.
|| Some countries noted that they wanted to reserve the flexibility to decide whether this should be included under Scope [of Application] or under Definitions.
|| Brackets only in English: this symbol will appear wherever multiple English expressions are represented by a single expression in Spanish.
|| One country noted that the terminology will need to be conformed to that used in the Investment Chapter.
|| Some countries noted that they wanted to reserve the flexibility to decide whether this should be in Scope [of Application] or Definitions.
|| One country noted that the terminology will need to be conformed to that used in the Government Procurement Chapter.
|| Brackets only in Spanish: this symbol will appear wherever multiple Spanish expressions are represented by a single expression in English.
|| Some countries recognize that some of the ideas included in this article could subsequently be relocated under other provisions of the chapter on services, depending on the progress achieved in analysis and in discussions.
|| Some countries understand this condition in terms of the number of sectors, volume of trade affected, and modes of supply. To meet this condition, the agreements shall not provide for the a priori exclusion of any mode of supply.
|| Some countries will consider a text on the modification of lists that they will submit in due course.
|| Some countries believe that once the corresponding institutional aspects have been defined, the parentheses shall be replaced by the name of the respective authority.
|| Some countries indicated that the current proposal does not prejudge the modalities and procedures of negotiation on market access and national treatment.
|| Some countries reserved the right to make reservations to national treatment, most favored nation treatment, and other principles that are considered pertinent regarding specific matters or sectors at a later date.
|| Some countries indicated that the current proposal does not prejudge the modalities and procedures of the negotiation on market access and national treatment.
|| Some countries believe that to ensure full integration and development of small economies, the more developed countries should grant access to their markets in sectors or subsectors of interest to the small economies. In addition, liberalization commitments could be established, taking into account the different levels of development of the economies.
|| Some countries consider that the concept of “Market Access” is closely related to the precepts relative to “Most Favored Nation Treatment,” “National Treatment,” and “Standard of Treatment.”