WT/REG364/1  
18 April 2016  
(16-2173)  Page: 1/46  
Committee on Regional Trade Agreements   
 
FACTUAL PRESENTATION 
FREE TRADE AGREEMENT BETWEEN  CANADA AND HONDURAS 
(GOODS AND SERVICES) 
Report by the Secretariat 
This report, prepared for the considerat ion of the Free Trade Agreement between 
Canada and Honduras, has been drawn up by the WTO Secretariat on its own 
responsibility and in full consultation with the Parties. The factual presentation 
reproduces as closely as possible the terminology used in the Agreement and in the comments provided and does not imply offi cial endorsement or acceptance by the 
Secretariat of such terminology. The report has been drawn up in accordance with the 
rules and procedures contained in the Decision for a Transparency Mechanism for 
Regional Trade Agreements (WT/L/671) and thus does not imply any value judgement by the Secretariat regarding the contents of the Agreement. 
Any technical questions arising from this report may be addressed to Jo-Ann Crawford 
(tel: +41 22 739 5422). Any statistical questions arising from this report may be addressed to Thakur Parajuli (tel: +41 22 739 5473). 
 
 WT/REG364/1 
 
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TABLE OF CONTENTS 
Page 
1   TRADE ENVIRONMENT ................................................................................................. 4  
1.1   Merchand ise trade ..................................................................................................... 4  
1.2   Trade in servic es and inve stment ................................................................................. 6  
2   CHARACTERISTIC ELEMEN TS OF THE AG REEMENT ...................................................... 9  
2.1   Background  Information ............................................................................................. 9  
3   PROVISIONS ON TRADE IN GOODS ........................................................................... 10  
3.1   Import duties and charges,  and quantitative  restrict ions ................................................ 10 
3.1.1   Genera l provisions ................................................................................................. 10 
3.1.2   Liberalization of  trade and ta riff lines ........................................................................ 11 
3.1.3   Liberali zation schedule............................................................................................ 11 
3.1.3.1   Canada .............................................................................................................. 11 
3.1.3.2   Honduras ........................................................................................................... 13 
3.1.4   Tariff rate quotas ................................................................................................... 15 
3.2   Rules of origin .......................................................................................................... 15 
3.2.1   Customs-re lated procedures .................................................................................... 16 
3.3   Export duties and charges,  and quantitative  restrictions ................................................. 16 
3.4   Regulatory provisions on trade in goods ....................................................................... 17 
3.4.1   Standards ............................................................................................................. 17 
3.4.1.1   Sanitary and phytosanitary measures .................................................................... 17 
3.4.1.2   Technical barriers to trade .................................................................................... 17 
3.4.2   Safeguard mechanisms ........................................................................................... 17 
3.4.2.1   Global safeguards ............................................................................................... 17 
3.4.2.2   Bilateral safeguards ............................................................................................. 17 
3.4.2.3   Balance of payments safeguards ........................................................................... 17 
3.4.2.4   Special safeguards .............................................................................................. 18 
3.4.3   Anti-dumping and countervailing measures ............................................................... 18 
3.4.4   Subsidie s and State-aid .......................................................................................... 19 
3.4.5   Trade Facilitation ................................................................................................... 19 
3.5   Sector-specific provis ions on trad e in goods ................................................................. 20 
3.5.1   Dist illed Spir its ..................................................................................................... . 20 
3.5.2   Sugar ................................................................................................................... 20 
3.5.3   Textiles and apparel ............................................................................................... 20 
4   PROVISIONS ON TRADE IN SERVICES ....................................................................... 21  
4.1   Scope and definitions ................................................................................................ 21 
4.2   Denial of benefits ..................................................................................................... 21 
4.3   General provisions on trade in services and investment .................................................. 21 
4.3.1   Mark et acce ss ....................................................................................................... 21 WT/REG364/1 
 
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  4.3.2   National and MFN tr eatment .................................................................................... 22 
4.3.3   Local presence ...................................................................................................... 22 
4.3.4   In vestme nt ........................................................................................................... 22 
4.3.5   Movement of  natural persons .................................................................................. 22 
4.3.6   Performanc e Requirements ..................................................................................... 23 
4.3.7   Senior Managers and Board of Directors .................................................................... 23 
4.4   Liberalization commitments ........................................................................................ 23 
4.4.1   Canada ................................................................................................................  23 
4.4.1.1   Canada's sector-specific commitments on trad e in services ....................................... 24 
4.4.2   Honduras .............................................................................................................. 27 
4.4.2.1   Honduras' sector-specific commitments on trad e in services ...................................... 27 
4.5   Regulatory provisions ................................................................................................ 30 
4.5.1   Domestic regulation ............................................................................................... 30 
4.5.2   Recognition ........................................................................................................... 31 
4.5.3   Subsidies .............................................................................................................. 31 
4.5.4   Safeguards ........................................................................................................... 31 
4.5.5   Other ................................................................................................................. .. 31 
4.6   Sector specific provis ions on trade in services ............................................................... 31 
4.6.1   Telecommunications ............................................................................................... 31 
4.6.2   Financial Services .................................................................................................. 32 
5   GENERAL PROVISIONS  OF THE AGREEMENT ............................................................. 34  
5.1   Tran sparency ........................................................................................................... 34 
5.2   Current payments and capital movements .................................................................... 34 
5.3   Exceptions ............................................................................................................... 34 
5.4   Balance of Pa yments Safe guards ................................................................................ 35 
5.5   Accession and Withdrawal .......................................................................................... 36 
5.6   Institutio nal framework ............................................................................................. 36 
5.7   Disput e settlement ................................................................................................... 36 
5.8   Relationship with other agr eements concluded by the Parties .......................................... 37 
5.9   Government  procurement .......................................................................................... 38 
5.10   Intellectual property rights ....................................................................................... 40 
5.11   Other .................................................................................................................. .. 40 
5.11.1   Competition Policy, Monopolies and State Enterprises ................................................ 40 
5.11.2   Electronic Commerce ............................................................................................ 41 
5.11.3   En vironm ent ....................................................................................................... 41 
5.11.4   Labour ...............................................................................................................  41 
ANNEX 1 ....................................................................................................................... . 42 
ANNEX 2 ....................................................................................................................... . 46 
 WT/REG364/1 
 
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Key Facts 
 
Parties to the Agreement: Canada and Honduras  
 
Date of Signature:   5 November 2013 
 
Date of Entry into Force: 1 October 2014 
 
Date of Notification:  5 February 2015 
 
Full implementation:  1 January  2028 
 
 
1  TRADE ENVIRONMENT 
1.1.  The Free Trade Agreement between Canada and Honduras, hereinafter referred to as "the 
Agreement" is Canada's 10th RTA and Honduras' 10th RTA notified to the WTO.  
1.1  Merchandise trade 
1.2.  With a GDP of US$1,787 billion and a population of 36 million, in 2014, Canada's total 
merchandise trade was valued at US$950 billion (exports of US$475 billion and imports of 
US$475 billion); in the same year Honduras had a population of 8 million, while its total trade was 
US$19.1 billion (exports of US$8.1 billion an d imports of US$11.1 billion) and a GDP of 
US$19.4 billion.1  
1.3.  Canada exports mostly manufactured goods followed by fuels and mining products while 
Honduras exports mostly manufactured goods followed by agricultural products. Manufactured 
goods account for the lion's share of both Parties' imports. For Canada, the United States, EU(28) and China are its top three destinations in terms of both imports and exports. For Honduras, the 
United States, EU(28) and El Salvador are the ma in export destinations for its goods, while the 
United States, China and Mexico are the main import sources.  
1.4.  In 2013, Canada's shares in total world exports and imports were 2.44% and 2.51% 
respectively, while Honduras' shares were 0.04% for exports and 0.06% for imports. Canada 
ranked 8
th in the world as an exporter of goods and 7th in terms of imports compared to Honduras' 
rankings at 76th for exports and 73rd for imports. 
1.5.  Charts 1.1-1.2 summarize the trends in global trade of the Parties as well as bilateral trade 
relations between them. Canada's merchandise trade has expanded, with imports rising from 
US$222.4 billion in 2002 to US$462 billion in 2014, and exports from US$252.6 billion to US$472.9 billion. After falling in 2009, trade recovered, but has been more or less flat since 2011, 
in US dollar terms. In the early 2000's, Canada ran a global merchandise trade surplus. Over the 
past three years trade was more or less balanced. From 2002, Honduras' total imports and exports rose with imports outpacing exports, resulting in a widening trade deficit. Imports have grown from US$2.9 billion in 2002 to US$8.0 billion in 2014, while exports grew from US$0.97 billion to 
US$4.5 billion over the same period. Bilateral trade has generally expanded during this period 
though the figures reported by the Parties show considerable discrepancy, with Canada's figures 
showing a bilateral trade deficit with Honduras over the period, while Honduras' figures report a 
deficit with Canada in most  of the period surveyed.  
                                               
1 Figures in this section unless indicated otherwise are from the WTO Trade Profiles as of September 
2015 (2014 data) and the UNSD/Comtrade database. Export figures are calculated f.o.b. and imports c.i.f. 
World trade rankings exclude intra-EU trade. WT/REG364/1 
 
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  Chart 1.1 Canada and Honduras: Merchandise bilateral trade and with world 
050100150200250300350400450500550
01,0002,0003,0004,0005,0006,0007,0008,0009,00010,000
2000 2002 2004 2006 2008 2010 2012 2014B. Honduras 2000-2014
(US$ millions)
Imports from Canada (Right Axis)
Export to Canada (Right Axis)
Total Imports
Total Exports
050100150200250300350400450500550
0100,000200,000300,000400,000500,000600,000700,000800,000
2000 2002 2004 2006 2008 2010 2012 2014A. Canada 2000-2014 
(US$ millions)
Imports from Honduras (Right Axis)
Export to Honduras (Right Axis)
Total Imports
Total Exports
 
Source: UNSD Comtrade database and Global Trade Atlas (data for Honduras for 2008 and 2013-2014). 
 
1.6.  The commodity structure of trade among the Parties, as well as of their imports and exports 
to the world in the period 2012-2014, is shown in Chart 1.2 on the basis of Harmonized System 
(HS) sections. Over the period, Canada's four largest export product categories – minerals, vehicles, machinery, and base metals – made up 61.4% of its total exports and accounted for 36.4% of Honduras' imports from Canada. Over the same period, the four largest export product 
categories from Honduras –vegetables, prepared foodstuffs, live animals, and machinery – made 
up 60.9% of its total exports and accounted for 58.6% of Canada's bilateral imports from Honduras. WT/REG364/1 
 
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  Chart 1.2 Canada and Honduras: Product co mposition of merchandise trade, annual 
average (2012-2014) 
38
361253221Canada imports from Honduras (%)
24
17
1287543333226Canada's Global Imports (%)
29
16
107655443328Canada's Global Exports (%)
39
18147652625Honduras's imports from Canada (%)
25
14
1310666542225Honduras's Global Imports (%)
33
10
99765554323Honduras's Global Exports (%)Total: US$ 0.22 billion Total: US$ 462 billion
Total: US$ 8.4 billion Total: US$ 4.3 billionTotal:  US$ 461 billion
Total: US$ 0.05 billion
 
Source: UNSD, Comtrade database (Canad a) and Global Trade Atlas (Honduras). 
1.2  Trade in services and investment 
1.7.  In 2014, Canada's share of total world commercial services exports was 1.72%, while its 
imports accounted for 2.22% of world imports. Honduras' share represented 0.05% and 0.04% of world exports and imports, respectively. Canada's total commercial services exports amounted to 
US$84.9 billion and its imports to US$106 billion, while Honduras had exports of US$2.6 billion 
and imports of US$1.7 billion.
2 
1.8.  Chart 1.3 shows Canada's global imports and exports of services for the period 2005-2013. 
Other services, travel, other business services and transport services account for the largest share 
of Canada's services imports over the period. The same four categories account for the largest share of its services exports. 
                                               
2 WTO Trade Profiles 2015 (2014 data).  WT/REG364/1 
 
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  Chart 1.3 Canada: Trade in commerc ial services with world, 2005-2013 
020406080100120140160180
2005 2007 2009 2011 2013A. Canada  imports from world
2005-2013
(US$ Billion)
Other services Personal,  cultural, and recreational  services
Other business services Telecommunications,  computer,  and information  services
Charges for the use of intellectual  property n.i.e. Financial services
Insurance  and pension services Construction
Travel Transport020406080100120140160180
2005 2007 2009 2011 2013B. Canada exports to world
2005-2013
(US$ Billion)
 
Source: WTO Statistics da tabase based on BMP6. 
 
1.9.  Chart 1.4 shows Honduras' global imports and exports of services for the period 2005-2013. 
Transport services, travel, and other services account for the largest share of Honduras' services imports over the period, while travel services, other services and telecommunications, computer 
and information services account for the largest share of its services exports. 
Chart 1.4 Honduras: Trade in commercial services with world, 2005-2013 
0.01.02.03.0
2005 2007 2009 2011 2013A. Honduras imports from world
2005-2013
(US$ Billion)
Other services Personal,  cultural, and recreational  services
Other business services Telecommunications,  computer,  and information  services
Charges for the use of intellectual  property n.i.e. Financial services
Insurance  and pension services Construction
Travel Transport0.00.20.40.60.81.01.21.41.6
2005 2007 2009 2011 2013B. Honduras exports to world
2005-2013
(US$ Billion)
 
Source: WTO Statistics da tabase based on BMP6. 
 
