Chapter 9: Cross-Border Trade in Services
Article 9.1: Definitions
For the purposes of this Chapter:
airport operation services means the supply of air terminal, airfield and other airport infrastructure operation services on a fee or contract basis. Airport operation services do not include air navigation services;
computer reservation system services means services provided by computerised systems that contain information about air carriers' schedules, availability, fares and fare rules, through which reservations can be made or tickets may be issued;
cross-border trade in services or cross-border supply of services means the supply of a service:
- from the territory of a Party into the territory of the other Party;
- in the territory of a Party to a person of the other Party; or
- by a national of a Party in the territory of the other Party,
but does not include the supply of a service in the territory of a Party by a covered investment;
enterprise means an enterprise as defined in Article 1.3 (General Definitions), and a branch of an enterprise;
ground handling services means the supply at an airport, on a fee or contract basis, of the following services: airline representation, administration and supervision; passenger handling; baggage handling; ramp services; catering, except the preparation of the food; air cargo and mail handling; fuelling of an aircraft; aircraft servicing and cleaning; surface transport; and flight operations, crew administration and flight planning. Ground handling services do not include: self-handling; security; line maintenance; aircraft repair and maintenance; or management or operation of essential centralised airport infrastructure, such as de-icing facilities, fuel distribution systems, baggage handling systems and fixed intra-airport transport systems;
measures adopted or maintained by a Party means measures adopted or maintained by:
- central, regional, or local governments or authorities; or
- non-governmental bodies in the exercise of powers delegated by central, regional, or local governments or authorities;
selling and marketing of air transport services means opportunities for the air carrier concerned to sell and market freely its air transport services including all aspects of marketing such as market research, advertising and distribution. These activities do not include the pricing of air transport services or the applicable conditions;
service supplied in the exercise of governmental authority means, for each Party, any service that is supplied neither on a commercial basis nor in competition with one or more service suppliers;
service supplier of a Party means a person of a Party that seeks to supply or supplies a service; and
specialty air services means any specialised commercial operation using an aircraft whose primary purpose is not the transportation of goods or passengers, such as aerial fire-fighting, flight training, sightseeing, spraying, surveying, mapping, photography, parachute jumping, glider towing, and helicopter-lift for logging and construction, and other airborne agricultural, industrial and inspection services.
Article 9.2: Scope
1. This Chapter shall apply to measures adopted or maintained by a Party affecting cross-border trade in services by service suppliers of the other Party. Such measures include measures affecting:
- the production, distribution, marketing, sale or delivery of a service;
- the purchase or use of, or payment for, a service;
- the access to and use of distribution, transport or telecommunications networks and services in connection with the supply of a service;
- the presence in the Party's territory of a service supplier of the other Party; and
- the provision of a bond or other form of financial security as a condition for the supply of a service.
2. In addition to paragraph 1, Article 9.5, Article 9.8 and Article 9.11 shall also apply to measures adopted or maintained by a Party affecting the supply of a service in its territory by a covered investment1.
3. This Chapter shall not apply to:
- financial services as defined in Article 10.1 (Definitions), except that paragraph 2 shall apply if the financial service is supplied by a covered investment that is not a covered investment in a financial institution as defined in Article 10.1 (Definitions) in the Party's territory;
- government procurement;
- services supplied in the exercise of governmental authority; or
- subsidies or grants provided by a Party, including government-supported loans, guarantees and insurance.
4. This Chapter does not impose any obligation on a Party with respect to a national of the other Party who seeks access to its employment market or who is employed on a permanent basis in its territory, and does not confer any right on that national with respect to that access or employment.
5. This Chapter shall not apply to air services, including domestic and international air transportation services, whether scheduled or non-scheduled, or to related services in support of air services, other than the following:
- aircraft repair and maintenance services during which an aircraft is withdrawn from service, excluding so-called line maintenance;
- selling and marketing of air transport services;
- computer reservation system services;
- specialty air services;
- airport operation services; and
- ground handling services.
6. In the event of any inconsistency between this Chapter and a bilateral, plurilateral or multilateral air services agreement to which both Parties are party, the air services agreement shall prevail in determining the rights and obligations of the Parties.
7. If the Parties have the same obligations under this Agreement and a bilateral, plurilateral or multilateral air services agreement, they may invoke the dispute settlement procedures of this Agreement only after any dispute settlement procedures in the other agreement have been exhausted.
8. If the Annex on Air Transport Services of GATS is amended, the Parties shall jointly review any new definitions with a view to aligning the definitions in this Agreement with those definitions, as appropriate.
