Title:Cross-Border Trade in Services -- Chapter Twelve
Author: White House
Document-Date: 29 Sept 1993
Content-Type: text/plain; CHARSET=US-ASCII
Content-Length:30632                                     Chapter Twelve 
 
                             Cross-Border Trade in Services 
 
 
            Article 1201:  Scope and Coverage 
 
            1.   This Chapter applies to measures adopted or maintained by 
            a Party relating to cross-border trade in services by service 
            providers of another Party, including measures respecting: 
 
                 (a)  the production, distribution, marketing, sale and 
                      delivery of a service; 
 
                 (b)  the purchase or use of, or payment for, a service; 
 
                 (c)  the access to and use of distribution and 
                      transportation systems in connection with the 
                      provision of a service; 
 
                 (d)  the 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. 
 
            2.   This Chapter does not apply to:  
 
                 (a)  financial services, as defined in Chapter 
                      Fourteen (Financial Services); 
 
                 (b)  air services, including domestic and international 
                      air transportation services, whether scheduled or 
                      non-scheduled, and related services in support of air 
                      services, other than 
 
                      (i)  aircraft repair and maintenance services during 
                           which an aircraft is withdrawn from service, and 
 
 
                      (ii) specialty air services; 
 
                 (c)  procurement by a Party or a state enterprise; or 
 
                 (d)  subsidies or grants provided by a Party or a state 
                      enterprise, including government-supported loans, 
                      guarantees and insurance. 
 
 
 
 
 
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            3.   Nothing in this Chapter shall be construed to: 
 
                 (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 
 
                 (b)  prevent a Party from providing a service or 
                      performing a function such as law enforcement, 
                      correctional services, income security or insurance, 
                      social security or insurance, social welfare, public 
                      education, public training, health, and child care, 
                      in a manner that is not inconsistent with this 
                      Chapter. 
 
 
            Article 1202:  National Treatment 
 
            1.   Each Party shall accord to service providers of another 
            Party treatment no less favorable than that it accords, in like 
            circumstances, to its own service providers. 
 
            2.   The treatment accorded by a Party under paragraph 1 means, 
            with respect to a state or province, treatment no less 
            favorable than the most favorable treatment accorded, in like 
            circumstances, by that state or province to service providers 
            of the Party of which it forms a part. 
 
 
            Article 1203:  Most-Favored-Nation Treatment 
 
                 Each Party shall accord to service providers of another 
            Party treatment no less favorable than that it accords, in like 
            circumstances, to service providers of any other Party or of a 
            non-Party. 
 
 
            Article 1204:  Standard of Treatment 
 
                 Each Party shall accord to service providers of any other 
            Party the better of the treatment required by Articles 1202 and 
            1203. 
 
 
            Article 1205:  Local Presence 
 
                 No Party may require a service provider of another Party 
            to establish or maintain a representative office or any form of 
 
 
 
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            enterprise, or to be resident, in its territory as a condition 
            for the cross-border provision of a service. 
 
 
            Article 1206:  Reservations 
 
            1.   Articles 1202, 1203 and 1205 do not apply to: 
 
                 (a)  any existing non-conforming measure that is 
                      maintained by 
 
                      (i)  a Party at the federal level, as set out in its 
                           Schedule to Annex I, 
 
                      (ii) a state or province, for two years after the 
                           date of entry into force of this Agreement, and 
                           thereafter as set out by a Party in its Schedule 
                           to Annex I in accordance with paragraph 2, or 
 
                      (iii)     a local government; 
 
                 (b)  the continuation or prompt renewal of any non- 
                      conforming measure referred to in subparagraph (a); 
                      or  
 
                 (c)  an amendment to any non-conforming measure referred 
                      to in subparagraph (a) to the extent that the 
                      amendment does not decrease the conformity of the 
                      measure, as it existed immediately before the 
                      amendment, with Articles 1202, 1203 and 1205. 
 
            2.   Each Party may set out in its Schedule to Annex I, within 
            two years of the date of entry into force of this Agreement, 
            any existing non-conforming measure maintained by a state or 
            province, not including a local government. 
 
            3.   Articles 1202, 1203 and 1205 do not apply to any measure 
            that a Party adopts or maintains with respect to sectors, 
            subsectors or activities, as set out in its Schedule to  
            Annex II. 
 
 
            Article 1207:  Quantitative Restrictions 
 
            1.   Each Party shall set out in its Schedule to Annex V any 
            quantitative restriction that it maintains at the federal 
            level. 
 
            2.   Within one year of the date of entry into force of this 
            Agreement, each Party shall set out in its Schedule to Annex V 
 
 
 
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            any quantitative restriction maintained by a state or province, 
            not including a local government. 
 