1.10.  Canada's FDI stock and flow with the world for the period 2001-2013 is shown in Chart 1.5. 
In terms of FDI stock, Canada is a net provider  of FDI to the world over the period, while its 
investment position in terms of FDI flows has fluctuated. WT/REG364/1 
 
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  Chart 1.5 Canada: FDI stock and flow with world, 2001-2013 
0100200300400500600700800900
2001 2003 2005 2007 2009 2011 2013Canada FDI stock with world
2001-2013
(US$ Billion) 
Inward Outward
-20020406080100120140
2001 2003 2005 2007 2009 2011 2013Canada FDI flow with world
2001-2013
(US$ Billion) 
Inward Outward
 
Source: UNCTAD and data provided by Canada. 
 
1.11.  Honduras' FDI stock and flow with the world for the period 2001-2013 is shown in 
Chart 1.6. Over the period surveyed, Honduras ha s been a net recipient of FDI in terms of both 
stock and flows. 
Chart 1.6 Honduras: FDI stock and flow with world, 2001-2013 
-2.000.002.004.006.008.0010.0012.00
2001 2003 2005 2007 2009 2011 2013Honduras FDI stock with world
2001-2013
(US$ Billion) 
Inward Outward
-0.200.000.200.400.600.801.001.20
2001 2003 2005 2007 2009 2011 2013Honduras FDI flow with world
2001-2013
(US$ Billion) 
Inward Outward
 
Source: UNCTAD. 
 
1.12.  Honduras' FDI stock and flow with Canada is shown in Chart 1.7.  WT/REG364/1 
 
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  Chart 1.7 Honduras: FDI stock and flow with Canada, 2001-2012 
-0.050.000.050.100.150.200.250.300.350.40
2009 2011Honduras FDI stock with Canada
2009-2011
(US$ Billion) 
Inward Outward
-0.050.000.050.100.150.200.250.300.350.40
2001 2003 2005 2007 2009 2011Honduras FDI flow with Canada
2001-2012
(US$ Billion) 
Inward Outward
 
Source : UNCTAD FDI/TNC database, based on data fro m the Coordinated Direct In vestment Survey (CDIS) 
of IMF. 
 
2  CHARACTERISTIC ELEMENTS OF THE AGREEMENT 
2.1  Background Information 
2.1.  The Agreement was signed on 5 November 2013 and entered into force on 1 October 2014. 
The Parties notified the goods and services aspe cts of the Agreement to the WTO on 5 February 
2015, in document WT/REC364/N/1 - S/C/N/791. The notification was made pursuant to Article XXIV:7(a) of GATT 1994 for goods, and to Article V:7(a) of GATS for services. The text of 
the Agreement, together with its Annexes, is available on the Parties' official websites: 
In English: 
http://www.international.gc.ca/trade-ag reements-accords-commerciaux/agracc/ 
honduras/toc-tdm.aspx?lang=eng 
 In French: 
http://www.international.gc.ca/trade-ag reements-accords-commerciaux/agracc/ 
honduras/toc-tdm.aspx?lang=fra  
2.2.  The Agreement is composed of 23 Chapters. It includes a number of Annexes related to 
specific Chapters of the Agreement and is complemented by the Parties' Tariff Liberalization 
Schedules applicable to trade in goods between them. The Agreement also refers to three main 
Annexes, including the Parties' reservations related to their commitments to liberalize trade in services, and specific disciplines on trade in financial services.  
Box 2.1 Structure of the Agreement 
Preamble  
Chapter 1 Objectives and Initial provisions  
Chapter 2 General Definitions 
Chapter 3 National Treatment and Market Access for Goods 
Chapter 4 Rules of Origin 
Chapter 5 Customs Procedures 
Chapter 6 Trade Facilitation 
Chapter 7 Sanitary and Phytosanitary Measures 
Chapter 8 Technical Barriers to Trade 
Chapter 9 Emergency Action WT/REG364/1 
 
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  Chapter 10 Investment 
Chapter 11 Cross Border Trade in Services 
Chapter 12 Telecommunications 
Chapter 13 Financial Services 
Chapter 14 Temporary Entry for Business Persons 
Chapter 15 Competition Policy, Monopoli es and State Enterprises 
Chapter 16 Electronic Commerce 
Chapter 17 Government Procurement 
Chapter 18 Environment 
Chapter 19 Labour 
Chapter 20 Transparency 
Chapter 21 Institutional Arrangements and Dispute Settlement Procedures 
Chapter 22 Exceptions 
Chapter 23 Final Provisions 
  
Annex I Reservations for Existing Measur es and Liberalization Commitments 
Annex II Reservations for Future Measures  
Annex III Financial Services 
Source: WTO Secretariat based on the Agreement. 
 
3  PROVISIONS ON TRADE IN GOODS 
3.1  Import duties and charges,  and quantitative restrictions 
3.1.1  General provisions 3.1.  The Parties agree to accord national treatmen t to goods of the other Party in accordance with 
Article III of the GATT 1994, which is incorpor ated into and made part of the Agreement 
(Article 3.3). However, national treatment does not apply to measures set out in Annex 3.3 of the 
Agreement.
3  
3.2.  Articles 3.6 through 3.8 contain special disciplines applicable to the temporary admission of 
goods, duty-free entry of certain commercial samples and printed advertising material, and goods 
re-entered after repair or alteration. 
3.3.  The rights and obligations of the Parties in respect of import prohibitions or restrictions are 
governed by Article XI of the GATT 1994, which is incorporated into and made part of the 
Agreement (Article 3.9). The Parties understand that this, inter alia , prohibits import price 
requirements, except as permitted in enforcemen t of countervailing and antidumping orders and 
undertakings. Also, in the event that a Party adopts or maintains a prohibition or restriction on the 
import from a third party of a good, the Agreemen t does not prevent the Party from prohibiting or 
restricting the import from the territory of the othe r Party a good of that third party. Moreover, in 
the event that such a measure is taken, a Party, on request of the other Party, shall discuss with a 
view to avoiding undue interference with or di stortion of pricing, ma rketing and distribution 
arrangements in the other Party. The prohibition on import restrictions does not apply to measures in Annex 3.3 to the Agreement. 
                                               
3 In the case of Canada these include the export of logs, the export of unproc essed fish, imports of the 
prohibited provisions of certain tariff items in HS Chapter 98, excise duties on absolute alcohol, the use of ships 
in the coasting trade of Canada, and the internal sale an d distribution of wine and distilled spirits. Honduras 
may maintain measures on the export of wood from broa dleaved forests, the import  of motor vehicles older 
than 7 years and buses older than 10 years.  For both Parties actions authorized by the Dispute Settlement Body of the WTO are exempt from Articles 3.3 and 3.9 of the Agreement. WT/REG364/1 
 
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  3.4.  A Party may not adopt or maintain any customs fee or other similar charge in connection with 
the import of a good of the other Party that is not commensurate with the cost of services rendered (Article 3.12). 
3.1.2  Liberalization of trade and tariff lines 
3.5.  The Parties may not increase any existing customs duty, or adopt any new customs duty, on 
an originating good. They agree to apply to an originating good, the lesser of the customs duty rate established in the Party's Schedule and the existing rate under Article II of GATT 1994 (WTO 
bound rates). Either Party may: (i) modify a tariff outside the Agreement on a good for which no 
tariff preference is claimed under the Agreement; (ii) raise a customs duty to the level established in its Schedule to Annex 3.4.1 following a unilateral reduction; or (iii) maintain or increase a customs duty as authorized by a dispute settlem ent provision of the WTO Agreement. The Parties 
agreed to discuss, upon the request of a Party, ac celerating the elimination of customs duties set 
out in their respective Schedules or incorporating into them a good that is not subject to elimination (Article 3.4). 
3.1.3  Liberalization schedule 
3.1.3.1  Canada 3.6.  Table 3.1 shows Canada's tariff elimination commitments with respect to Honduras.
4 Before 
the entry into force of the Agreement, 4,743 lines were duty free, representing 66.5% of Canada's 
tariff, and corresponding to 59% of its imports fr om Honduras during 2011-2013. At the entry into 
force of the Agreement, an additional 2,120 line s (29.7% of the tariff) became duty-free for 
imports from Honduras. At the end of the transition period in 2020, 98.4% of Canada's tariff will 
be duty free for imports from Honduras, corresponding to 100% of imports by value. 115 tariff 
lines (corresponding to 1.6% of Cana da's tariff) will remain dutiable.  
Table 3.1 Tariff elimination commitments under the Agreement and corresponding 
average trade 
Duty phase-out 
period Number of 
lines % of total 
lines in 
Canada's 
tariff 
schedule Value of Canada's 
imports from 
Honduras  
(2011-2013) 
US$ million a % of Canada's 
total imports from  
Honduras 
(2011-2013) 
2014 (MFN) 4,743 66.5 125.0 59.0 
2014 2,120 29.7 86.7 40.9 
2015 6 0.1 0.0 0.0 
2016 142 2.0 0.1 0.0 
2017 1 0.0 0.0 0.0 
2020 1 0.0 0.0 0.0 
Remain dutiable 115 1.6 0.0 0.0 
TOTAL 7,128 100.0 211.8 100.0 
a Import coverage is from HS chapters 1-97. 
Note: Tariff lines subject to in-quota rates are excluded in the computation. For the calculation of 
averages, specific rates are excluded and the ad valorem  parts of alternate rates are included. 
 Based on the HS2012 nomenclature. 
Source:  WTO estimates based on data provided by Canada and WTO- IDB. 
 
3.7.  Table 3.2 shows Canada's tariff elimination, by HS section with regard to Honduras. The 
115 lines that remain subject to duties are found in HS Sections I (live animals); III (animal or 
vegetable fats and oils), IV (prepared food) and VI (chemicals), with final average tariffs of between 114% and 229%.  
                                               
4 Canada's applied tariff in 2014 consisted of 7,128 lines at the HS eight-digit level (HS 2012), 96% of 
which were ad valorem;  283 lines were composed of either specific duties (88 lines), compound duties 
(42 lines), mixed duties (153).  WT/REG364/1 
 
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  Table 3.2 Canada: Tariff elimination under the Agreement, by HS Section 
HS 
Section MFN 
Average 
% No. of 
lines Duty-free 
lines under 
the  
MFN 2014 Number of duty-free lines 
under the Agreement 
Remain 
dutiable a Avg. Final 
Tariff  
(Dutiable) 2014 
2015 
2016 
2017 
2020 
I 37.9 408 278 60 1    69 227.7 
II 4.1 467 278 135  54     
III 8.0 68 25 41     2 114.5 
IV 17.1 534 161 292 4 35 1 1 40 228.9 
V 0.4 158 150 8       
VI 1.3 855 716 135     4 138.3 
VII 1.8 269 193 68  8     
VIII 3.1 98 67 31       
IX 2.3 131 73 58       
X 0.0 141 141        
XI 5.2 1,203 630 573       
XII 9.7 100 33 23 1 43     
XIII 2.1 166 108 58       
XIV 1.7 60 45 15       
XV 1.4 666 530 136       
XVI 0.8 1047 905 142       
XVII 5.4 240 103 137       
XVIII 1.7 289 201 88       
XIX 3.8 29 7 22       
XX 4.5 190 92 96  2     
XXI 1.4 9 7 2       
Total 5.7 7,128 4743 2,120 6 142 1 1 115 223.8 
a Amongst the tariff lines subject to TRQs at the MFN level, 72 tariff lines are duty free under the 
agreement and 19 tariff lines are already duty  free at MFN basis for in-quota tariff. 
Note: Tariff lines subject to in-quota rates are excl uded in the computation; for the calculation of 
averages, specific rates are excluded and the ad valorem  parts of alternate rates are included. 
 Based on the HS2012 nomenclature. 
Source:  WTO estimates based on data provided by Canada.  
3.8.  Chart 3.1 shows the average remaining dutiable rates by HS Chapter for Canada's imports 
from Honduras. Under the Agreement, all of Canada's  tariff concessions are in the form of full tariff 
elimination. As such, the MFN tariff rates remain applicable for Canadian tariff lines excluded from 
tariff elimination. Average tariff rates are highest in HS Chapters 18 (cocoa and cocoa 
preparations) at 265% covering 2 lines, HS 22 (beverages, spirits and vinegar) at 256% (1 line), and HS 19 (preparations of cereals) at 254.3% for 6 lines.  WT/REG364/1 
 
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  Chart 3.1 Canada: Average of dutiable ra tes on excluded lines, by HS Chapter  
050100150200250300
01 02 04 15 16 17* 18 19 21 22 23 35Average Duty Rate
HS ChapterPreferential MFN
 
