Provisions on Trade in Services in Trade and Integration Agreements in the Western Hemisphere

WTO/GATS*
PART IV: Progressive Liberalization; Article XIX- Negotiation of Specific Commitments
In pursuance of the objectives of this Agreement, Members shall enter successive rounds of negotiations, beginning no later than five years from the date of entry into force of the Agreement Establishing the WTO and periodically thereafter, with a view to achieving a progressively higher level of liberalization.

NAFTA*
Refer to Part III of this document for information specific to:
(i) Financial Services: Article 1404.4
(ii) Land Transportation: Annex 1212 (2) (c)
(iii) Professional Services: Annex 1210.5 (4)

Annex I, I-M-18 and 19: Reservations for existing measures and Liberalization Commitments Telecommunications (Enhanced or Value-Added Services):
Beginning July 1, 1995, a person of Canada or the United States may provide all enhanced or value-added services without the need to establish a local presence in the territory of Mexico.

Article 12.07 Quantitative restrictions
The Parties shall periodically, but in any event at least every two years, endeavor to negotiate the liberalization or removal of the quantitative restrictions set out in Annex V pursuant to paragraphs 1 through 3.

Article 1208: Liberalization of Non-Discriminatory Measures
Each Party shall set out in its Schedule to Annex VI its commitments to liberalize quantitative restrictions, licensing requirements, performance requirements or other non-discriminatory measures.

Article 1209: Procedures
The Commission shall establish procedures for:
(b) consultations on reservations, quantitative restrictions or commitments with a view to further liberalization.

Article 1210.3: Licensing and Certification
Each Party shall, within two years of the date of entry into force of this Agreement, eliminate any citizenship or permanent residency requirement set out in its schedule to Annex I that it maintains for the licensing or certification of professional service providers.

Where a Party does not comply with this obligation with respect to a particular sector, any other Party may, in the same sector and for such period as the noncomplying Party maintains its requirement, solely have recourse to maintaining an equivalent requirement set out in its Schedule to Annex I or reinstating:
(a) any such requirement at the federal level that it eliminated pursuant to this Article; or
(b) on notification to the non-complying Party, any such requirement at the state or provincial level existing on the date of entry into force of this Agreement.

The Parties shall consult periodically with a view to determining the feasibility of removing any remaining citizenship or permanent residency requirement for the licensing or certification of each other's service providers.

Group of Three*
Chapter X: Article 10-09: Future Liberalization
Through future negotiations to be called by the Commission, the Parties shall deepen the liberalization achieved in the different service sectors, aiming to eliminate the restrictions left in conformity with Article 10-07, paragraph 3 to 5, and to reach a global equilibrium in terms of the commitments assumed.

Article 10.08 Quantitative restrictions
The Parties shall periodically, at least every two years, endeavor to negotiate the liberalization or removal of the existing quantitative restrictions at the federal or central, state or departmental levels.

Article 10-10: Liberalization of Non-Discriminatory Measures
The Parties shall be able to negotiate the liberalization of quantitative restrictions, licensing requirements and other non-discriminatory measures. The commitments acquired shall be set out in the Protocol agreed on by the Parties.

Article 10-11 Reciprocity and global equilibrium
The parties, in the negotiations referred to in Article 10-07, 10-08 and 10-10 shall endeavor to reach agreements on the basis of reciprocity, aimed at achieving a global equilibrium in the concessions granted.

Article 10-14.3: Licensing and Certification
Each Party shall, within two years of the date of entry into force of this Agreement, eliminate any citizenship or permanent residency requirement that it maintains for the licensing or certification of professional service providers of another Party.

Article 11-12: Schedule of Liberalization for Value-Added Services
What is established in Chapter X shall be applied to value-added services.

Beginning July 1, 1995 all the limitations to the liberalization of value-added services will be eliminated.

Where a Party does not comply with this obligation with respect to a particular sector, any other Party will have to, in the same sector and for such period as the noncomplying Party maintains its requirement, solely have recourse the right to:
(a) maintain an equivalent requirement set out in its Schedule referred to in Article 10-07 par. 7
(b) reinstate:
(i) any such requirement at the federal or central level that it eliminated pursuant to this Article; or
(ii) any such requirement at the state or departamental level existing on the date of entry into force of this Agreement, on notification to the non-complying Party.

CACM**
Not Specified.

CARICOM**
Not Specified.