            3.   Each Party shall notify the other Parties of any 
            quantitative restriction that it adopts, other than at the 
            local government level, after the date of entry into force of 
            this Agreement and shall set out the restriction in its 
            Schedule to Annex V. 
 
            4.   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:  
 
                 (a)  a Party to notify and include in its relevant 
                      Schedule 
 
                      (i)  state or provincial measures in accordance with 
                           Article 1206(2), 
 
                      (ii) quantitative restrictions in accordance with 
                           Article 1207(2) and (3), 
 
                      (iii)     commitments pursuant to Article 1208, and  
 
                      (iv) amendments of measures referred to in Article 
                           1206(1)(c); and 
 
                 (b)  consultations on reservations, quantitative 
                      restrictions or commitments with a view to further 
                      liberalization. 
 
 
            Article 1210:  Licensing and Certification 
 
            1.   With a view to ensuring that any measure adopted or 
            maintained by a Party relating to the licensing or 
            certification of nationals of another Party does not constitute 
 
 
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            an unnecessary barrier to trade, each Party shall endeavor to 
            ensure that any such measure: 
 
                 (a)  is based on objective and transparent criteria, 
                      such as competence and the ability to provide a 
                      service; 
 
                 (b)  is not more burdensome than necessary to ensure 
                      the quality of a service; and 
 
                 (c)  does not constitute a disguised restriction on 
                      the cross-border provision of a service. 
 
            2.   Where a Party recognizes, unilaterally or by agreement, 
            education, experience, licenses or certifications obtained in 
            the territory of another Party or of a non-Party: 
 
                 (a)  nothing in Article 1203 shall be construed to require 
                      the Party to accord such recognition to education, 
                      experience, licenses or certifications obtained in 
                      the territory of another Party; and 
 
                 (b)  the Party shall afford another Party an adequate 
                      opportunity to demonstrate that education, 
                      experience, licenses or certifications obtained in 
                      that other Party's territory should also be 
                      recognized or to conclude an agreement or arrangement 
                      of comparable effect. 
 
            3.   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 of another Party.  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 non-complying 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. 
 
            4.   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. 
 
 
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            5.   Annex 1210.5 applies to measures adopted or maintained by 
            a Party relating to the licensing or certification of 
            professional service providers. 
 
 
            Article 1211:  Denial of Benefits 
 
            1.   A Party may deny the benefits of this Chapter to a service 
            provider of another Party where the Party establishes that: 
 
                 (a)  the service is being provided by an enterprise owned 
                      or controlled by nationals of a non-Party, and 
 
                      (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 enterprise or that would 
                           be violated or circumvented if the benefits of 
                           this Chapter were accorded to the enterprise; or 
 
                 (b)  the cross-border provision of a transportation 
                      service covered by this Chapter is provided using 
                      equipment not registered by any Party. 
 
            2.   Subject to prior notification and consultation in 
            accordance with Articles 1803 (Notification and Provision of 
            Information) and 2006 (Consultations), a Party may deny the 
            benefits of this Chapter to a service provider of another Party 
            where the Party establishes that the service is being provided 
            by an enterprise that is owned or controlled by persons of a 
            non-Party and that has no substantial business activities in 
            the territory of any Party. 
 
 
            Article 1212:  Sectoral Annex 
 
                 Annex 1212 applies to specific sectors. 
 
 
            Article 1213:  Definitions 
 
            1.   For purposes of this Chapter, a reference to a federal, 
            state or provincial government includes any non-governmental 
            body in the exercise of any regulatory, administrative or other 
            governmental authority delegated to it by that government.  
 
            2.   For purposes of this Chapter: 
 
 
 
 
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            cross-border provision of a service or cross-border trade in 
            services means the provision of a service: 
 
                 (a)  from the territory of a Party into the territory 
                      of another Party, 
 
                 (b)  in the territory of a Party by a person of that 
                      Party to a person of another Party, or 
 
                 (c)  by a national of a Party in the territory of 
                      another Party, 
 
            but does not include the provision of a service in the 
            territory of a Party by an investment, as defined in Article 
            1139 (Investment - Definitions), in that territory; 
 
            enterprise means an "enterprise" as defined in Article 201 
            (Definitions of General Application), and a branch of an 
            enterprise; 
 
            enterprise of a Party means an enterprise constituted or 
            organized under the law of a Party, and a branch located in the 
            territory of a Party and carrying out business activities 
            there; 
 
            professional services means services, the provision of which 
            requires specialized post-secondary education, or equivalent 
            training or experience, and for which the right to practice is 
            granted or restricted by a Party, but does not include services 
            provided by trades-persons or vessel and aircraft crew members; 
 
 
            quantitative restriction means a non-discriminatory measure 
            that imposes limitations on: 
 
                 (a)  the number of service providers, whether in the form 
                      of a quota, a monopoly or an economic needs test, or 
                      by any other quantitative means; or 
 