* Specific duties only. 
Note:  For the calculation of averages, specific rates are excluded and the ad valorem  parts of alternate 
rates are included. 
 Based on the HS 2012 nomenclature. 
Source: WTO estimates based on data provided by Canada.  
3.1.3.2  Honduras 
3.9.  Table 3.3 shows Honduras' tariff elimination commitments with respect to Canada.5 Before 
the entry into force of the Agreement, 3,333 lines were duty free, representing 48% of Honduras' 
tariff, and corresponding to 81.8% of its imports from Canada during 2011-2013. At the entry into force of the Agreement, an additional 1,482 line s (21.3% of the tariff) became duty-free for 
imports from Canada. After ten years of implemen tation in 2024, 2,898 lines that are dutiable on 
an MFN basis (41.8% of the tariff) would have been liberalized by Honduras. At the end of the 
transition period in 2028, 97.8% of Honduras' tariff will become duty free for imports from Canada, corresponding to 99.8% of imports by value. 153 tariff lines (corresponding to 2.2% of 
Honduras' tariff) will remain dutiable.  
Table 3.3 Honduras: 
Tariff elimination commitments under the Ag reement and corresponding average trade
 
Duty phase-out 
period Number of 
lines % of total 
lines in 
Honduras' 
tariff schedule Value of Honduras' 
imports from 
Canada  
(2011-2013) 
US$ million % of Honduras' 
total imports from  
Canada 
(2011-2013) 
2014 (MFN) 3,333 48.0 28.3 81.8 
2014 1,482 21.3 1.3 3.9 
2018 535 7.7 1.0 2.8 
2023 881 12.7 1.9 5.6 
2025 1 0.0 0.0 0.0 
2028 559 8.1 1.9 5.6 
Remain dutiable 153 2.2 0.1 0.2 
TOTAL 6,944 100.0 34.6 100.0 
Note: Tariff lines subject to in-quota ra tes are excluded in the computation. 
 Based on the HS 2012 nomenclature.  
Source:  WTO estimates based on data provided by Honduras. 
                                               
5 Honduras' applied tariff in 2014 consisted of 6,944 lines at the HS eight-digit level (HS 2012), all of 
which were ad valorem.   WT/REG364/1 
 
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  3.10.  Table 3.4 shows Honduras' tariff elimination, by HS section with regard to Canada. The 
153 lines that remain subject to duties are found in sections I (live animals); II (vegetable products), and IV (prepared food), with fi nal average tariffs of between 19% and 26.5%. 
Table 3.4 Honduras: Tariff elimination under the Agreement, by HS Section  
HS 
Section MFN 
Average 
% No. of 
lines Duty-free 
lines 
under the  
MFN 2014 Number of duty-free lines under 
the Agreement Remain 
dutiable Avg. Final 
Tariff  
(Dutiable)  2014 2018  2023  2025  2028 
I 13.8 449 45 205 70 21  24 84 26.5 
II 9.1 419 149 65 100 76  13 16 23.4 
III 8.2 57 11 13 3 5  25   IV 12.4 293 36 50 44 58 1 51 53 19.0 
V 2.6 187 119 6 31 23  8   VI 1.7 1,113 908 43 34 79  49   VII 4.3 335 153 28 53 78  23   VIII 8.3 108 19 12 29 43  5   IX 8.5 139 28 12 4 20  75   X 5.1 292 149 1 1 18  123   XI 9.6 918 116 802       XII 12.8 64 3 9 18   34   XIII 6.3 175 80  55 37  3   XIV 6.9 54 15 1  38     XV 3.1 697 468 13 42 66  108   XVI 2.0 977 804 48 18 100  7   XVII 6.0 234 52 65 1 116     XVIII 3.8 234 150 51 31 2     XIX 15.0 21  21       XX 10.7 169 28 37 1 92  11   XXI 7.8 9    9     Totals 5.9 6,944 3,333 1,482  535 881 1 559 153a 23.6 
a 153 tariff lines are under the Excluded category (Category E) and reflect MFN 2014 duties. This 
process is in accordance with th e methodology applied by the Secretariat across all FPs where it 
aims to assess the margins of pr eference in reference to the MFN duties as of entry into force. 
Note: Tariff lines subject to in-quota ra tes are excluded in the computation.  
 Based on the HS 2012 nomenclature 
Source:  WTO estimates based on data provided by Honduras. 
3.11.  Chart 3.2 shows the average remaining dutiable rates by HS Chapter for Honduras' imports 
from Canada. Under the Agreement, all of Honduras' tariff concessions are in the form of full tariff 
elimination. As such, the MFN tariff rates remain applicable for Honduras tariff lines excluded from 
tariff elimination. The highest average tariffs are found in Chapters 19 (preparations of cereals), 21 (miscellaneous edible preparations) at 35% for 1 line each, HS 2 (meat and edible meat offal) 
at 32.1% for 43 lines and 10 (cereals) at 31.7% for 9 lines. WT/REG364/1 
 
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  Chart 3.2 Honduras: Average of dutiable rates of excluded lines, by HS Chapter 
0510152025303540
01 02 04 10 11 16 17 19 21 22 23 24Average Duty Rate
HS ChapterPreferential MFN
 
Note: 
 All the remaining dutiable lines are those excluded from the agreement (Category E) and the 
preferential duties expressed are the MFN rates in 2014. 
 Based on the HS 2012 nomenclature 
Source: WTO estimates based on data provided by Honduras 
 
3.1.4  Tariff rate quotas 
3.12.  The Parties agree to implement and administer  their TRQs in accordance with Article XIII of 
the GATT 1994 and the Agreement on Import Licensing Procedures. They shall ensure inter alia  
that their procedures for administering TRQs are transparent, publicly available, timely, non-
discriminatory, responsive to market conditions, and are designed to minimize any burden on 
trade (Article 3.16). The Parties shall make every effort to administer its TRQs in a manner that allows importers to fully utilize them. No Party may impose a condition on the application for or 
use of an in-quota quantity allocation under a TRQ on the re-export of an agricultural good. A 
Party may not count food aid or other non-commercial shipments in determining whether an in-quota quantity under a TRQ has been filled. Details of the TRQs established under the 
Agreement are set out in Annex Table A2.1 of this document. Honduras maintains TRQs on beef, 
pork and sugar. Canada maintains TRQs on sugar. 
3.2  Rules of origin 3.13.  Disciplines regarding rules of origin are set out in Chapter 4 of the Agreement.
6 Annex 4.1 
to the Agreement contains the specific rules of origin applicable for the administration of the 
Agreement. 
3.14.  According to Article 4.2, a good is considered as originating when: 
a. it is wholly obtained or produced entirely in the territory of one or both of the Parties; 
b. each of the non-originating materials used in the production of the good undergoes an 
applicable change in tariff classification (CTC) as set out in Annex 4.1 when the good is 
produced entirely in the territory of one or both of the Parties; 
c. it is produced entirely in the territory of one or both of the Parties exclusively from 
originating materials; or 
                                               
6 Article 4.1 defines the terms used in Chapter 4. WT/REG364/1 
 
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  d. except for a good of HS Chapter 39 or Chapters 50-63,7 the good is produced entirely in 
the territory of one or both of the Parties; a non-originating material used in the production of the good cannot undergo a change in tariff classification because both the good and the non-originating material are classified in the same subheading or heading 
that is not further subdivided into subheadings; the regional value content (RVC) of the 
good is not lower than 35% when the transa ction value method is used, or 25% when 
the net cost method is used, and the good satisfies the other applicable requirements of 
the rules of origin chapter. 
3.15.  Product specific rules of origin are contained in Annex 4.1. For most HS Chapters covering 
agricultural products (1-24), the products are considered originating if their transformation 
involves a change in tariff classification (CTC). In the case of industrial products, a CTC is the 
norm, in some cases combined with an additional RVC requirement (usually in a range of 
30-50%). For a small number of industrial products  (e.g. mineral products or metal wires), certain 
production processes may confer originating status. 
3.16.  Provisions related to the calculation of Regi onal Value Content are outlined in Article 4.3.  
3.17.  Accumulation is provided for in Article 4.4 and states inter alia  that where each Party has a 
trade agreement that establishes or leads to th e establishment of a free trade area or customs 
union with the same non-party, as permitted by WTO rules, the territory of that non-party is 
deemed to form part of the territory of the free trade area established by the Agreement, for the 
purpose of determining whether a good is an originating good under the Agreement. This provision only takes effect following agreement by the Parties on whether the provision's application needs 
to be limited to specified goods or under specific conditions. 
3.18.  Additional disciplines in Articles 4.5 to 4.14 cover the following aspects: de minimis  level 
under which non originating materials not complying with rules conferring origin may still be 
determined as originating for the purposes of the Agreement;
 8 fungible goods and materials; sets 
or assortments of goods; accessories, spare parts and tools; indirect materials; packaging materials and containers for retail sale and shipment; transhipment; interpretation and 
application; and discussions and modifications.  
3.2.1  Customs-related procedures 3.19.  Chapter 5 covers customs procedures and contains disciplines related to certification of 
origin, administration and enforcement of the rules of origin, advance rulings, review and appeal of 
advance rulings and origin determinations, uniform regulations, and co-operation.  
3.3  Export duties and charges,  and quantitative restrictions 
3.20.  The rights and obligations of the Parties in respect of export prohibitions or restrictions 
applicable on a sale for export of a good destined for the territory of the other Party are governed 
by Article XI of the GATT 1994, which is incorporated into and made part of the Agreement (Article 3.9). The Parties understand that this, inter alia , prohibits an export price requirement in a 
circumstance in which another form of restriction is prohibited. Also, in the event that a Party 
adopts or maintains a prohibition or restriction on the export to a third party of a good, the Agreement does not prevent the Party from requirin g, as a condition of export of a good of the 
Party to the territory of the other Party, that the good not be re-exported to the third party, 
directly or indirectly, without being consumed in the territory of the other Party. The prohibition on 
export restrictions does not apply to measures specifically identified in Annex 3.3 to the Agreement (see footnote no. 3). 
3.21.  A Party may not adopt or maintain a duty, tax or other charge on the export of a good to 
the territory of the other Party unless the duty, tax or charge is adopted or maintained on the good when destined for domestic consumption (Article 3.11). 
                                               
7 Except as provided in Annex 4.1. 
8 The de minimis  level is set at 10% of the transaction value of the good. It however does not apply for 
agricultural products (HS Chapters 1 to 24) unless the non-originating material is provided for in a different 
subheading from the good for which origin is being determined. The de minimis  threshold related to textiles 
and apparel (HS Chapters 50-63) is based on tota l weight of yarn, rather than value criteria. WT/REG364/1 
 
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  3.4  Regulatory provisions on trade in goods 
3.4.1  Standards 3.4.1.1  Sanitary and phytosanitary measures 3.22.  In Chapter 7 the Parties affirm their existing rights and obligations with respect to each 
other under the SPS Agreement. Additionally, th ey agree that the WTO Agreement exclusively 
governs the settlement of any formal disputes over SPS matters.  
3.4.1.2  Technical barriers to trade 
3.23.  In Chapter 8 the Parties affirm their existing rights and obligations with respect to each 
other under the TBT Agreement. Additionally, th ey agree that the WTO Agreement exclusively 
governs the settlement of any formal disputes ov er TBT matters. The Parties agree to engage in 
technical cooperation activities directed at reaching effective and full compliance with the 
obligations of the TBT Agreement while taking into account their different levels of development. 
3.4.2  Safeguard mechanisms 3.4.2.1  Global safeguards 
3.24.  The Parties retain their rights and obli gations under Article XIX of the GATT 1994 and the 
Agreement on Safeguards (Article 9.2). 
3.4.2.2  Bilateral safeguards 
3.25.  During the transition period only,
9 a Party may adopt an emergency action if, as a result of 
the reduction or elimination of a duty, an originating good is being imported into the Party's territory in such increased quantities and under such conditions as to constitute a substantial cause of serious injury or threat of serious injury to a domestic industry. The emergency action 
may consist of a suspension of the further reduction of a rate of duty provided for under the 
Agreement; or an increase in the rate of duty on the good to a level not exceeding the lesser of 
the MFN applied duty in effect at the time the emergency action is taken, and the MFN applied rate 
in effect on the day immediately preceding the Agreement's entry into force.
10 
3.26.  An emergency action shall be adopted no later than one year after the date the proceeding 
is instituted. A Party may not maintain an emergency action for a period exceeding three years, or 
beyond the expiration of the transition period, unless the other Party consents. During the 
transition period, a Party may not apply an emergency action to the same good more than twice. A Party applying an emergency action shall provide the other Party with mutually accepted trade liberalizing compensation in the form of concessions with substantially equivalent trade effects or 
with a value equivalent to the value of the addition al duties expected to result from the action. If 
the Parties are unable to agree on compensation, the Party against whose good the action is taken may take tariff action with trade effects substantially equivalent to the emergency action taken. 
3.27.  Annex 9.4 addresses the administration of emergency action proceedings including 
institution of a proceeding; contents of a petition or complaint; notification requirement; public hearing; confidential information; evidence of injury and causation; and deliberation and report. 
3.4.2.3  Balance of payments safeguards 
3.28.  Provisions on balance of payments applicable to both goods and services are discussed in 
Section 5.4 of this Report. 
                                               
9 The transition period means the 8 year period from the Agreement's entry into force, unless, in the 
case of Honduras, the tariff elimination period for the good  occurs over a longer period of time, in which case 
the transition period is the peri od of the staged tariff eliminatio n for that good plus two years. 
10 In the case of a duty applied to a good on a season al basis, a Party may increase the rate of duty to a 
level not exceeding the MFN applied rate in effect on the good for the corresponding season immediately preceding the date of entry into force of the Agreement. WT/REG364/1 
 