Andean Community**
Chapter V, Article 14: Process of Liberalization
In spite of what is mentioned in the previous Articles, no later than December 31st, 1999, the Commission of the Andean Community shall adopt, through a Decision, an inventory of measures contrary to the principles contained in article 6 and 8 of the present General Framework maintained by each Member Country.

Transitory provisions
First: Until the adoption of the Decision referred to in Article 14 of the present General Framework and, in any event, no later than January 1st, 2000, the commitments contained in articles 6 and 8 shall be exigibles in conformity with the domestic set of rules of each Member Country.

Second: In order to comply with what is set out in Article 14 of the present Decision, the Member Countries shall initiate an exchange of information on the measures foreseen in their legislation, that restrict the application of the principles contained in articles 6 and 8. The General secretariat of the Andean Community shall coordinate the process of exchange of information, of elaboration of inventory and of preparation of the drafted Decision.

Chapter V, Article 15 and 16: Process of Liberalization
Specific Commitment- For the purpose of advancing the process of liberalization of subregional trade in services, on the basis of substantial sectoral coverage, the Member Countries shall lift gradually and progressively the measures contained in the inventory, by means of annual negotiations coordinated by the General Secretariat, whose results shall be expressed in the Decisions that the Commission of the Andean Community shall adopt. Two or more Member Countries may facilitate or deepen the liberalization of specific sectors or subsectors of services. The benefits resulting from the acceleration and deepening shall be extended, immediately and unconditionally, to the country having already liberalized the aforementioned sector and by way of negotiations with the other Member Countries of the Andean Community.

Chapter VIII, Article 22, Special treatment in favour of Bolivia and Ecuador
During the negotiations that are taking place in the context of the present General Framework, preferential treatment shall be considered in favour of Bolivia and Ecuador, with respect to the time-limits and temporary exceptions in the fulfillment of their obligations, in conformity with what is planned in the Cartagene Agreement.

Central America/Dominican Republic

Mercosur**
Part III, Article XIX: Negotiations of Specific Commitments -
The Parties shall conduct successive rounds of negotiations with the objective of completing the Program of Liberalization of Trade in Services within MERCOSUR in a period of no more than ten years from the entry into force of this Protocol. The rounds of negotiations shall be held annually and shall achieve the progressive incorporation of sectors, subsectors, activities, and modes of service supply to the Program of Liberalization of Protocol, such as the reduction or the elimination of the disfavourable effects of the measures about the trade in services, as forms to ensure effective access to markets. This process shall finally aim to promote the interests of all participants, on the basis of mutual advantages, and to obtain a global equilibrium of rights and obligations.

The process of progressive liberalization shall be directed in every round through negotiations for the increase in the level of specific commitments assumed by the Parties in the Lists of specific commitments.

Differences in the level of commitments undertaken by the Parties are admissible in the development of the Program of Liberalization, in line with the specificities of various sectors and taking into consideration the objectives noted in the next paragraph.

The process of liberalization shall respect the right of each Party to regulate and to introduce new regulations into the territories to reach national political related to the service sectors. Such regulations may regulate, among others, the national treatment and the access to markets as long as they do not cancel or impair the obligations of the Protocol and of the specific commitments.

Bolivia/Mercosur**
Chapter XVII: Administration and Evaluation of the Agreement
Article 39: The administration and evaluation of the present Agreement will be carried out by an Executive Commission, constituted by the MERCOSUR's Common Market Group and Bolivia's Ministry of Foreign Relations.

Article 40.b: The Executive Commission will define the modalities and deadlines for the negotiations over the objectives of this Agreement, and for such purpose working groups may be constituted.

Article 40.c: The Executive Commission will evaluate periodically the accomplishments of the liberalization program and the general functioning of the present Agreement.

Chile/Mercosur**
Chapter XII - Services
Article 36: The Parties agree to initiate efforts to extend the aspects of the liberalization program to trade-related service sectors, in order to achieve the objectives set out in Article 34.

Chapter XIX: Administration and Evaluation of the Agreement Article 46: The administration and evaluation of the present Agreement will be carried out by an Executive Commission, constituted by the MERCOSUR's Common Market Group and Chile's Ministry of Foreign Relations.

Article 47.b: The Executive Commission will define the modalities and deadlines for the negotiations over the objectives of this Agreement, and for such purpose working groups may be constituted.