                 (b)  the operations of any service provider, whether in 
                      the form of a quota or an economic needs test, or by 
                      any other quantitative means; 
 
            service provider of a Party means a person of a Party that 
            seeks to provide or provides a service; and 
 
            specialty air services means aerial mapping, aerial surveying, 
            aerial photography, forest fire management, fire fighting, 
            aerial advertising, glider towing, parachute jumping, aerial 
            construction, heli-logging, aerial sightseeing, flight 
 
 
 
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            training, aerial inspection and surveillance, and aerial 
            spraying services. 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
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                                                               Annex 1210.5                                             
                  ____________ 
 
 
                                      Annex 1210.5 
 
                                 Professional Services 
 
                             Section A - General Provisions 
 
            Processing of Applications for Licenses and Certifications 
 
            1.   Each Party shall ensure that its competent authorities, 
            within a reasonable time after the submission by a national of 
            another Party of an application for a license or certification: 
 
                 (a)  where the application is complete, make a 
                      determination on the application and inform the 
                      applicant of that determination; or 
 
                 (b)  where the application is not complete, inform 
                      the applicant without undue delay of the status 
                      of the application and the additional 
                      information that is required under the Party's 
                      law. 
 
            Development of Professional Standards 
 
            2.   The Parties shall encourage the relevant bodies in their 
            respective territories to develop mutually acceptable standards 
            and criteria for licensing and certification of professional 
            service providers and to provide recommendations on mutual 
            recognition to the Commission. 
 
            3.   The standards and criteria referred to in paragraph 2 may 
            be developed with regard to the following matters: 
 
                 (a)  education - accreditation of schools or academic 
                      programs; 
 
                 (b)  examinations - qualifying examinations for licensing, 
                      including alternative methods of assessment such as 
                      oral examinations and interviews; 
 
                 (c)  experience - length and nature of experience required 
                      for licensing; 
 
                 (d)  conduct and ethics - standards of professional 
                      conduct and the nature of disciplinary action for 
                      non-conformity with those standards; 
 
 
 
 
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                                                               Annex 1210.5                                             
                  ____________ 
 
 
                 (e)  professional development and re-certification - 
                      continuing education and ongoing requirements to 
                      maintain professional certification; 
 
                 (f)  scope of practice - extent of, or limitations on, 
                      permissible activities; 
 
                 (g)  local knowledge - requirements for knowledge of such 
                      matters as local laws, regulations, language, 
                      geography or climate; and 
 
                 (h)  consumer protection - alternatives to residency 
                      requirements, including bonding, professional 
                      liability insurance and client restitution funds, to 
                      provide for the protection of consumers. 
 
            4.   On receipt of a recommendation referred to in paragraph 2, 
            the Commission shall review the recommendation within a 
            reasonable time to determine whether it is consistent with this 
            Agreement.  Based on the Commission's review, each Party shall 
            encourage its respective competent authorities, where 
            appropriate, to implement the recommendation within a mutually 
            agreed time. 
 
            Temporary Licensing 
 
            5.   Where the Parties agree, each Party shall encourage the 
            relevant bodies in its territory to develop procedures for the 
            temporary licensing of professional service providers of 
            another Party. 
 
            Review 
 
            6.   The Commission shall periodically, and at least once every 
            three years, review the implementation of this Section. 
 
 
                         Section B - Foreign Legal Consultants 
 
            1.   Each Party shall, in implementing its obligations and 
            commitments regarding foreign legal consultants as set out in 
            its relevant Schedules and subject to any reservations therein,  
            ensure that a national of another Party is permitted to 
            practice or advise on the law of any country in which that 
            national is authorized to practice as a lawyer. 
 
 
 
 
 
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                                                               Annex 1210.5                                             
                  ____________ 
 
 
            Consultations With Professional Bodies 
 
            2.   Each Party shall consult with its relevant professional 
            bodies to obtain their recommendations on: 
 
                 (a)  the form of association or partnership between 
                      lawyers authorized to practice in its territory and 
                      foreign legal consultants; 
 
                 (b)  the development of standards and criteria for the 
                      authorization of foreign legal consultants in 
                      conformity with Article 1210; and 
 
                 (c)  other matters relating to the provision of foreign 
                      legal consultancy services. 
 
            3.   Prior to initiation of consultations under paragraph 7, 
            each Party shall encourage its relevant professional bodies to 
            consult with the relevant professional bodies designated by 
            each of the other Parties regarding the development of joint 
            recommendations on the matters referred to in paragraph 2. 
 
            Future Liberalization 
 
            4.   Each Party shall establish a work program to develop 
            common procedures throughout its territory for the 
            authorization of foreign legal consultants. 
 