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  3.4.2.4  Special safeguards 
3.4.2.4.1  Agricultural Safeguard Mechanism 3.29.  Honduras may apply an agricultural safeguard measure in the form of an additional customs 
duty on the originating agricultural goods listed in Annex 3.15 (pork, other dairy products, onions 
and vegetable oil)
11 if the volume of imports into Honduras during a calendar year exceeds the 
quantity set out in Annex 3.15 (Article 3.15). The customs duty including the agricultural 
safeguard measure for a good shall not exceed the lesser of the applied MFN duty at the time the 
measure is adopted, or applied on the day im mediately preceding the Agreement's entry into 
force. Honduras may maintain an agricultural safeguard measure until the end of the calendar year in which it was imposed. Honduras may not impose an agricultural safeguard measure on an originating agricultural good in connection with the same good: if the good is subject to a TRQ and 
the agricultural safeguard measure increases an in-quota duty; after the expiration of the tariff 
elimination period for that good as set out in Hond uras' schedule; or at the same time as Honduras 
applies an emergency action or safeguard under GATT Article XIX and the Agreement on 
Safeguards to the same good. Agricultural safeguard measures are not subject to compensation. 
Honduras shall inform Canada in writing within 30 days of the application of an agricultural safeguard measure and shall provide all relevant data. 
3.4.2.4.2  Bilateral emergency acti on on textile and apparel goods 
3.30.  Annex 3.1 of the Agreement applies to textile and apparel goods in HS Chapters 50 through 
63 and HS subheading 940490. If as a result of the reduction or elimination of a duty under the 
Agreement, a textile or apparel good benefiting fr om preferential treatment is being imported into 
a Party's territory in such increased quantities, in absolute terms or relative to the domestic 
market for that good, and under such conditions as to cause serious damage or actual threat of thereof to a domestic industry producing a like or directly competitive good, a Party may adopt an 
emergency measure. The measure consists of the suspension of the further reduction of a duty 
rate, or the increase of the duty rate to a level not exceeding the lesser of the MFN applied rate of 
duty in effect at the time the action is taken and the day immediately preceding the Agreement's 
entry into force.  
3.31.  In determining serious damage, or actual th reat thereof, the Party shall examine the effect 
of increased imports on the particular industry, including relevant economic variables such as output, productivity, utilization of capacity, inventories, market share, exports, wages, 
employment, domestic prices, profits, and investment, and may not consider changes in 
technology or consumer preference as factors supporting a determination of serious damage or actual threat thereof. An emergency action may only be applied after an investigation by the 
competent investigating authority. A measure may not be imposed for a period exceeding three 
years, unless the other Party gives consent, or beyond the expiration of the textile and apparel transition period. The transition period is the five year period beginning on the date of entry into 
force of the Agreement. 
3.32.  An action may not be applied to the same good more than once. Compensation in the form 
of substantially equivalent trade effects or equivalent value to the value of additional duties expected to result from the action is to be offered to the other Party. If the Parties are unable to 
agree on compensation, retaliation is permitted. 
3.4.3  Anti-dumping and countervailing measures 3.33.  The WTO Agreement exclusively governs the rights and obligations of the Parties regarding 
the application of antidumping and countervailing measures, including the settlement of any 
disputes about this matter (Article 1.3). 
                                               
11 A total of 17 products at the HS 8-digit level. WT/REG364/1 
 
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  3.4.4  Subsidies and State-aid 
3.34.  The Parties agree that in their reciprocal trade they shall maintain their rights and 
obligations according to the Agreement on Subsidies and Countervailing Measures  of the WTO 
Agreement (Article 3.5). 
3.35.  In relation to agricultural export subsidies, the Parties share the objective of the multilateral 
elimination of agricultural export subsidies and commit to work together toward an agreement in the WTO to eliminate such subsidies and avoid their reintroduction in any form. The Parties shall 
eliminate, as of the date of entry into force of  the Agreement, any form of agricultural export 
subsidies in their bilateral trade and shall not reintroduce them in any form (Article 3.13).  
3.36.  On domestic support measures for agricult ural products, the Parties agree to cooperate in 
the WTO agricultural negotiations to achieve a substantial reduction of production and 
trade-distorting support measures. They also agree to consult, at the request of a Party, if the 
other Party adopts or maintains a domestic support measure that the Party considers to be distortive of bilateral trade covered by the Agreement (Article 3.14). 
3.4.5  Trade Facilitation 
3.37.  Chapter 6 covers trade facilitation. The Parties affirm their rights and obligations under 
Articles VIII (Fees and Formalities connected with importation and exportation) and X (Publication 
and Administration of Trade Regulations) of GATT 1994 (Article 6.2). They also commit to the 
prompt release of unrestricted or uncontrolled good s, while recognizing the need for submission of 
more extensive documentation in certain cases. Each Party shall facilitate and simplify its procedures for the release of low-risk goods and shall concentrate its customs controls on the 
release of high-risk goods. The clearance of expr ess consignments shall be based, to the extent 
possible, on the World Customs Organization's Guidelines for the Immediate Release of 
Consignments by Customs . The Parties shall endeavour to achieve common procedures and to 
simplify the information necessary for the release of goods, applying, when appropriate, existing 
international standards. Upon written request, a Party shall issue a written ruling prior to importation pertaining to tariff classification; the applicable rate of customs duty or any other tax 
applicable upon importation; or whether a good is originating and is entitled to preferential tariff 
treatment. Such rulings are binding at the time of importation, but may later be modified or revoked without retroactive effect. In modifying or revoking a ruling that was based on inaccurate 
or false information, a Party may collect any uncollected duties, taxes, or other charges in 
accordance with domestic law. The Parties agree to ensure that administrative actions or official 
decisions in respect of the import or export of a good are reviewable upon request from a trader by an independent judicial, arbitral, administrati ve tribunal or administrative procedure with the 
authority to maintain, modify, or reverse the administrative action or official decision in 
accordance with the domestic law of the Party. 
3.38.  The Parties agree to develop a technical cooperation programme on customs-related 
matters on the basis of mutually decided terms relating to issues such as the scope, timing and 
cost of cooperative measures (Article 6.3). Moreover, with the objective of developing further steps to facilitate trade under the Agreement, the Parties have established a work programme (Article 6.4). 
3.39.  The Parties shall apply when applicable their country of origin marking rules to the good of 
the other Party in accordance with Article IX of the GATT 1994 which is incorporated into and made part of the Agreement (Article 3.17). The Parties shall accord to goods of the other Party, 
treatment no less favourable than that which it accords to the goods of a non-Party country with 
respect to the application of its country of origin marking rules in accordance with GATT Article IX. Origin marking may be indicated in English, French or Spanish, but a Party may require that an 
imported good be marked with its country of origin in the same manner as a good of that Party. 
The WTO Customs Valuation Agreement governs the customs valuation rules applied by the Parties in their reciprocal trade.
12  
                                               
12 A Party may not make use of the options and reservations permitted under Article 20 and 
paragraphs 2, 3 and 4 of Annex III of the Customs Valuation Agreement in their reciprocal trade. WT/REG364/1 
 
- 20 - 
 
  3.5  Sector-specific provisions on trade in goods 
3.5.1   Distilled Spirits 3.40.  A Party may not adopt or maintain measures requiring that distilled spirits imported from 
the territory of the other Party for bottling be blended with distilled spirits of the Party 
(Article 3.10). 
3.5.2  Sugar 3.41.  Duties on originating goods of sugar (1701.9100 and 1701.9900) from Canada are exempt 
from tariff elimination in Honduras' schedule. Nevertheless, provided that Canada meets the "net 
exporter" condition, certain aggregate quantities shall be free of customs duty in a given year (details are in Annex Table A2.2). The "net exporter" condition is considered to have been met if during the previous three years, the average Cana dian production of refined beet sugar exceeds 
the average consumption of Canadian refined beet sugar over the same period. In order to export 
under such conditions, Canada shall provide Honduras with official statistics to demonstrate compliance. 
3.42.  In the case of Canada, 13 eight-digit tariff lines in Chapter 17 are exempt from tariff 
liberalization. Canada provides duty-free access for originating products of Honduras up to the specified quantities (details are in Annex Table A2.3). 
3.5.3   Textiles and apparel 
3.43.  Section 4 of Annex 3.1 outlines conditions applying to short supply of yarn and fabric. The 
Parties shall implement a short-supply allowance (i.e. considering a yarn or fabric from non-Parties as originating) following a request from the other Party, based on information it considers 
necessary, if it determines that the yarn or fabric is not available in commercial quantities in a 
timely manner in the territory of either Party. A short-supply determination is to be made within 45 days of receiving the request. 
3.44.  In the case of apparel, the Parties shall apply the rate of duty applicable to originating 
goods set out in their schedules up to an annual quantity of 4 million square metres equivalent (SME) to apparel goods in HS Chapters 61 and 62 that are both cut (or knit to shape) and sewn or 
otherwise assembled in the territory of a Party from fabric or yarn produced or obtained outside 
the Parties' territories, and that meet other applic able conditions for preferential treatment under 
the Agreement. 
3.45.  For fabric and made-up goods, the Parties shall apply the rate of duty applicable to 
originating goods set out in their schedules up to an annual quantity of one million SME to goods in 
HS Chapters 51 through 55, 58, 60 and 63 that are woven or knit in a Party from yarn produced or obtained outside the Parties' territories or knit in a Party from yarn spun in a Party from fibre or 
filaments produced or obtained outside the Parties' territories or goods of HS subheading 940490 
that are finished and cut and sewn or otherwise assembled in the territory of a Party from fabric or yarn produced or obtained outside the territory of the Parties. 
3.46.  SME quantities are determined in accordance with conversion factors (at the HS six-digit 
level) in Schedule 1 to Annex 3.1. Textile or apparel goods that enter the territory of a Party under SMEs are not considered as originating goods. Before  such a good benefits from preferential tariff 
treatment, the Parties must establish that the documentation or certification requirements for the 
import of the goods for which the preferential tariff treatment may be claimed and notify each 
other in writing of the way eligibility of the good s for that preferential tariff treatment will be 
verified by the exporting Party. WT/REG364/1 
 
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  4  PROVISIONS ON TRADE IN SERVICES 
4.1  Scope and definitions 4.1.  Rules governing cross-border trade in services
13 are found in Chapter 11. Specific disciplines 
on telecommunications are contained in Chapter 12. Chapter 13 contains rules applicable to 
financial services. The Agreement addresses presen ce vs. right of entry of services suppliers 
separately, i.e. Chapter 11 relates to the treatment of a services supplier present in the territory of 
a Party, while Chapter 14 relates to the temporary entry for covered categories of business 
persons. Investment, encompassing GATS mode 3 bu t not limited to services-related investments, 
is dealt with in Chapter 10. Chapter 10 does not apply to financial services, as defined in Chapter 13. 
4.2.  Chapter 11 applies to measures adopted or maintained by a Party affecting cross-border 
trade in services by a service provider of the other Party, including a measure that affects 
producing, distributing, marketing, selling or deliver ing a service; purchasing, using or paying for a 
service; accessing and using a distribution and transportation system in connection with providing 
a service; the presence in its territory of a servic e provider of the other Party; and requirement of 
a bond or other form of financial security as a condition for providing a service. Chapter 11 does not impose an obligation on a Party with respect to a national of the other Party seeking access to 
its employment market, or employed on a permanen t basis in its territory, or confer any right on 
that national with respect to that access or employment. Chapter 11 does not apply to financial services, as defined in Chapter 13; an air service or  related service in support of air services, other 
than: an aircraft repair and maintenance service,  the selling and marketing of an air transport 
service, or a computer reservation system; proc urement by a Party or a state enterprise; or a 
subsidy or grant provided by a Party or a state enterprise, including a government-supported loan, 
guarantee or insurance. 
4.3.  The Agreement's provisions on nation al treatment, MFN treatment, performance 
requirements and senior management and boards of directors do not apply to existing non-conforming measures, the continuation, prompt renewal of or the amendment to non-conforming 
measures, to the extent that the amendment does not decrease the conformity of the measures, 
as existed immediately before the amendment and as listed in each Party's Schedule to Annex I of the Agreement. Moreover, these provisions do not apply to a measure that a Party adopts or maintains with respect to sectors, subsectors or activities, as set out in its Schedule to Annex II of 
the Agreement. 
4.2  Denial of benefits 4.4.  Under Article 11.10, a Party may deny the benefits of Chapter 11 to a service provider of the 
other Party if the service provider is an enterprise owned or controlled by nationals of a non-party, 
and the denying Party adopts or maintains a measure with respect to the non-Party that prohibits transactions with the enterprise or that would be violated or circumvented if the benefits of 
Chapter 11 were accorded to th e enterprise. A Party may also de ny the benefits to a service 
provider that has no substantial business activities in the territory of the other Party. 
4.3  General provisions on trade in services and investment 4.3.1  Market access 
4.5.  A Party may not adopt or maintain a measure that imposes limitations on the number of 
service providers, the total value of service tran sactions or assets, the total number of service 
operations or the total quantity of service output, or the total number of natural persons that may 
be employed in a particular service sector. Additionally, a Party may not adopt or maintain a 
                                               
