. /.WORLD TRADE
ORGANIZATIONS/CSS/W/129
30 November 2001
(01-6126)
Council for Trade in Services
Special SessionOriginal:  Spanish
COMMUNICATION FROM COSTA RICA1
Computer and Related Services
The following document has been received from the delegation of Costa Rica with the request
that it be circulated to the Members of the Council for Trade in Services.
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I. IMPORTANCE OF THE SECTOR
1. The computer industry in Costa Rica is of considerable economic significance owing to its
high growth rate during the past few years as a local industry with high value added.  For example,
studies have revealed2 that software production has a national value added exceeding 90 per cent.
2. The domestic computer industry has been dynamic, diversified and well accepted on
international markets, and it is made up for the most part of small and medium enterprises,
particularly in the case of companies focusing on software development.  Moreover, it is made up of
companies producing "tailor-made" application packages or systems for other companies or offering
advisory services in the area of so ftware development for other companies.
3. Almost all of the enterprises were set up during  the 1990s, led by a few pioneers which began
their work in the 1980s.  Some 83.5 per cent of the companies are locally owned, 12.4 per cent aremixed capital companies and the remaining 4.1 per cen t are foreign owned.  Half of the companies are
export-oriented.
4. Costa Rican software exports have undergone considerable growth over the past few years,
reaching US$50 million in 2000.  This has meant that  computer and related services now account for
a significant share of total exports alongside other important Costa Rican exports such as hairdryers,plants and shrubs, and melons – in fact, thei r share is now double that of sugar exports.
5. In spite of the importance and growth potential of this sector, Costa Rican software producers
face a number of barriers in other markets, in particular:
• Discriminatory tax treatment for foreigners;
• excessive capital transfer and/or repatriation taxes;
                                                     
1 This communication does not prejudge Costa Rica's position on this or other sectors or any future
offer in those sectors.  Costa Rica reserves the right to modify this proposal during the negotiations, and itshould not be analysed as a legal text.
2 Mata, Francisco and Jofré Arturo.  Informe Final Estudio de Oferta y Demanda del Recurso Humano .
June 2001.  Competitiveness Support Programme for the Software Development Sector in Costa Rica.S/CSS/W/129
Page 2
• restrictions on or excessive requirements for temporary entry and exit of specialized
technical personnel.
II. ANALYSIS OF NATIONAL SCHEDULES
6. Document S/C/W/45 of 14 June 1998 prepared by the WTO Secretariat shows a total of
62 GATS schedules containing commitments on computer and related services.  The number andlevel of commitments of WTO Members is not satisfactory.  There remain considerable restrictions
with respect to commercial presence (many of them horizontal) and with respect to the movement of
natural persons.  These commitments must be broadened, and restrictions with respect to national
treatment and market access eliminated, in particular those relating to cross-border supply,
commercial presence and the movement of natural persons.
III. PROPOSAL
7. Costa Rica considers this to be a highly important sector for world economic growth and for
the development of all WTO Members, in particular the developing countries.  Consequently, it
proposes:
• That WTO Members make new specific commitments in the computer and related
services area and extend the commitments already made to cover the four modes ofsupply, in particular cross-border supply, commercial presence and the movement of
natural persons;
• that the commitments made should cover all of the subcategories described in the
Services Sectoral Classification List (MTN.GNS/W/120), i.e.:  (a) consultancy
services related to the installation of computer hardware;  (b) software
implementation services;  (c) data processing services;  (d) database services;
(e) other computer and computer related services.  In the course of the negotiations,this classification should be reviewed in order to determine whether it corresponds
properly to the progress made in the sector.  This work should be based on the Central
Product Classification of the United Nations (CPC);
• that WTO Members eliminate all restrictions on national treatment and market access
in the computer and related services area.
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