Article 47.c: The Executive Commission will evaluate periodically the accomplishments of the liberalization program and the general functioning of the present Agreement.

Mercosur Resolution 31/98
MERCOSUR/GMC/RES Nº 31/98
CREATION OF THE GROUP ON SERVICES

HAVING SEEN: The Treaty of Asuncion, the Ouro Preto Protocol, Decision Nº 13/97 of the Council of the Common Market (CCM), Resolutions Nº 20/95 and 67/97 of the Common Market Group and Recommendation Nº 2/98 of the Ad Hoc Group on Services.

WHEREAS: The Montevideo Protocol stipulates that the State Parties shall enter into annual rounds of negotiations with a view to completing the Program of Liberalization of Trade in Services of MERCOSUR in a period of no more than ten years from the entry into force of this Protocol. The Montevideo Protocol has granted the Common Market Group the authority to negotiate services in MERCOSUR.
Likewise, the functions of the Common Market Group are to supervise negotiations of specific commitments and to periodically evaluate the evolution of trade in services in MERCOSUR. It is advisable to set up an auxiliary organ of the Common Market Group, as set forth in Article XXII.2 of the Montevideo Protocol and to regulate its composition and modalities of operation.
The Ad Hoc Group on Services has satisfactorily completed the tasks entrusted to it by the Common Market Group.

THE COMMON MARKET GROUP RESOLVES:

Art. 1 To create the Group on Services as an auxiliary organ of the Common Market Group in the area of Services.

Art. 2 That the Group on Services shall carry out all the tasks that, in the area of services, are entrusted to it by the Common Market Group.

Art. 3 That the Group on Services shall organize the convening of annual rounds of negotiations on the specific undertakings and it shall be, in its function as an auxiliary organ of the Common Market Group, responsible for conducting same. The Group on Services may convene, when it deems necessary, the Coordinators and Delegates of the State Parties in the competent organs of MERCOSUR, in relation to specific service sectors. The Group on Services will inform the Common Market Group periodically on the evolution of the negotiations on services.

Art. 4 To instruct the Group on Services to submit to the Common Market Group a proposal on the criteria and instruments to be used in conducting the negotiations on specific undertakings.

Art. 5 That the Group on Services shall submit to the Common Market Group a proposal on its composition and modalities of operation.

Art. 6 That the proposals mentioned in articles 4 and 5 shall be submitted to the Common Market Group within 90 days after the date of this Resolution, bearing in mind, inter alia, the methodology used during the negotiation on the Initial Specific Commitments.

Art. 7 To consider the activities of the Ad Hoc Group on Services to be completed.

XXX CMG - Buenos Aires, 22/VII/98

Mercosur Resolution 73/98
MERCOSUR/GMC/RES Nº 73.98
COMPOSITION, MODALITIES OF OPERATION, CRITERIA AND INSTRUMENTS OF THE GROUP ON SERVICES

HAVING SEEN: The Treaty of Asuncion, the Ouro Preto Protocol, Decisions Nº 13/97 and 12/98 of the Council of the Common Market (CCM) and Resolution Nº 31/98 of the Common Market Group.
WHEREAS: Article XIX of the Montevideo Protocol on Trade in Services establishes that the state Parties shall enter into successive annual rounds of negotiations a view to completing the Program of Liberalization of Trade in Services of MERCOSUR in a period of no more than ten years.
Decision CCM 9/98 approved the Annexes with specific sectoral provisions and the lists of initial specific commitments that complement the Montevideo Protocol.
Resolution GMC 31/98 created the Group on Services, with the mandate to organize the call to the successive annual rounds of negotiations on specific commitments and charged it with conducting the negotiations, as well as performing any other task entrusted to it by the Common Market Group. In this sense, the Group on Services prepared the proposal on its composition and modalities of operation, as well as the criteria and instruments to be used in conducting the negotiations on specific commitments.

THE COMMON MARKET GROUP RESOLVES:

Art. 1 The Group on Services shall be made up only of government representatives of the State Parties, applying, wherever appropriate, the provisions of Decision 4/91 of the CCM and complementary decisions, as to its composition, operation and aspects not specifically regulated by this Resolution.