13 The term "cross-border trade in services" means providing a service: (i) from the territory of one 
Party into the territory of the other Part y; (ii) in the territory of one Party by  a person of that Party to a person 
of the other Party; or (iii) by a national of a Party in  the territory of the other Pa rty. "Cross-border trade in 
services" does not include the provisio n of a service in the territory of a Party by a covered investment; the 
term "covered investment" means, with respect to a Party, an investment in its territory of an investor of the 
other Party existing on the date of entry into force of the Agreement, or investments made or acquired thereafter. WT/REG364/1 
 
- 22 - 
 
  measure that restricts or requires a specific type of legal entity or joint venture through which a 
service provider may provide a service (Article 11.6). 
4.6.  The Parties' reservations on non-confor ming measures related to market access are 
contained in Annexes I and II of the Agreement. 
4.3.2  National and MFN treatment 
4.7.  The Parties accord to service providers of the other Party treatment no less favourable than 
that they accord, in like circumstances, to their own service providers (Article 11.3). Additionally, 
the Parties accord to service providers of the other Party treatment no less favourable than that 
they accord, in like circumstances, to service providers of a non-party (Article 11.4). 
4.8.  Under Chapter 10 (on investment), national and MFN treatment are applicable to the Parties' 
investors and investments with respect to the establishment, acquisition, expansion, management, 
conduct, operation and sale or other disposition of an investment in a Party's territory 
(Articles 10.4 and 10.5).  
4.3.3  Local presence 
4.9.  The Parties may not require as a condition for the cross-border provision of a service that a 
service provider of the other Party establish or main tain a representative office or an enterprise in 
its territory, or be resident, in its territory (Article 11.5). 
4.10.  Each Party shall accord to a covered investment treatment in accordance with the 
customary international law minimum standard of treatment of aliens, including fair and equitable treatment and full protection and security (Article 10.6). 
4.3.4  Investment 
4.11.  The disciplines of Chapter 10 relating to national treatment, MFN, and senior management 
and boards of directors do not apply either to procurement by a Party of a state enterprise; or a subsidy or grant provided by a Party or a state enterprise, including a government-supported loan, 
guarantee or insurance. Some of the disciplines on performance requirements do not apply to a 
qualification requirement for a good or service with respect to export promotion and foreign aid programs; procurement by a Party or a state enterprise; and to a requirement imposed by an 
importing Party relating to the content of a good necessary to qualify for a preferential tariff or 
preferential quota (Article 10.9). 
4.12.  Chapter 10 also contains specific disciplines on transfers; expropriation;
14 compensation for 
losses; special formalities and information requirements; denial of benefits; health, safety and 
environmental measures; corporate social responsibility; and subrogation.  
4.3.5  Movement of natural persons 4.13.  In Chapter 14 the Parties recognize the importance of temporary entry for business persons 
to support international trade in goods, services, and investment. They agree to grant temporary 
entry of nationals who are intra-company transferees (managers, executives, specialists) and business visitors;
15 nationals providing after-sales service16 directly related to the export of a good 
by an exporter of the same Party into the territo ry of the other Party; or spouses or common-law 
partners and children of nationals who are intra-company transferees. The Parties agree that within three years of the Agreement's entry into force, they will review developments related to 
temporary entry and consider the need for further disciplines in this area, including the removal of 
labour market tests, and procedures of similar effect, and numerical quotas where appropriate. 
They also agree to deal with implementation and administration issues through bilateral 
                                               
14 The Parties' understanding on rules on expropriation is contained in Annex 10.11. 
15 Nationals include citizens and permanent residents. 
16 As defined in Article 14.1. WT/REG364/1 
 
- 23 - 
 
  discussions. Within one year of the Agreement's en try into force, the Parties shall make available 
explanatory material regarding the requirements for temporary entry.17 
4.3.6  Performance Requirements 4.14.  Disciplines on performance requirements are contained in Chapter 10 relating to 
investment. A Party may not impose or enforce a number of requirements contained and qualified 
in Article 10.7, or enforce a commitment or undertaking, in connection with the establishment, acquisition, expansion, management, conduct or operation of an investment of an investor of a 
Party or a non-Party in its territory. 
4.3.7  Senior Managers and Board of Directors 4.15.  According to Chapter 10, a Party may not requ ire that an enterprise of that Party that is a 
covered investment appoint individuals of a particul ar nationality to senior management positions. 
A Party may, however, require that a majority of the board of directors, or a committee thereof, of 
an enterprise of that Party that is a covered investment be of a particular nationality or resident in the territory of the Party, provided that the requ irement does not materially impair the ability of 
the investor to exercise control over its investment (Article 10.8). 
4.4  Liberalization commitments 4.16.   Liberalization modalities for Chapters 10 (investment), 11 (cross-border trade in services) 
and 13 (financial services) follow a "negative list" approach to scheduling commitments. This 
approach assumes that all sectors or sub-sectors covered by these chapters conform to the relevant obligations, unless otherwise provided for in  the Parties' lists of non-conforming measures 
in Annexes I, II and Annex III. Article 11.7 provides  for the possibility to maintain existing non-
conforming measures listed in Annex I to the Agreement, and to amend these measures provided 
that the amendment does not decrease the confor mity of the measure as it existed immediately 
before the amendment. Article 11.7 also provides for the possibility to adopt or maintain non-
conforming measures set out in Annex II. Moreover, with respect to cross-border trade and 
investment, existing non-conforming measures maintained by a Party at the sub-national Government level are "grandfathered", rather than explicitly listed (as in the GATS). This is 
important to keep in mind in the case of Canada  that has, under its GATS commitments, listed a 
number of reservations related to measures taken at the provincial or territorial level.
18 
4.17.  The sub-sections below present the Parties' liberalization commitments under the 
Agreement as compared to their GATS commitmen ts. Tables 4.1 and 4.2 summarize the specific 
commitments made by the Parties under the Agreement, by sectors and subsectors, and compare 
them with their GATS Schedules. The Tables also indicate in which sector or subsector the Parties 
have made reservations. Improvements in existi ng GATS commitments are either a reduction in 
the limitations applicable to national treatment, additional sub-sectors in which commitments are 
made, and/or new commitments. It should be noted that horizontal limitations in the GATS Schedules of Specific Commitments and reservations covering all sectors in Annex I and II of the 
Agreement, as well as MFN reservations or exemptions, are not included in the Tables. Mode 4 
commitments are also excluded. The summaries of  MFN and horizontal limitations in the text 
complement the summary Tables.  
4.4.1  Canada 
4.18.  In its GATS schedule, Canada has made commitments in 105 out of 155 services sectors
19. 
In one of its reservations related to future no n-conforming measures (Annex II), Canada reserves 
the right to adopt or maintain a measure relating to social services. The reservation covers public 
                                               
17 Canada has made available information on the re quirements for temporary entry on the Department 
of Immigration, Refugees and Citize nship website (http://www.ci c.gc.ca). Information is also available on the 
website of the Honduran Instituto Nacional de Migraciones (http://inm.gob.hn). 
18 Canada notes that as a result of the scheduling approach in the agreement, it is difficult to identify 
the liberalization that has taken place at the sub-nati onal level since the GATS entered into force in 1995 
(i.e. whether certain non-conforming measures are still in  place).  That said, any li beralization with respect to 
sub-national measures which has occurred over the ye ars has effectively been bo und in this agreement. 
19 Source: WTO country profile, 2014. WT/REG364/1 
 
- 24 - 
 
  law enforcement and correctional services, as well as certain services to the extent that they are 
social services established or maintained for a public purpose. The listed sectors cover income security or insurance, social security or insurance,  social welfare, public education, public training, 
health and child care.  
4.19.  Canada's GATS MFN exemptions cover a measure, applicable in all sectors, aimed at 
promoting and protecting foreign investment, through acceptance of compulsory arbitration of investor / state investment disputes brought by or in respect of service suppliers of countries with 
which Canada may have agreements providing for such a procedure. Additional exceptions are 
registered for measures related to film, video and TV programming co-production and distribution, fishing-related services, a number of activities related to insurance and financial services, air and maritime transport, and the temporary entry of natural persons supplying services incidental to 
agriculture. Under the Agreement, Canada regist ers three MFN reservations for current measures 
covering investment in uranium mines, and cros s-border trade in auditing services and water 
transportation. Under reservations for future measures, Canada lists nine MFN exemptions 
covering Aboriginal affairs, fisheries, minority af fairs, social services, air and water transportation, 
and all sectors.
20  
4.20.  Under the GATS, Canada's horizontal limitations cover mainly national treatment for certain 
measures relating to the provision of services through modes 1 and 2 (reservations for tax 
measures and national preferences for service suppliers in certain provinces). In relation to commercial presence (mode 3), Canada's GATS horizontal limitations cover the acquisition of control of a Canadian business by a non-Canadian; subsidies related to research and development; 
federal and sub-central tax measures, including certain tax exemptions; national treatment 
limitations in subsectors such as insurance, social welfare, public education, training, health, and child care; preferential treatment for Aboriginal persons or organisations; restrictions on acquiring 
land; as well as nationality and/or residence requirements for some senior directors and boards of 
directors.  
4.21.  Under the Agreement, while some of the above-mentioned MFN reservations are horizontal 
and apply to all sectors (such as those for Aboriginal affairs and the reservation for existing or 
future bilateral or multilateral agreements concluded in certain sectors), Canada also maintains horizontal limitations, with respect to investment and/or cross-border trade, related to, inter alia , 
the acquisition of Canadian businesses; disposal of equity interests in a government entity; 
constraints on the issue, transfer and ownership of  shares in a federally incorporated corporation; 
residency requirements with respect to senior management and boards of directors; real estate in certain areas; limitations on the voting shares of non-residents in Canadian corporations; and a 
local presence requirement for the issuance of ex port and import permits. Under Annex II and in 
relation to the market access obligation, Canada reserves the right, inter alia , to adopt or maintain 
a measure that is not inconsistent with its obligations under Article XVI of the GATS. 
4.4.1.1  Canada's sector-specific commitments on trade in services 
4.22.  Table 4.1 identifies the main differences, by sector, between Canada's GATS schedule and 
its sector-specific commitments under the Agreement.
21 I t  s h o u l d  b e  r e a d  i n  c o n j u n c t i o n  w i t h  
Canada's lists of non-conforming measures contai ned in Annexes I, II and III of the Agreement.  
                                               
20 Canada reserves the right to adopt or maintain  a measure that accords differential treatment to 
countries under a bilateral or multilateral international agreement in force or signed prior to the Agreement's 
entry into force. Canada also rese rves the right to adopt or maintain  a measure that accords differential 
treatment to a country pursuant to an existing or future bilateral or multilateral agreement relating to aviation, 
fisheries, or maritime matters, including salvage. 
21 It should be noted that only federal level commitments are compared in the Table. WT/REG364/1 
 
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  Table 4.1 Canada: comparison between the GATS and Agreement specific commitments 
in trade in services (feder al level commitments only)  
Sectors (CPC Classification) GATS FTA 
Sectoral 
Commitments Compared 
to the GATS  Existing  
non-conforming 
measure(s) Reservation(s) 
for future 
measures 
  Invest-
ment Cross-
border 
trade Invest-
ment Cross-
border 
trade 
1. Business services       
A. Professional Services Partial Improved     
B. Computer and Related Services  Partial Partial     
C. Research and Development Services  Partial Partial     
D. Real Estate Services  Partial Partial     
E. Rental/Leasing Services without Operators  Partial Partial     
F. Other Business Services  Partial Improved     
2. Communication services        
A. Postal services --- improved     
B. Courier services Partial full     
C. Telecommunication services  Partial Improved     
D. Audiovisual services --- partial     
3. Construction and related engineering 
services        
A. General construction work for buildings Partial full     
B. 
General construction work for civil Engineering Partial full     
C. Installation and assembly work  Full same     
D. Building completion and finishing work  Full same     
E. Other Partial full     
4. Distribution services       
A. Commission agents' services Partial full     
B. Wholesale trade services Partial full     
C. Retailing services Partial Improved     
D. Franchising Partial full     
5. Education services       
A. Primary education services --- Improved     
B. Secondary education services  --- Improved     
C. Higher education services  --- Improved     
D. Adult education --- Improved     
E. Other education services  --- Improved     
6. Environmental services       
A. Sewage services Full same     
B. Refuse disposal services Full same     
C. Sanitation and similar services  Full same     
D. Other Full same     
7. Financial services       
A. All insurance and insurance-related services  Partial Improved     
B. Banking and other financial services Partial Improved     
8. Health related and social services       
A. Hospital services --- Improved     
B. Other Human Health Services --- Improved     
C. Social Services --- Improved     
D. Other --- Improved     
9. Tourism and travel related services        
A. Hotels and restaurants (including catering) Partial full     
B. Travel agencies and tour operators services Partial full     
C. Tourist guides services --- full     
10. Recreational and cultural and sporting 
services       
A. Entertainment services --- full     
B. News agency services --- full     
C. Libraries, archives, museums and other 
cultural services --- Improved     
D. Sporting and other recreation al services  --- full     
11. Transport services        
A. Maritime Transport Services --- Improved     
B. Internal Waterways Transport --- Improved     
C. Air Transport Services Partial Improved     
D. Space Transport  --- full     
E. Rail Transport Services Partial full     
F. Road Transport Services Partial Improved     
G. Pipeline Transport  --- full     WT/REG364/1 
 