Article 9.3: National Treatment2
1. Each Party shall accord to services and service suppliers of the other Party, treatment no less favourable than that it accords, in like circumstances, to its own services and service suppliers.
2. For greater certainty, the treatment to be accorded by a Party under paragraph 1 means, with respect to a regional level of government, treatment no less favourable than the most favourable treatment accorded, in like circumstances, by that regional level of government to service suppliers of the Party of which it forms a part.
Article 9.4: Most-Favoured-Nation Treatment
Each Party shall accord to services and service suppliers of the other Party treatment no less favourable than that it accords, in like circumstances, to services and service suppliers of a non-Party.
Article 9.5: Market Access
Neither Party shall adopt or maintain, either on the basis of a regional subdivision or on the basis of its entire territory, measures that:
- impose limitations on:
- the number of service suppliers, whether in the form of numerical quotas, monopolies, exclusive service suppliers or the requirement of an economic needs test;
- the total value of service transactions or assets in the form of numerical quotas or the requirement of an economic needs test;
- the total number of service operations or the total quantity of service output expressed in terms of designated numerical units in the form of quotas or the requirement of an economic needs test;3 or
- the total number of natural persons that may be employed in a particular service sector or that a service supplier may employ and who are necessary for, and directly related to, the supply of a specific service in the form of numerical quotas or the requirement of an economic needs test; or
- restrict or require specific types of legal entity or joint venture through which a service supplier may supply a service.
Article 9.6: Local Presence
Neither Party shall require a service supplier of the other Party to establish or maintain a representative office or any form of enterprise, or to be resident, in its territory as a condition for the cross-border supply of a service.
Article 9.7: Non-Conforming Measures
1. Article 9.3, Article 9.4, Article 9.5 and Article 9.6 shall not apply to:
- any existing non-conforming measure that is maintained by a Party at:
- the central level of government, as set out by that Party in its Schedule to Annex I;
- a regional level of government, as set out by that Party in its Schedule to Annex I; or
- a local level of government;
- the continuation or prompt renewal of any non-conforming measure referred to in subparagraph (a); or
- 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 Article 9.3, Article 9.4, Article 9.5 or Article 9.6.
2. Article 9.3, Article 9.4, Article 9.5 and Article 9.6 shall not apply to any measure that a Party adopts or maintains with respect to sectors, sub-sectors or activities, as set out by that Party in its Schedule to Annex II.
3. If a Party considers that a non-conforming measure applied by a regional level of government of the other Party, as referred to in subparagraph 1(a)(ii), creates a material impediment to the cross-border supply of services in relation to the former Party, it may request consultations with regard to that measure. The Parties shall enter into consultations with a view to exchanging information on the operation of the measure and to considering whether further steps are necessary and appropriate.4
Article 9.8: Domestic Regulation
1. Each Party shall ensure that all measures of general application affecting trade in services are administered in a reasonable, objective and impartial manner.
2. With a view to ensuring that measures relating to qualification requirements and procedures, technical standards and licensing requirements do not constitute unnecessary barriers to trade in services, while recognising the right to regulate and to introduce new regulations on the supply of services in order to meet its policy objectives, each Party shall endeavour to ensure that any such measures that it adopts or maintains are:
- based on objective and transparent criteria, such as competence and the ability to supply the service;
- not more burdensome than necessary to ensure the quality of the service; and
- in the case of licensing procedures, not in themselves a restriction on the supply of the service.
3. In determining whether a Party is in conformity with its obligations under paragraph 2, account shall be taken of international standards of relevant international organisations applied by that Party.5
4. If a Party requires authorisation for the supply of a service, it
- within a reasonable period of time after the submission of an application considered complete under its laws and regulations, inform the applicant of the decision concerning the application;
- to the extent practicable, establish an indicative timeframe for the processing of an application;
- if an application is rejected, to the extent practicable, inform the applicant of the reasons for the rejection, either directly or on request, as appropriate;
- on request of the applicant, provide, without undue delay, information concerning the status of the application;
- to the extent practicable, provide the applicant with the opportunity to correct minor errors and omissions in the application and endeavour to provide guidance on the additional information required;
- if they deem appropriate, accept copies of documents that are authenticated in accordance with the Party's laws in place of original documents;
- reach and administer its decisions in an independent manner and that the procedures are impartial;
- avoid requiring an applicant to approach more than one competent authority for each application for authorisation; and
- taking into account their competing priorities and resource constraints, endeavour to accept applications in electronic format.