Art. 2 The Group on Services shall develop all the activities entrusted to it by the Common Market Group, and it shall submit for approval all those activities that it deems pertinent. The MERCOSUR Group on Services shall have the following activities, inter alia:

a) Through a call to meeting previously issued by the Common Market Group, and in its capacity as an auxiliary organ of the Common Market Group, it shall organize the call and conduct the annual rounds of negotiations on specific commitments, the results of which must be submitted to the Common Market Group annually;
b) Submit to the Common Market Group recommendations it deems appropriate for the implementation and execution of the Montevideo Protocol on Trade in Services;
c) Convene, whenever necessary, the Coordinators and Delegates of the State Parties of the Working Subgroups, Ad Hoc Groups, Technical Committees of Meetings of Ministers and Specialized Meetings of MERCOSUR related to the services sector, with a view to carrying out, in a joint and coordinated manner, the work related to the liberalization process of trade in services, pursuant to the Montevideo Protocol. To summon, whenever necessary, other experts and institutions related to specific service sectors;
d) Assist the Common Market Group, upon instruction, in negotiations on services outside MERCOSUR;
e) Receive notification and results from consultations on the modification and/or suspension of specific commitments, as provided in Articles XX and XXII, paragraph 1)b. of the Montevideo Protocol, with a view to conducting the necessary consultations and submitting the results to the Common Market Group;
f) Receive and analyze the consistency with the Montevideo Protocol of the recommendations prepared in light of Article XI of the Montevideo Protocol, and submit them to the Common Market Group;
g) Convene and carry out the rounds of negotiations for specific service sectors, upon approval of the Common Market Group;
h) Make the necessary technical corrections to the list of specific commitments. Art. 3 The Group on Services (GS) shall meet at regular or special sessions in order to comply with the mandate entrusted to it to complete the Program of Liberalization of Trade in Services of MERCOSUR, in a period of not more than 10 years. The regular meetings shall be held, in principle, every two months, on dates agreed to by the State Parties, starting at the date of the call to each new round of negotiations. Special meetings shall be held at any time, at the request of a State Party, on dates agreed to by the State Parties, with advance notice of at least 2 weeks.

Art. 4 The Group on Services will be able to submit draft recommendations to the Common Market Group, which shall progressively incorporate different negotiating criteria and instruments, according to its needs. The Group on Services shall prepare, if necessary, a technical manual on the negotiation of commitments.

Art. 5 The criteria and instruments for negotiating specific commitments are included as an Annex and form part of this Resolution.

Art. 6 This Resolution is approved in the Spanish and Portuguese versions.

XV CCM - Rio de Janeiro, 8/XII/98

ANNEX: CRITERIA AND INSTRUMENTS TO CONDUCT NEGOTIATIONS ON SPECIFIC COMMITMENTS

1) In order to facilitate the negotiation of commitments, each State Party shall make efforts to achieve transparency. Upon request of specific information, it shall provide and explain the regulations that affect international trade in services.

2) Further commitments will be carried out through the incorporation of new sectors or, in the case of sectors that are already included in the lists, through the progressive elimination of existing limitations.

3) In consolidating new sectors on the Lists of Commitments, the State Parties shall, to the extent possible, record them in such a way that they reflect the existing normative framework.

4) Sectoral coverage shall be as broad as possible. Negotiations shall aim at the global strengthening of the commitments taken on by each State Party in the WTO and they shall have broad sectoral coverage and modes of supply.

5) The negotiation of commitments shall be based on the criteria of the WTO nomenclature. Commitments shall be negotiated using a harmonized nomenclature and at the level of four or fewer digits of the Central Product Classification (CPC). A State Party can make offers to be consigned at a higher level of desegregation.

6) Upon previous consultation of the appropriate MERCOSUR sectoral organ, the Group on Services shall identify in the normative framework currently in force in the countries of MERCOSUR (bilateral or multilateral agreements), what commitments can be placed on the lists and how.

7) The commitments must be included on a single, easily accessible instrument. To this purpose, the commitments shall be placed on Lists on loose-leaf pages or on the appropriate electronic means. Each year, after the approbation of the improvements in the List of commitments, the improvements shall be added to the List in which the previous commitments have been consolidated. Efforts will also be made to identify those commitments that reflect a higher level of liberalization than what exists at the WTO level. The Administrative Secretariat of MERCOSUR (known by its Spanish acronym SAM) shall be responsible for preparing and updating this instrument.

8) The modality of negotiation shall be based on the presentation of lists of requests and offers from the State Parties. The requests shall be submitted within a reasonable time (3 weeks) prior to the meetings of the Group on Services.