- 26 - 
 
  Sectors (CPC Classification) GATS FTA 
Sectoral 
Commitments Compared 
to the GATS  Existing  
non-conforming 
measure(s) Reservation(s) 
for future 
measures 
  Invest-
ment Cross-
border 
trade Invest-
ment Cross-
border 
trade 
H. Services auxiliary to all modes of transport  Partial Improved     
I. Other Transport Services  --- full     
General  MFN and Horizontal limitations, as well as Mode 4 commitments/limitations not considered in the
 Table. 
Note: Partial:  GATS commitments subject to some limitation (s) under market access or national treatment, under 
any of the three modes. 
Full: GATS commitments not subject to limitation(s) under market access or national treatment, under 
any of the three modes. 
---: No commitments. 
Improved: Overall improved commitments made under th e Agreement as compared to those under the GATS. 
Source:  Draft Consolidated GATS Schedule of Sp ecific Commitments (S/DCS/W/CAN)) and Canada's 
Schedules annexed to the Agreement.  
4.23.  In business services, although Canada ex pands the coverage under the Agreement to all 
sub-sectors, by excluding measures taken at the sub-national level from the coverage of its 
commitments under the Agreement, it replicates implicitly the reservations contained in its GATS 
Schedule. Canada has listed specific existing no n-conforming measures for auditing services, and 
services incidental to fishing and mining.  
4.24.  Telecommunications services are covered by Chapter 12 of the Agreement (described 
below). Canada commits to liberalize courier services without restriction, an improvement compared to its GATS commitments. It lib eralizes most services related to basic 
telecommunications but maintains a reservation for future measures (both relating to investment 
and cross-border trade). Most audio-visual services  are, de facto, excluded from liberalization 
commitments through the general carve-out on cultural industries.  
4.25.  Canada has not listed any non-conforming measures under Annex I and II in construction 
services under the Agreement and is thus taking more liberal commitments in this sector
22 which 
is partially bound under the GATS. In distribu tion services, Canada registers one existing 
non-conforming measure with respect to the oper ation of duty-free shops. Under the GATS, the 
education sector is unbound. Under the Agreemen t, education is covered by the liberalization 
obligations of both the services and investment chapters. However, a broad reservation on public education and public training is made under social services established or maintained for a public 
purpose. Private education is not part of the exclusion.  
4.26.  Financial services are covered in Chapter 13 of the Agreement (described below). Canada's 
commitments combine a negative and a positive-list approach. Canada permits a Honduran cross-border financial service provider to provide financial services (Article 13.6) in accordance 
with Annex 13.6. With respect to insurance and insurance-related services, Canada permits the 
cross-border provision of: insurance of risks relating to maritime transport, commercial aviation and space launching and freight; goods in international transit; reinsurance and retrocession; 
services auxiliary to insurance, such as cons ultancy, actuarial, risk assessment, and claim 
settlement services; and insurance intermediation, such as brokerage and agency. With respect to 
banking and other financial services (excluding insurance), Canada's commitments cover the 
cross-border provision and transfer of financial information and financial data processing and 
related software; and advisory and other auxiliary financial services, and credit reference and analysis, excluding intermediation.
23 In relation to the right of establishment (broadly 
corresponding to GATS mode 3) Canada's commitments follow a negative list approach with 
non-conforming measures listed in Annex III of the Agreement. Canada has not listed any current 
measures in Annex III, but lists three measures for future use reserving the right to adopt or 
                                               
22 Measures at the sub-national level may continue to apply. 
23 The commitment applies only if neither the foreign ba nk nor one of its affiliates (if subject to the Bank 
Act) maintains a financial establishment in Canada. WT/REG364/1 
 
- 27 - 
 
  maintain any measure: requiring that a foreign bank establish a subsidiary in order to accept or 
maintain retail deposits of less than CAD$150,0 00; requiring that foreign banks authorized to 
establish a branch in Canada be members of the Canadian Payments Association, and prohibiting foreign lending branches from being members of th e Canadian Payments Association; and relating 
to the cross-border trade in securities services.  
4.27.  Under the GATS, the entire health-related and social services sector is unbound. Under the 
Agreement, it is covered by the liberalization obligations of both the services and investment 
chapters. However, the broad reservation on social  services also applies to social security and 
insurance, social welfare, and health to the exte nt that they are social services established or 
maintained for a public purpose. The carve-out covers both investment and cross-border trade.  
4.28.  Canada has not listed any reservations for tourism and travel related services, an 
improvement over its GATS commitments relating to  national treatment. Recreational, cultural and 
sporting services, unbound under the GATS, are su bject to a single reservation with respect to 
examination services relating to the export and import of cultural property.  
4.29.  In transport services, partially covered in its GATS schedule, Canada expands its 
commitments, including for international maritime transport services. At the same time, it maintains a number of reservations for existing and future measures, particularly for domestic 
maritime transport services, as well as for some as pects of air transport services, cabotage applied 
to road transport, as well as some existing services auxiliary to all modes of transport.  
4.4.2  Honduras 4.30.  In its GATS schedule, Honduras has made commitments in 25 out of 155 services sectors, 
leaving in particular most business services, postal and courier services, construction services, 
distribution services, educational services, health related and social services, recreational-related services and most transport services unbound.  
4.31.  Honduras' GATS MFN exemptions cover measures in all sectors, and legal instruments 
signed with Central American countries granting preferences for trade in services. Additional exemptions are also registered for financial services, telecommunications, professional services 
and land transport. Under the Agreement, Hondur as has listed ten MFN reservations for current 
measures including investment measures on small scale trade and cooperatives, and sector-specific reservations in engineering services, education services, professional services, business consulting services, maritime and land transport, agricultural engineering, veterinary services. In 
the case of MFN reservations for future measures , Honduras retains reservations in professional 
services,
24 and social services. Honduras, like Canada, reserves the right to adopt or maintain a 
measure that accords differential treatment to countries under a bilateral or multilateral 
international agreement in force or signed prior to the Agreement's entry into force.25  
4.32.  Under the GATS, Honduras' horizontal limita tions on mode 3 apply to criteria to be taken 
into account on establishment, training of Honduran  personnel, restrictions on investment in small-
scale industry, and limitations on the use of land in coastal areas and borders. Under the 
Agreement, while some of the above-mentioned MFN reservations are horizontal and apply to all sectors (such as investment in small-scale industry and cooperatives and existing or future bilateral or multilateral agreements concluded in certain sectors), Honduras also introduces 
horizontal limitations, with respect to investment and/or cross-border trade, related to, inter alia , 
establishment criteria, licences, and the sale or disposal or equity interests in state enterprises.  
4.4.2.1  Honduras' sector-specific commitments on trade in services 
4.33.  The following section identifies the main differences, by sector, between Honduras' GATS 
schedule and its sector-specific commitments under the Agreement. It should be read in conjunction with Honduras' lists of non-conformi ng measures in Annexes I, II and III of the 
Agreement. 
                                               
24 For agronomists, chemists and pharmacists. 
25 Honduras also reserves the right to adopt or main tain any measure that accords differential treatment 
to a country on the basis of any international treaty in force or signed after the Agreement's entry into force with respect to aviation, fisheries, or maritime matters, including salvage. WT/REG364/1 
 
- 28 - 
 
  Table 4.2 Honduras: comparison between the GATS and Agreement specific 
commitments in trade in services  
Sectors (CPC Classification) GATS FTA 
Sectoral 
Commitments Compared 
to the GATS  Existing  
non-conforming 
measure(s) Reservation(s) 
for future 
measures 
  Invest-
ment Cross-
border 
trade Invest-
ment Cross-
border 
trade 
1. Business services       
A. Professional Services --- improved     
B. Computer and Related Services  partial full     
C. Research and Development Services  --- full     
D. Real Estate Services  --- full     
E. Rental/Leasing Services without Operators  --- full     
F. Other Business Services partial improved     
2. Communication services        
A. Postal services --- improved      
B. Courier services --- full     
C. Telecommunication services  partial improved      
D. Audiovisual services --- improved      
3. Construction and related engineering 
services        
A. General construction work for buildings --- full     
B. General construction work for civil Engineering --- improved     
C. Installation and assembly work  --- Full     
D. Building completion and finishing work  --- Full     
E. Other --- Full     
4. Distribution services       
A. Commission agents' services --- full     
B. Wholesale trade services --- partial     
C. Retailing services --- partial     
D. Franchising --- full     
5. Education services       
A. Primary education services --- partial     
B. Secondary education services  --- partial     
C. Higher education services  --- partial     
D. Adult education --- partial     
E. Other education services  --- partial     
6. Environmental services       
A. Sewage services --- partial      
B. Refuse disposal services --- partial      
C. Sanitation and similar services  --- partial      
D. Other --- partial      
7. Financial services       
A. All insurance and insurance-related services  partial improved     
B. Banking and other financial services partial improved     
8. Health related and social services       
A. Hospital services --- partial      
B. Other Human Health Services --- partial      
C. Social Services --- partial      
D. Other --- partial      
9. Tourism and travel related services        
A. Hotels and restaurants (including catering) partial Full     
B. Travel agencies and tour operators services --- Full     
C. Tourist guides services --- full     
10. Recreational and cultural and sporting 
services       
A. Entertainment services --- partial     
B. News agency services --- partial     
C. Libraries, archives, museums and other 
cultural services --- full     
D. Sporting and other recreational services  --- partial     
11. Transport services        
A. Maritime Transport Services --- partial     
B. Internal Waterways Transport --- partial     
C. Air Transport Services Partial partial     
D. Space Transport  --- partial     
E. Rail Transport Services --- partial     
F. Road Transport Services Partial partial     
G. Pipeline Transport  --- partial     
H. Services auxiliary to all modes of transport  --- partial     
I. Other Transport Services  --- partial     WT/REG364/1 
 
- 29 - 
 
  General  MFN and Horizontal limitations, as well as Mode 4 commitments/limitations not considered in the 
Note: Table. 
Partial:  GATS commitments subject to some limitation (s) under market access or national treatment, under 
any of the three modes. 
Full: GATS commitments not subject to limitation(s) under market access or national treatment, under 
any of the three modes. 
---: No commitments. Improved: Overall improved commitments made under th e Agreement as compared to those under the GATS. 
 
Source:  Draft Consolidated GATS Schedule of Spec ific Commitments (S/DCS/W/HND/Rev.1)) and Honduras' 
Schedules annexed to the Agreement.  
4.34.  In business services, Honduras expands the coverage under the Agreement to all sub-
sectors, listing no reservations for computer se rvices, research and development services, real 
estate services, and rental/leasing services without operators. In professional services, for which it 
has no GATS commitments, Honduras has listed a number of reservations that apply to engineering services, veterinary services, para-medical personnel, notaries, public accountants, architects, nurses, doctors and dentists, as well as a blanket reservation in which Honduras grants 
authorization to practise a profession on the basi s of reciprocity. In the case of foreign medical 
personnel, Honduras places staffing quotas and higher registration fees. For notaries, public accountants and architects, nationality requirements, rules on establishment or registration apply. 
In other business services, Honduras schedules reservations in electrical energy distribution, 
fisheries services, forestry engineering, agricult ural engineering and agronomy, investigation and 
security services, economic consulting and business consulting services. In fisheries, agricultural 
engineering and forestry services, nationality requ irements, higher registration fees or staffing 
quotas apply. In addition, Honduras has scheduled  a future measure in relation to agronomists, 
chemists, pharmacists, and social workers.  
4.35.  In communication services, for which it has partial commitments under the GATS, Honduras 
continues to reserve the supply of postal services to the government but broadens its 
commitments in the other subsectors. In public telecommunications, Honduras does not permit the direct participation of foreign governments in the provision of services and places equity limits on 
operators in the telecommunications sector under the Agreement. In audiovisual services, senior 
management positions in newspapers or radio and television are subject to a nationality by birth requirement. Honduras also maintains a future me asure reserving the right to adopt, maintain or 
modify the level of ownership in the national telecommunications company, as well as its affiliates 
or subsidiaries. 
4.36.  In construction and related engineering services, Honduras has made full commitments in 
all subsectors, except in construction or consulting services for civil engineering services which are 
subject to a reservation. Foreign firms must be organized and registered according to Honduran 
law to perform civil engineering projects in Honduras. Higher registration fees apply to foreign companies and authorization is also required for foreign workers in order to participate in such 
projects. 
4.37.  In distribution services, Honduras maintains a nationality and equity restriction on the 
distribution of petroleum products and reserves the distribution, wholesale and retail sale of 
weapons, munitions and other related items to it s armed forces. Under future measures, Honduras 
reserves the right to adopt or maintain any measure concerning the import and wholesale distribution of petroleum products and their derivatives. In commission agents' services and franchising, Honduras has listed no reservations. 
4.38.  In education services, Honduras places a nationality by birth requirement on school 
directors and supervisors (for private preschool, primary, and secondary educational services) and a reciprocity requirement for the teaching of ce rtain subjects. Under future measures Honduras 
has scheduled a blanket reservation on social services that applies to public education and 
training. Private provision of such services is however not restricted. 
4.39.  Environmental services, not scheduled under the GATS, are subject to one reservation 
under the Agreement. Public water distribution , waste disposal, and sanitation and hygiene 
services are reserved for the State. WT/REG364/1 
 