            5.   Each Party shall promptly review any recommendation 
            referred to in paragraphs 2 and 3 to ensure its consistency 
            with this Agreement.  If the recommendation is consistent with 
            this Agreement, each Party shall encourage its competent 
            authorities to implement the recommendation within one year. 
 
            6.   Each Party shall report to the Commission within one year 
            of the date of entry into force of this Agreement, and each 
            year thereafter, on its progress in implementing the work 
            program referred to in paragraph 4. 
 
            7.   The Parties shall meet within one year of the date of 
            entry into force of this Agreement with a view to: 
 
                 (a)  assessing the implementation of paragraphs 2 through 
                      5; 
 
                 (b)  amending or removing, where appropriate, reservations 
                      on foreign legal consultancy services; and 
 
 
 
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                                                               Annex 1210.5                                             
                  ____________ 
 
 
                 (c)  assessing further work that may be appropriate 
                      regarding foreign legal consultancy services. 
 
 
                      Section C - Temporary Licensing of Engineers 
 
            1.   The Parties shall meet within one year of the date of 
            entry into force of this Agreement to establish a work program 
            to be undertaken by each Party, in conjunction with its 
            relevant professional bodies, to provide for the temporary 
            licensing in its territory of nationals of another Party who 
            are licensed as engineers in the territory of that other Party. 
 
            2.   To this end, each Party shall consult with its relevant 
            professional bodies to obtain their recommendations on: 
 
                 (a)  the development of procedures for the temporary 
                      licensing of such engineers to permit them to 
                      practice their engineering specialties in each 
                      jurisdiction in its territory; 
 
                 (b)  the development of model procedures for adoption by 
                      the competent authorities throughout its territory to 
                      facilitate the temporary licensing of such engineers; 
 
 
                 (c)  the engineering specialties to which priority should 
                      be given in developing temporary licensing 
                      procedures; and 
 
                 (d)  other matters relating to the temporary licensing of 
                      engineers identified by the Party in such 
                      consultations. 
 
            3.   Each Party shall request its relevant professional bodies 
            to make recommendations on the matters referred to in paragraph 
            2 within two years of the date of entry into force of this 
            Agreement.  
 
            4.   Each Party shall encourage its relevant professional 
            bodies to meet at the earliest opportunity with the relevant 
            professional bodies of the other Parties with a view to 
            cooperating in the development of joint recommendations on the 
            matters referred to in paragraph 2 within two years of the date 
            of entry into force of this Agreement.  Each Party shall 
            request an annual report from its relevant professional bodies 
            on the progress achieved in developing those recommendations. 
 
 
 
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                                                               Annex 1210.5                                             
                  ____________ 
 
 
            5.   The Parties shall promptly review any recommendation 
            referred to in paragraphs 3 or 4 to ensure its consistency with 
            this Agreement.  If the recommendation is consistent with this 
            Agreement, each Party shall encourage its competent authorities 
            to implement the recommendation within one year. 
 
            6.   The Commission shall review the implementation of this 
            Section within two years of the date of entry into force of 
            this Section. 
 
            7.   Appendix 1210.5-C applies to the Parties specified 
            therein. 
 
 
 
                                  Appendix 1210.5 - C 
 
                                    Civil Engineers 
 
 
                 The rights and obligations of Section C of Annex 1210.5 
            apply to Mexico with respect to civil engineers ("ingenieros 
            civiles") and to such other engineering specialties that Mexico 
            may designate. 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
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                                                                 Annex 1212                                              
                   __________ 
 
 
                                       Annex 1212 
 
                                  Land Transportation 
 
 
            Contact Points 
 
            1.   Further to Article 1801 (Contact Points), each Party shall 
            designate by January 1, 1994 contact points to provide 
            information published by that Party relating to land 
            transportation services regarding operating authority, safety 
            requirements, taxation, data, studies and technology, and to 
            provide assistance in contacting its relevant government 
            agencies. 
 
            Review Process 
 
            2.   The Commission shall, during the fifth year after the date 
            of entry into force of this Agreement and during every second 
            year thereafter until the liberalization for bus and truck 
            transportation set out in the Parties' Schedules to Annex I is 
            complete, receive and consider a report from the Parties that 
            assesses progress respecting liberalization, including: 
 
                 (a)  the effectiveness of the liberalization; 
 
                 (b)  specific problems for, or unanticipated effects on, 
                      each Party's bus and truck transportation industries 
                      arising from liberalization; and 
 
                 (c)  modifications to the period for liberalization. 
 
            The Commission shall endeavor to resolve any matter arising 
            from its consideration of a report. 
 
            3.   The Parties shall consult, no later than seven years after 
            the date of entry into force of this Agreement, to consider 
            further liberalization commitments. 
 
 
 
 
 
 
 
 
 
 
 
 
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