5. Each Party shall ensure that any authorisation fee charged by any of its competent authorities is reasonable, transparent and does not, in itself, restrict the supply of the relevant service.6
6. The Party shall make publicly available the information necessary for service suppliers to comply with the requirements and procedures for obtaining, maintaining, amending and renewing such authorisation. Such information shall include, inter alia, where it exists:
- contact information of relevant competent authorities;
- procedures for appeal or review of decisions concerning applications;
- procedures for monitoring or enforcing compliance with the terms and conditions of licenses;
- opportunities for public involvement, such as through hearings or comments;
- indicative timeframes for processing of an application;
- the requirements and procedures; and
- technical standards.
7. If licensing or qualification requirements include the completion of an examination, each Party shall ensure that:
- the examination is scheduled at reasonable intervals; and
- a reasonable period of time is provided to enable interested persons to submit an application.
8. Each Party shall ensure that there are procedures in place domestically to assess the competency of professionals of the other Party.
9. Paragraphs 1 through 8 shall not apply to the non-conforming aspects of measures that are not subject to the obligations under Article 9.3 or Article 9.5 by reason of an entry in either Party's Schedule to Annex I, or to measures that are not subject to the obligations under Article 9.3 or Article 9.5 by reason of an entry in either Party's Schedule to Annex II.
10. If the results of the negotiations related to paragraph 4 of Article VI of GATS, or the results of any similar negotiations undertaken in other multilateral fora in which the Parties participate, enter into effect, the Parties shall jointly review these results with a view to bringing them into effect, as appropriate, under this Agreement.
Article 9.9: Recognition
1. For the purposes of the fulfilment, in whole or in part, of a Party's standards or criteria for the authorisation, licensing or certification of service suppliers, and subject to the requirements of paragraph 4, it may recognise the education or experience obtained, requirements met, or licences or certifications granted, in the territory of the other Party or a non-Party. That recognition, which may be achieved through harmonisation or otherwise, may be based on an agreement or arrangement with the Party or non-Party concerned, or may be accorded autonomously.
2. If a Party recognises, autonomously or by agreement or arrangement, the education or experience obtained, requirements met, or licences or certifications granted, in the territory of a non-Party, nothing in Article 9.4 shall be construed to require the Party to accord recognition to the education or experience obtained, requirements met, or licences or certifications granted, in the territory of the other Party.
3. A Party that is a party to an agreement or arrangement of the type referred to in paragraph 1, whether existing or future, shall afford adequate opportunity to the other Party, on request, to negotiate its accession to that agreement or arrangement, or to negotiate a comparable agreement or arrangement. If a Party accords recognition autonomously, it shall afford adequate opportunity to the other Party to demonstrate that education, experience, licences or certifications obtained or requirements met in that Party's territory should be recognised.
4. A Party shall not accord recognition in a manner that would constitute a means of discrimination between the Parties or between a Party and non-Parties in the application of its standards or criteria for the authorisation, licensing or certification of service suppliers, or a disguised restriction on trade in services.
5. As set out in Annex 9-A, the Parties shall endeavour to facilitate trade in professional services, including through the establishment of a Professional Services Working Group.
Article 9.10: Denial of Benefits
1. A Party may deny the benefits of this Chapter to a service supplier of the other Party if the service supplier is an enterprise owned or controlled by persons of a non-Party, and the denying Party adopts or maintains measures with respect to the non-Party or a person of 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.
2. A Party may deny the benefits of this Chapter to a service supplier of the other Party if the service supplier is an enterprise owned or controlled by persons of a non-Party or by persons of the denying Party that has no substantial business activities in the territory of the other Party.
Article 9.11: Transparency
1. Each Party shall maintain or establish appropriate mechanisms for responding to inquiries from interested persons regarding its regulations that relate to the subject matter of this Chapter.7
2. If a Party does not provide advance notice and opportunity for comment pursuant to Article 25.2.2 (Publication) with respect to regulations that relate to the subject matter in this Chapter, it shall, to the extent practicable, provide in writing or otherwise notify interested persons of the reasons for not doing so.
3. To the extent possible, each Party shall allow reasonable time between publication of final regulations and the date when they enter into effect.
Article 9.12: Payments and Transfers
1. Each Party shall permit all transfers and payments that relate to the cross-border supply of services to be made freely and without delay into and out of its territory.
2. Each Party shall permit transfers and payments that relate to the cross-border supply of services to be made in a freely usable currency at the market rate of exchange that prevails at the time of transfer.
3. Notwithstanding paragraphs 1 and 2, a Party may prevent or delay a transfer or payment through the equitable, non-discriminatory and good faith application of its laws and regulations8 that relate to:
- bankruptcy, insolvency or the protection of the rights of creditors;
- issuing, trading or dealing in securities, futures, options or derivatives;
- financial reporting or record keeping of transfers when necessary to assist law enforcement or financial regulatory authorities;
- criminal or penal offences; or
- ensuring compliance with orders or judgments in judicial or administrative proceedings.