- 30 - 
 
  4.40.  Under the Agreement, Honduras has made commitments to the cross-border provision of 
the following insurance-related services by Canadian cross-border financial service providers: insurance of risks relating to maritime transport, commercial aviation and space launching and freight; goods in international transit; reinsurance and retrocession; services auxiliary to 
insurance, such as consultancy, actuarial, ri sk assessment, and claim settlement services; and 
insurance intermediation, such as brokerage and agency are covered. Honduras permits the provision of the same insurance services on a mo de 4 basis, ("by a national of a Party in the 
territory of the other Party"). With respect to banking and other financial services (excluding 
insurance), Honduras' cross-border commitments cover the provision and transfer of financial information and financial data processing and related software; and advisory and other auxiliary financial services, and credit reference and analys is, excluding intermediation. In its Annex III of 
non-conforming measures in relation to the right of establishment, Honduras has scheduled 
reservations for current measures covering inter alia  establishment requirements applicable to 
banks, exchange bureaux, securi ties exchanges, fund administration companies, and centralized 
depositories for the custody, compensation and liquidation of shares. Foreign insurance institutions 
seeking to establish in Honduras are subject to capital requirements. Under future measures, Honduras reserves the right to adopt or mainta in a measure with respect to the provision of 
services by savings and loan cooperatives, and requiring the incorporation in Honduras of foreign 
financial institutions, other than those seeking to operate as banks or insurance companies within Honduras.  
4.41.  Health related and social services are subject to a broad reservation on social services which 
allows Honduras to adopt or maintain any non-conforming measure relating to social services 
established or maintained for reasons of public interest such as pensions, unemployment insurance, social security, pension funds, social welfare, public education, public training, health 
and childcare. Private provision of such services is however not restricted. 
4.42.  In tourism and travel-related services, Honduras has scheduled no reservations under the 
Agreement. In recreational, cultural and sporting services, for which it has no GATS commitments, 
Honduras has liberalized libraries, archives, museums and other cultural and recreational services, 
not committed under the GATS. In the remaining subsectors, it maintains a few reservations. In entertainment services, foreign musicians must register with the competent authorities and pay performance fees. Licences to operate casinos are reserved for Honduran nationals by birth and 
Honduran companies. The national lottery is reserved to a State institution. Senior managerial 
positions in newspapers are reserved to Honduran s. In sporting services, foreign soccer players 
must be resident in Honduras and registered with the competent authority. Clubs can register up 
to four foreign players. 
4.43.  In transport services, Honduras has broadened its commitments but maintains reservations 
in air, maritime, land and rail transport. In public air transport services, Honduras reserves 
cabotage to Honduran companies. Private air speciality air services are subject to authorization 
and must fulfil a nationality requirement. In maritime transport, coastal navigation for commercial purposes is reserved for Honduran merchant vessels , though foreign vessels might be authorized if 
no Honduran vessels are available. In land transport, public domestic land passenger and cargo 
transportation services may only be supplied by  Honduran nationals and companies. Operating 
certificates are subject to an economic needs test. Public international land passenger and cargo transportation services may be supplied by foreign nationals and companies established under 
foreign law on the basis of reciprocity. In railways, the Honduran National Railway may sell its 
subsidiaries only to Honduran nationals and companies, while senior managers must be Honduran by birth.  
4.5  Regulatory provisions  
4.5.1  Domestic regulation 4.44.  Under Article 11.8, the Parties note their mu tual obligations related to domestic regulation 
in Article VI:4 of the GATS and affirm their comm itment to develop necessary disciplines under the 
GATS. If any of those disciplines are adopte d by the WTO Members, the Parties will, as 
appropriate, jointly review them to determine whether Article 11.8 needs to be supplemented. WT/REG364/1 
 
- 31 - 
 
  4.45.  Pending the incorporation of such discipline,  the Parties shall aim to ensure that measures 
relating to qualification requirements and procedures, technical standards, and licensing requirements are: based on objective and transparent criteria, such as competence and the ability to provide 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 provision of the 
service. If authorization is required for the provision of a service, the Parties shall within a reasonable period of time inform the applicant of the decision concerning the application and 
provide information concerning the status of the application. 
4.5.2  Recognition 4.46.  The Agreement mirrors the provisions in pa ragraphs 1 through 3 of Article VII of the GATS 
(Article 11.9). It also states that the Parties shall encourage their relevant professional service 
bodies to exchange information on existing standards and criteria for the authorization, licensing 
and certification of professional service providers; meet within 18 months to discuss the development of such an arrangement; and notify the Commission following its conclusion. Within 
one year of the Agreement's entry into force, th e Parties shall determine to which professional 
service sectors such licensing and certification applies.  
4.47.  Article 11.11 provides that the Parties may decide to encourage the relevant professional 
bodies in its territory to develop procedures for the temporary licensing of professional services 
providers of the other Party and shall consider establishing a work program to this end. The Commission shall review the implementation of the provision on temporary licensing every two years. 
4.5.3   Subsidies 
4.48.  The Agreement does not contain any specific disciplines on subsidies in trade in services. 
Moreover, neither Chapter 11 (cross-border trade in services) nor Chapter 10 (investment) apply 
to a subsidy or grant provided by a Party or a State enterprise, including a Government-supported 
loan, guarantee or insurance. 
4.5.4  Safeguards 
4.49.  The Agreement does not contain any provision specific to safeguards in relation to trade in 
services. 
4.5.5  Other 4.6  Sector specific provisions on trade in services 
4.6.1   Telecommunications 
4.50.   Chapter 12 of the Agreement covers telecommunications and applies to measures adopted 
or maintained by a Party for accessing and using a public telecommunications network or service 
and in relation to an obligation of a provider of  a public telecommunications network or service, as 
well as to any other measure relating to a public telecommunications network or service. Chapter 12 does not apply to a measure of a Party affecting the transmission by any means, 
including broadcast or cable distribution, of radi o or television programming intended for direct 
reception by the public. Moreover, it does not require a Party to authorize a service supplier to establish, construct, acquire, lease, operate or  provide a telecommunications network or service, 
where that network or service is not offered to th e public generally. In addition, Chapter 12 does 
not prevent a Party from prohibiting a service provider operating a private network from using that 
service provider's network to provide a public telecommunications network or service to a third party; or require a Party to authorize a service provider of the other Party to establish, construct, 
acquire, lease, operate or provide a telecomm unications network or service, other than as 
specifically provided for in the Agreement. The Telecommunications chapter does not include market access commitments. They are provided  through the CBTS and Investment chapters. 
4.51.  Chapter 12 mirrors some of the provisio ns of the WTO Annex on Telecommunications such 
as access to and use of a public telecommunications network or service, with additional provisions WT/REG364/1 
 
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  to ensure that an enterprise of the other Party is  permitted to provide a service to individual or 
multiple end-users over leased or owned circuits and perform switching, signalling, processing or conversion functions. In addition, conditions for access to and use of public telecommunications network or service may include a licensing, permit, registration, or notification procedure which is 
transparent and provides for the processing of applications filed in accordance with a Party's 
domestic law.  
4.52.  The obligations relating to major providers of public telecommunications services are laid 
out in Article 12.4 and mirror the provisions of the Telecoms Reference Paper including competitive 
safeguards, interconnection, independent regulatory bodies and universal service. In the case of Honduras, rural telephone suppliers may be exempted  from the provisions of Article 12.4 provided 
that the rural telephone company provides public telecommunications services to fewer than 2% of 
the subscriber lines installed in Honduras (Annex 12.4). Also, in the case of Honduras, Article 12.4 
does not apply to commercial mobile services. Articles 12.7-12.12 deal respectively with licences and other authorization; allocation and use of scarce resources; enforcement; resolution of 
domestic telecommunications disputes; transparency; and forbearance.  
4.53.  The Parties recognize the importance of international standards for global compatibility and 
interoperability of telecommunications networks or services and undertake to promote those 
standards through the work of relevant international bodies, including the International 
Telecommunication Union and the International Organization for Standardization (Article 12.14). 
4.54.  In the event of inconsistency between Ch apter 12 and another Chapter of the Agreement, 
Chapter 12 prevails to the extent of the inconsistency (Article 12.13).  
4.6.2  Financial Services 
4.55.  Chapter 13 of the Agreement covers financial services and applies to a measure adopted or 
maintained by a Party relating to a financial institution of the other Party; an investor of the other 
Party, and an investment of that investor, in a financial institution in the Party's territory; and 
cross-border trade in financial services. In that context, Chapter 10 (investment) and 11 (cross-border trade in services) apply to such meas ures only to the extent that those Chapters are 
incorporated into Chapter 13.
26 
4.56.  Chapter 13 does not prevent a Party, in cluding its public entities, from exclusively 
conducting or providing in its territory an activity or service forming part of a public retirement plan or statutory system of social security; or an activity or service for the account, with the 
guarantee or using the financial resources of the Party, including its public entities (Article 13.2). 
4.57.  Each Party shall accord national treatment to an investor, a financial institution or an 
investment of an investor of the other Party in a financial institution, in relation to establishment, 
acquisition, expansion, management, conduct, operation, and sale or other disposition of a 
financial institution or investment (Article 13.3). In relation to a cross-border financial service provider of the other Party, national treatment sh all be granted for the provision of the relevant 
service. Differences in market share, profitability, or size do not in themselves establish a breach 
of the national treatment obligation. 
4.58.  Each Party shall accord MFN treatment to an investor, a financial institution, an investment 
of an investor of the other Party in a financial institution and a cross-border financial service 
provider of the other Party (Article 13.4). A Party may recognize unilaterally, through 
harmonization or based upon an agreement or an  arrangement, a prudential measure of a non-
Party in the application of a measure covered by Chapter 13. Adequate opportunity shall be 
provided for the other Party to demonstrate that circumstances exist in which there are or would 
                                               
26 Articles 10.10 (Investment – Transfers), 10.11 (Investment – Expropriation), 10.13 (Investment – 
Special Formalities and Information Requirements), 10.14 (Investment – Denial of Benefits), 10.15 (Investment – Health, Safety and Environmental Meas ures) and 11.10 (Cross-Border Trade in Services – 
Denial of Benefits) are incorporated into and made a part of Chapter 13. Section C of Chapter 10 (Investment) 
is incorporated into and made a part of Chapter 13 sole ly for claims that a Party has breached Articles 10.10 
(Investment – Transfers), 10.11 (Investment – Expropriation), 10.13 (Investment – Special Formalities and Information Requirements), or 10.14 (Investment – Denial of Benefits). WT/REG364/1 
 
- 33 - 
 
  be equivalent regulation, oversight and implem entation of regulation, and if appropriate, 
procedures concerning the sharing of information between the Parties. 
4.59.  Right of establishment in a Party shall be permitted for the other Party's investor in a 
financial institution subject to the conditions contained in Article 13.5. 
4.60.  Each Party shall permit, under terms and conditions that accord national treatment, a 
cross-border financial service provider of the other Party to provide a financial service specified in Annex 13.6. 
4.61.  A Party shall permit a financial institution of the other Party to supply a new financial service 
that the first Party would permit its own financial institutions, in like circumstances, to supply under its domestic law. Nevertheless, a Party may require the financial institution to request permission or to notify the relevant regulator in order to obtain that permission. Moreover it may 
refuse to grant permission if the introduction of the financial service would require the Party to 
adopt or amend a statute. A Party may establish requirements related to the juridical form though which the new financial service may be provided. It may also require authorization for the supply 
of such a service (Article 13.7).  
4.62.  A Party may not require a financial institution of the other Party to engage natural persons 
of any particular nationality as senior managerial or other essential personnel. Moreover, a Party 
may not require that more than a simple majority of the board of directors of a financial institution 
of the other Party be composed of nationals of the Party or natural persons residing in the territory 
of the Party (Article 13.8). 
4.63.  The Parties' reservations to existing (Section I) and possible future (Section II) 
non-conforming measures related to national and MFN treatment, right of establishment and 
senior management and boards of directors ar e contained in Annex III of the Agreement. The 
same principle is applicable for the reservations listing non-conforming measures impacting 
cross-border trade in financial services.  
4.64.  Article 13.10 clarifies that the Parties may adopt or maintain a measure for prudential 
reasons, including: the protection of investors, depositors, financial market participants, policy-
holders, policy-claimants, or persons to whom a fi duciary duty is owed by an individual financial 
institution or cross-border financial service provider; the maintenance of the safety, soundness, integrity or financial responsibility of an individual financial institution or cross-border financial service provider; and ensuring the integrity and stability of the financial system of a Party. This 
prudential exception applies to Chapters 10 (inv estment), 11 (cross-border trade in services), 
12 (telecommunications), 13 (financial services ), 14 (temporary entry for business persons), 
15 (competition policy, monopolies and state enterprises), or 16 (electronic commerce). Similarly, 
the disciplines contained in these Chapters do not apply to non-discriminatory measures of general 
application taken by any public entity in pursuit of monetary and related credit policies or exchange rate policies. Moreover, notwithstanding provisions on transfers and payments, a Party 
may prevent or limit transfers by a financial institution or cross-border financial service provider 
to, or for the benefit of, an affiliate of or person related to such institution or supplier, through the 
equitable, non-discriminatory and good-faith application of measures relating to maintenance of the safety, soundness, integrity or financial responsibility of financial institutions or cross-border 
financial service suppliers. Furthermore, a Party may adopt or enforce a measure necessary to 
secure compliance with its laws or regulations that is not inconsistent with Chapter 13, including a measure relating to the prevention of deceptive and fraudulent practices or to deal with the effects 
of a default on financial services contracts. A Party may not apply that measure in a manner that 
would constitute a means of arbitrary or unjustifiable discrimination between countries where like conditions prevail, or a disguised restriction on investment in a financial institution or on 
cross-border trade in financial services. 
4.65.  Each Party commits to promoting regulatory transparency in financial services. Article 13.11 
tailors certain provisions in Chapter 20 (transparency) and specifies transparency obligations applicable to financial services. 
4.66.  Article 13.12 clarifies that Chapter 13 does not require a Party to furnish or allow access to: 
information related to the financial affairs or accounts of individual customers of financial WT/REG364/1 
 
