./.WORLD TRADE
ORGANIZATIONS/CSS/W/64
28 March 2001
(01-1527)
Council for Trade in Services
Special SessionOriginal:  English
COMMUNICATION FROM AUSTRALIA
Negotiating Proposal for Construction
and Related 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 construction and related
engineering services sector. Australia reserves the right to submit further and more detailed proposalson this sector at a later date.
I. IMPORTANCE OF TRADE LIBERALISATION IN THE SECTOR
2. Construction and related engineering services are a vital element of the economic
infrastructure of all WTO members. The WTO has noted that this sector is a major employer and that
the sector accounts for 5 to 7 per cent of GDP in most industrialised countries (S/C/W/38). Generally
speaking, construction services are traded internationally through the establishment of a local
presence by the foreign supplier in the host country and may involve large movements of skilledpersonnel.
3. Further progressive trade liberalisation of construction services through the GATS
negotiations offers members the prospect of a greater range and depth of construction services in their
local markets, higher operating standards, technology and skills transfer, and downward pressure on
costs.
4. Development and capacity-building programmes can also support trade liberalisation in this
sector by facilitating skills transfer and commercial development.
II. IMPEDIMENTS TO FURTHER LIBERALISATION
5. Australia has identified a number of impediments to further liberalisation of trade in
construction and related engineering services.  These include:
• limitations on the type of commercial presence which can be established and foreign equity
limitations;
• restrictions on currency exchange and transfer of funds between projects;S/CSS/W/64
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• inconsistency in the application of taxation laws on foreign professionals and commercial
entities in the construction sector;
• lack of  recognition of qualifications of professionally qualified project team members;
• unduly onerous licensing requirements for construction firms and subcontractors;
• unduly onerous visa procedures.
III. PROPOSALS
6. Australia proposes that:
• Members review any limitations on commercial presence with a view to eliminating barriers
that cannot be justified on a commercial basis.
• Members take stock of measures to fully im plement GATS Article VII paragraphs 3 and 5,
and undertake best endeavours to participate in and extend the membership of agreements
which enable mutual recognition of engineering and other construction-related professional
qualifications.
• Licensing procedures and requirements for construction firms and subcontractors be subject
to a necessity test, as formulated in Australia’s paper of 15 September 2000 (S/WPDR/W/8).
This would require that any domestic regulation adopted to meet a legitimate policy objectivebe the least trade restrictive possible.
• Members examine rules relating to the movement of natural persons to ensure that processes
to facilitate the entry of employees and contractors of firms who have approval to operate inanother Member country are carried out efficiently and expeditiously.
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