. /.WORLD TRADE
ORGANIZATIONS/CSS/W/65
28 March 2001
(01-1528)
Council for Trade in Services
Special SessionOriginal:  English
COMMUNICATION FROM AUSTRALIA
Negotiating Proposal for Engineering Services
The following communication has been received from the delegation of Australia with the
request that it be circulated to the Members of the Council for Trade in Services.
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1. This paper sets out a negotiating proposal from Australia for the engineering services sector.
Australia reserves the right to submit further and more detailed proposals on this sector at a later date.
I. IMPORTANCE OF TRADE LIBERALISATION IN THE SECTOR
2. Engineering services are a vital element of the economic infrastructure of all WTO Members.
As noted by the WTO (S/C/W/44), measurement of the economic importance of engineering (and
architectural) services output is not straightforward to the extent that, in official statistics, it is mostoften absorbed in the broader categories of services output such as business services, or construction
activity. However, there is no doubt that engineering services is one of the larger professional services
sectors in most WTO member countries, and in many countries exports of architectural and
engineering services earn greater export income th an the construction and related engineering services
sector. Engineering service suppliers may be characterised by the dominance of small and medium
businesses, whose main costs are the salaries of their highly qualified personnel.
3. Engineering services are traded internati onally mainly through the establishment of
commercial presence by the foreign supplier in th e host country or temporary movements of skilled
personnel. To a growing extent the Internet is also making possible the supply of certain types of
engineering services via mode one – cross-border supply.
4. Further progressive trade liberalisation of engineering services through the GATS
negotiations offers Members the prospect of a greater range and depth of engineering services in theirlocal markets, higher operating standards, technology and skill transfer, and downward pressure on
costs.
5. Programs of capacity building in developing countries should also support trade liberalisation
in this sector, in order that adequate skills transfer and commercial development can occur.
II. IMPEDIMENTS TO FURTHER LIBERALISATION
6. Australia has identified a number of impediments to further liberalisation of the engineering
services sector.  These include:
• limitations on the type of commercial presence which can be established and foreign equity
limitationsS/CSS/W/65
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• restrictions on currency exchange and transfer of funds between projects
• inconsistency in the application of taxation laws on foreign engineers and commercial entities
• limited or no recognition of qualifications of foreign engineers
• different sub-federal regulations for recognition of qualifications
• restrictions on registration (eg citizenship or residency requirements), which prevent foreign
engineers from signing off on drawings and managing projects
• unduly onerous licensing requirements
• unduly onerous visa procedures.
III. PROPOSALS
7. Australia proposes that:
• Members review any limitations on commercial presence with a view to eliminating barriers
that cannot be justified on a commercial basis.
• Licensing requirements and administrative processes relating to the registration of foreign
engineers for practice in the host country be subject to a necessity test, as formulated inAustralia’s paper of 15 September 2000 (S/WPDR/W/8).  This would require that any
domestic regulation adopted to meet a legitimate policy objective be the least trade restrictivepossible.
• Members take stock of measures to fully implement GATS Article VII, paragraphs 3 and 5,
and undertake best endeavours to participate in and extend the membership of agreementswhich enable mutual recognition of engineering and engineering-related qualifications.
• Members ensure the implementation of GATS Article I:3(a): “each Member shall take such
reasonable measures as may be available to it to ensure” the observance of its GATScommitments “by regional and local governments and authorities and nongovernmental
bodies within its territory”. In particular, Members should ensure that recognition of
qualifications agreed at the central government level be implemented at the regional and local
level.
• Members examine rules relating to the movement of natural persons to ensure that processes
to facilitate the entry of foreign engineers that have approval to operate in another Member
country be carried out efficiently and expeditiously. In particular, temporary stay visas should
be issued expeditiously to allow engineers to undertake their projects in a timely manner.
• Disciplines be developed for the engineering services sector, building on those developed for
the accountancy profession (see WTO document S/L/64), strengthening and tailoring them to
meet the needs of engineering services exporters.
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