Annex 9-A: Professional services
1. Each Party shall encourage its relevant bodies to establish or maintain dialogues with the relevant bodies of the other Party with the aim of facilitating the supply of professional services between the Parties through greater recognition of education or experience obtained in the territory of the other Party. This includes encouraging relevant professional bodies to engage in cooperation with a view to formalising recognition of licensing, registration and professional standards.
2. Each Party shall encourage its relevant bodies to take into account agreements that relate to professional services in the development of agreements on the recognition of professional qualifications, licensing and registration.
3. A Party may consider, if feasible, taking steps to implement a temporary or project specific licensing or registration regime based on a foreign supplier's home licence or recognised professional body membership, without the need for further written examination. That temporary or limited licence regime should not operate to prevent a foreign supplier from gaining a local licence once that supplier satisfies the applicable local licensing requirements.
Engineering and Architectural Services
4. Further to paragraph 2, the Parties recognise the work in APEC to promote the mutual recognition of professional competence in engineering and architecture, and the professional mobility of these professions, under the APEC Engineer and APEC Architect frameworks.
5. Each Party shall encourage its relevant bodies to work towards becoming authorised to operate APEC Engineer and APEC Architect Registers.
6. A Party shall encourage its relevant bodies operating APEC Engineer or APEC Architect Registers to enter into mutual recognition arrangements with the relevant bodies of the other Party operating those registers.
7. The Parties recognise that transnational legal services that cover the laws of multiple jurisdictions play an essential role in facilitating trade and investment and in promoting economic growth and business confidence.
8. If a Party regulates or seeks to regulate foreign lawyers and transnational legal practice, the Party shall encourage its relevant bodies to consider, subject to its laws and regulations, whether or in what manner:
- foreign lawyers may practise foreign law on the basis of their right to practise that law in their home jurisdiction;
- foreign lawyers may prepare for and appear in commercial arbitration, conciliation and mediation proceedings;
- local ethical, conduct and disciplinary standards are applied to foreign lawyers in a manner that is no more burdensome for foreign lawyers than the requirements imposed on domestic (host country) lawyers;
- alternatives for minimum residency requirements are provided for foreign lawyers, such as requirements that foreign lawyers disclose to clients their status as a foreign lawyer, or maintain professional indemnity insurance or alternatively disclose to clients that they lack that insurance;
- the following modes of providing transnational legal services are accommodated:
- on a temporary fly-in, fly-out basis;
- through the use of web-based or telecommunications technology;
- by establishing a commercial presence; and
- through a combination of fly-in, fly-out and one or both of the other modes listed in subparagraphs (ii) and (iii);
- foreign lawyers and domestic (host country) lawyers may work together in the delivery of fully integrated transnational legal services; and
- a foreign law firm may use the firm name of its choice.
Professional Services Working Group
9. The Parties hereby establish a Professional Services Working Group, which shall:
- meet on request of the Joint Commission to ensure the observance of and discuss progress towards the objectives in paragraphs 1 through 3; and
- support the Parties' relevant professional and regulatory bodies in pursuing the activities listed in paragraphs 1 through 3.
1 For greater certainty, nothing in this Chapter, including Annex 9-A, is subject to investor-state dispute settlement pursuant to Section B of Chapter 8 (Investment).
2 For greater certainty, whether treatment is accorded in "like circumstances" under Article 9.3 or Article 9.4 depends on the totality of the circumstances, including whether the relevant treatment distinguishes between services or service suppliers on the basis of legitimate public welfare objectives.
3 Subparagraph (a)(iii) does not cover measures of a Party which limit inputs for the supply of services.
4 For greater certainty, a Party may request consultations with the other Party regarding non-conforming measures applied by the central level of government, as referred to in subparagraph 1(a)(i).
5 "Relevant international organisations" refers to international bodies whose membership is open to the relevant bodies of both Parties to the Agreement.
6 For the purposes of this paragraph, authorisation fees do not include fees for the use of natural resources, payments for auction, tendering or other non-discriminatory means of awarding concessions, or mandated contributions to universal service provision.
7 The implementation of the obligation to maintain or establish appropriate mechanisms may need to take into account the resource and budget constraints of small administrative agencies.
8 For greater certainty, this Article does not preclude the equitable, non-discriminatory and good faith application of a Party's laws and regulations relating to its social security, public retirement or compulsory savings programmes.