WORLD TRADE
ORGANIZATIONS/CSS/W/75
4 May 2001
(01-2362)
Council for Trade in Services
Special SessionOriginal:  French
COMMUNICATION FROM SWITZERLAND
GATS 2000:  Professional Services
The following communication has been received from the delegation of Switzerland with the
request that it be circulated to members of the Council for Trade in Services.
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I. IMPORTANCE OF THE SECTOR
1. Professional services are very wide ranging and heterogeneous, but form an important group
of services in which delivery is experiencing increasingly dynamic growth.
2. Their characteristics differ markedly from one sector to another.  The legal services sector, for
example, has experienced steady growth in the past decades as a consequence of the growth in
international trade and of the emergence of new fields of practice, in particular in the area of business
law.  The profession has become internationalized, and more and more frequently lawyers are having
to conduct transactions extending across nation al borders and involving several jurisdictions.
3. In the accounting services sector, the market is dominated by large multinational firms which
have succeeded in establishing an international netw ork of companies so that local specificities, still
very common in this sector, can be accommodated.  These multinationals currently employ nearly
half a million people worldwide.  Architectural and engineering services, on the other hand, tend
traditionally to be local or regional.
4. The increasingly widespread development of the Internet is opening up new prospects for all
professions and will lead to strong growth in cross-border trade (mode 1) in these services.
5. The professional services sector is of particular importance to Switzerland, where there is a
high density of small and medium-sized enterprises or individual firms active in this high-value-added
sector.  In view of the high level of knowledge available in numerous countries, open markets incountries which traditionally import this type of service would be an incentive to the transfer of know-
how and hence benefit many countries.
II. CLASSIFICATION ISSUES
This proposal covers the following services:
- Legal services (advisory services concerning home country law and public
international law);
- accounting, auditing and bookkeeping services;S/CSS/W/75
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- taxation services;
- architectural services;- engineering services;- integrated engineering services;- urban planning and landscape architectural services.
III. PROPOSAL ON SPECIFIC COMMITMENTS
(i) Existing commitments
6. Generally speaking, professional services are a sector in which broad commitments have been
made in respect of the GATS market access and national treatment.  Depending on the activity, the
number of Members who have made such commitm ents varies between 60 and 90.  Approximately
half the Members have made full commitments, and the other half have entered some reservations
with their commitments.  On that basis, it can be estimated that approximately 90 per cent of worldtrade in professional services is covered by specific commitments.  The latter are nonetheless
accompanied by reservations which need to be eliminated.
(ii) Obstacles to liberalization
7. The first point to be noted is that in the various professional service subsectors, there are
numerous obstacles to the development of trade that have to do with countries' local characteristics.Local conditions can vary greatly from one market to another, and very often it is difficult for foreign
service suppliers to understand them and use them to best-effect.  And their difficulties do not end
there.  Quite apart from the question of the recognit ion of their qualifications, acquired in another
country, foreign service suppliers come up against nationality or residency requirements and
restrictions on investment and forms of commercial presence.  Residency requirements may beperceived as particularly burdensome at a time of explosive growth in the Internet and services
supplied under mode 1 (cross-border).  Lastly, foreign service suppliers have to overcome obstacles to
the movement of persons (mode 4).
(iii) Objectives
8. Switzerland proposes eliminating nationality and residency requirements and adjusting certain
others, particularly, those concerning membership of local professional associations and forms of
establishment.  Many such restrictions currently in force can be replaced by measures which are lessdiscriminatory yet suited to ensuring observance of the constraints referred to in the previous
paragraph.
9. Furthermore, Switzerland acknowledges that the movement of persons is particularly
important for the professional services sector and proposes that Members discuss ways and means of
reducing obstacles to the movement of persons in order to facilitate the supply of this type of serviceby natural persons.
10. Switzerland's aim in submitting this proposal is to contribute to the discussions on reducing
barriers which cause trade distortions.  It is not a question of endangering the service quality or
consumer protection.S/CSS/W/75
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IV. PROPOSAL ON REGULATORY DISCIPLINES
11. Improving Members' specific commitments in the areas of market access and national
treatment is only a first step towards real liberalization.  Current work in the Working Party on
Domestic Regulation (WPDR) has shown that domestic regulation issues are becoming an
increasingly important aspect of the liberalization of trade in services in order to secure effective
market access.  Experience clearly shows that measures pertaining to the definition and
implementation of licensing and qualification requirements and procedures as well as of technical
standards can seriously affect the actual conditions of access for foreign services and foreign service
suppliers.  Generally speaking, with a growing level of market access and national treatment
commitments, the relevance of GATS Article VI measures for effective market access will inevitably
become greater.
12. The ongoing discussion in the WPDR on concepts relating to the development of regulatory
disciplines is very useful as a means of clarifying the important concepts of necessity and
transparency.  In Switzerland's view, these two concepts are obviously linked and transparency must
not be treated as an end in itself, but rather as a tool with which to implement the needs test
effectively.
13. In addition to the general principles that Article VI is meant to provide, the discussions have
shown the need for specific disciplines in individual sectors, particularly in sectors where there are
regulatory constraints that substantially affect the conditions of trade.  The services industry is known
to be highly regulated, so that effective access to foreign markets by service suppliers may require, at
least in some subsectors, some degree of specification of the general principles contained in GATS
Article VI.  The reference paper for telecommunication services and the Article VI disciplines onaccountancy services are examples.  We believe that further disciplines of this kind should be
envisaged in other sectors and could provide a basis for additional commitments.  Recent
consultations with professional services organizations tend to show that the disciplines on
accountancy services could be transposed, with some changes, to other sectors.
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