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  institutions or cross-border financial service providers; or confidential information which, if 
disclosed, would impede law enforcement or otherw ise be contrary to the public interest or 
prejudice legitimate commercial interests of a particular enterprise. 
4.67.  If a Party requires a financial institution or a cross-border financial service provider of the 
other Party to be a member of, participate in, or have access to, a self-regulatory organization to 
provide a financial service in or into the territory of that Party then it shall ensure that the self-regulatory organization observes the obligations of Chapter 13 (Article 13.13). 
4.68.  In accordance with the provision of national  treatment, each Party shall grant to a financial 
institution of the other Party established in its territory access to payment and clearing systems operated by a public entity, as well as access to official funding and refinancing facilities available in the normal course of ordinary business (Article 13.14). 
4.69.  Article 13.15 establishes a Financial Servic es Committee to: supervise the implementation 
of this Chapter and its further elaboration; consider issues regarding financial services that are referred to it by a Party; and participate in the dispute settlement procedures in accordance with 
Article 13.18. The Committee shall meet annually, or as it otherwise decides, to assess the 
functioning of this Agreement as it applies to financial services. 
4.70.  The general provisions on consultations and dispute settlement, under Chapter 21, are 
modified and tailored by Articles 13.16 and 13.17 with regard to matters arising under the 
Agreement that affect a financial service. In particular, a specific procedure is applicable for investment disputes in financial services, as contained in Article 13.18. 
5  GENERAL PROVISIONS OF THE AGREEMENT 
5.1  Transparency 
5.1.  In addition to the provisions on transparen cy in specific parts of the Agreement, Chapter 20 
covers general transparency disciplines. Articl es 20.2 to 20.6 contain requirements on contact 
points, publication, notification and provision of information, administrative proceedings, and 
review and appeal. Articles 20.7 to 20.10 cover anti-corruption transparency-related matters. 
5.2  Current payments and capital movements 
5.2.  Article 10.10 (Investment – Transfers) cont ains rules applying to current payments and 
capital movements related to investments. In addition, this Agreement includes a Balance of Payments Exception. 
5.3  Exceptions 
5.3.  Chapter 22 of the Agreement addresses exceptions. According to Article 22.2, and for the 
purposes of Chapters 3 through 9 and Chapter 16 (National Treatment and Market Access for Goods, Rules of Origin, Customs Procedures, Trade Facilitation, Sanitary and Phytosanitary 
Measures, Technical Barriers to Trade, Emergency Action and Electronic Commerce) to the 
Agreement, Article XX of GATT 1994 is incorpor ated into and made part of the Agreement, mutatis 
mutandis . The Parties understand that the measures referred to in GATT 1994 Article XX(b) 
include environmental measures necessary to protect human, animal or plant life or health and 
that GATT 1994 Article XX (g) applies to measures relating to the conservation of living and non-
living exhaustible natural resources.  
5.4.  For the purposes of Chapters 11, 12,  14 and 16 (Cross-Border Trade in Services, 
Telecommunications, Temporary Entry for Business Persons, and Electronic Commerce), 
Article XIV (a), (b), and (c) of GATS is incorporated into the Agreement, mutatis mutandis . The 
Parties understand that the measures referred to in GATS Article XIV (b) include environmental 
measures necessary to protect human, animal or plan t life or health. Moreover, for the purposes of 
Chapter 10 (Investment), a Party may adopt or enforce a measure necessary: (i) to protect human, animal or plant life or health, which the Parties understand to include environmental 
measures necessary to protect human, animal or plant life or health; (ii) to ensure compliance 
with laws and regulations that are not inconsistent with the Agreement; or (iii) for the WT/REG364/1 
 
- 35 - 
 
  conservation of living or non-living exhaustible natural resources, provided that the measure taken 
for any of these purposes is not applied in a manner that constitutes arbitrary or unjustifiable discrimination between investments or between investors, or a disguised restriction on international trade or investment. 
5.5.  Article 22.3 is similar to the security exceptions under Article XXI of GATT 1994 and 
Article XIV bis of the GATS, and constitutes a national security provision applicable to all areas 
covered by the Agreement. 
5.6.  Article 22.4 provides that the Agreement does not apply to a taxation measure. The 
Agreement does not affect the rights and obligations of a Party under a tax convention. In the event of an inconsistency between the Agreem ent and a tax convention, the tax convention 
prevails. Notwithstanding this, Article 3.3 (Nat ional Treatment and Market Access for Goods - 
National Treatment) and the provisions of the Agr eement necessary to give effect to that article 
apply to a taxation measure to the same extent as  Article III of GATT 1994. Similarly, Article 3.11 
(National Treatment and Market Access for Goods - Export Taxes) also applies to a taxation 
measure.  
5.7.  Article 11.3 (Cross-Border Trade in Services - National Treatment) and Article 13.3 (Financial 
Services - National Treatment) apply to a taxation measures on income, capital gains or on the 
taxable capital of corporations that relate to the purchase or consumption of particular services. In 
the same vein, Articles 10.4, 10.5, 11.3, 11.4, 13.3 and 13.4, dealing with national and MFN treatment in the Investment, Cross-Border Trade in Services and Financial Services Chapters, apply to a taxation measure, other than a taxation measure on income, capital gains, the taxable 
capital of corporations, estates, inheritances and gifts. In that regard, the Agreement clarifies that, 
inter alia , this does not impose an MFN obligation with respect to an advantage accorded by a 
Party pursuant to a tax convention.  
5.8.  Other paragraphs of Article 22.4 deal with taxation and expropriation, and how to deal with 
taxation measures in the case of a dispute between the Parties.  
5.9.  According to Article 22.6, the Agreement does not require a Party to furnish or allow access 
to information that would impede law enforcement, if disclosed; or would be contrary to the 
Party's law protecting the deliberative and policy-making processes of the executive branch of government at the cabinet level, personal privacy, or the financial affairs and accounts of individual customers of financial institutions. Further, the Agreement does not require, in the 
course of dispute settlement procedures under the Agreement, a Party to furnish or allow access to 
information protected under its competition laws, or a competition authority of a Party to furnish or allow access to information that is privileged or otherwise protected from disclosure 
5.10.  The Agreement does not apply to a measure adopted or maintained by a Party with respect 
to a person engaged in a cultural industry, except as specifically provided for in Article 3.4 (National Treatment and Market Access for Goods - Tariff Elimination (Article 22.7). 
5.11.  If a right or obligation in the Agreement duplicates a right or obligation in the WTO 
Agreement, a decision on a waiver adopted by th e WTO is deemed to be in conformity with the 
Agreement, unless the Parties agree otherwise. The conforming measure of either Party may not give rise to a claim under the investor state di spute mechanism of the Agreement (Article 22.8). 
5.4  Balance of Payments Safeguards 
5.12.  The Agreement does not prevent a Party from adopting or maintaining a measure that 
restricts transfers if it experiences serious balance of payments difficulties or the threat thereof 
(Article 22.5). The Article lists a number of conditions with which the BOP restriction must apply, 
including separate conditions to the extent that the restriction is imposed on transfers other than 
those related to cross-border trade in financial services, and restrictions on cross-border trade in 
financial services. In general, BOP restrictions must be consistent with the relevant Articles of the 
IMF; avoid unnecessary damage to the commercial, economic or financial interests of the other Party; not be more burdensome than necessary to deal with the BOP difficulties; be temporary and 
be phased out progressively as the BOP situation improves; and be applied on a national 
treatment or MFN treatment basis, whichever is better. WT/REG364/1 
 
- 36 - 
 
  5.5  Accession and Withdrawal 
5.13.  A country or group of countries may accede to the Agreement upon terms and conditions 
a g r e e d  b e t w e e n  t h a t  c o u n t r y  o r  g r o u p  o f  c o u n t r i es and the Parties and following approval in 
accordance with the applicable internal procedures of each Party and acceding country 
(Article 23.6). 
5.14.  The Agreement may be terminated by giving notice in writing. It shall cease to be in force 
180 days after the date of that notification (Article 23.5). 
5.6  Institutional framework 
5.15.  The Agreement establishes a Free Trade Commi ssion to supervise the implementation of the 
Agreement, oversee its further elaboration, and consider any other matter that may affect its operation (Article 21.1). The Commission may also adopt interpretative decisions concerning the 
Agreement which shall be binding on dispute settlement panels and tribunals; request the advice 
of non-governmental persons or groups; take any other action in the exercise of its functions as the Parties may decide; and advance the objectives of the Agreement. 
5.16.  The Commission may establish committees, subcommittees, or working groups. All 
decisions of the Commission shall be taken by consensus, unless decided otherwise. Each Party shall appoint a Free Trade Coordinator. The Commi ssion shall establish and oversee a Secretariat 
composed of National Sections. 
5.17.  The Parties establish a Committee on Trade in Goods and Rules of Origin (Article 3.19) with 
responsibility to ensure the effective implementation and administration of the Chapters on National Treatment and Market Access on Trade in Goods, Rules of Origin, Customs Procedures, 
Trade Facilitation, Emergency Action and the Uniform Regulations. They also establish a 
Sub-Committee on Agriculture. 
5.18.  The Parties establish a Customs Procedures Sub-Committee with responsibility inter alia  to 
decide on tariff classification and valuation matters relating to determinations of origin; equivalent 
procedures and criteria for the request, approval , modification, revocation and implementation of 
advance rulings; revision of the Certificate of Origin; and any other customs-related matter (Article 
5.14). The Parties establish a Committee on SPS matters, with responsibility to provide a forum for 
discussions and cooperation inter alia  to enhance the effectiveness of their SPS measures and to 
facilitate discussion of bilateral issues with a view to avoiding disputes (Article 7.3).  
5.19.  The Parties establish a Financial Services Committee (Article 13.15). The Committee shall 
supervise the implementation of Chapter 13 and its further elaboration; consider issues regarding 
financial services that are referred to it by a Party; and participate in dispute settlement procedures under Article 13.18. In addition, the Co mmittee shall meet annually, or as it otherwise 
decides, to assess the functioning of the Agreement as it applies to financial services. The 
Committee shall inform the Commission of the results of each meeting. 
5.7  Dispute settlement 
5.20.  Section B of Chapter 21 sets out the procedur es and institutional arrangements that apply in 
cases of disputes between the Parties regarding qu estions of interpretation or application of the 
Agreement. It does not apply to disputes regarding the provisions of Chapters 7 (SPS), 8 (TBT), 18 (Environment), 19 (Labour), Section B of Chapter 20 (Transparency - Anti-Corruption and 
Articles 15.2 (Competition Policy, Monopolies, and State Enterprises - Competition Policy) and 
11.8(2) (Cross-Border Trade in Services - Domest ic Regulation). The WTO Agreement exclusively 
governs the rights and obligations of the Parties regarding subsidies and the application of 
anti-dumping and countervailing measures, including the settlement of any disputes about those 
matters (Article 1.3).  
5.21.  The Parties shall endeavour to agree on the interpretation and application of the Agreement, 
and shall attempt through cooperation and consultations to arrive at a mutually satisfactory 
resolution of a matter that might affect its operation (Article 21.5).  WT/REG364/1 
 
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  5.22.  Article 21.7 contains a choice of forum clause indicating that a dispute regarding a matter 
arising under this Agreement and the WTO Agreement, or any other free trade agreement to which the Parties are party, may be settled in any of those fora at the discretion of the complaining Party. If the Party complained against claims that the matter is related to the Multilateral 
Environmental Agreements cited in the Agreement,  and requests in writing that the matter be 
considered under the Agreement, the complaining Party may only have recourse to dispute settlement procedures under the Agreement. Once the forum is selected it shall be used to the 
exclusion of others, unless the Party complained against claims that the matter falls under one of 
the Multilateral Environmental Agreements (in wh ich case the dispute settlement procedure of the 
Agreement is to be used).  
5.23.  A Party may request in writing consultations with the other Party and they shall enter into 
consultations within 25 days (15 days in the case of perishable goods) of the receipt of the written 
request. The complaining Party may request the establishment of a panel if the Party complained against does not respond to a request for consultations within 10 days of receiving the request for 
consultations; or does not enter into consultations within 25 days (15 days in case of perishable 
goods) of receiving the request for consultations (Article 21.8). 
5.24.  The Parties may decide to undertake voluntar ily an alternative method of dispute resolution, 
such as good offices, conciliation or mediation (Article 21.9).  
5.25.  A panel is to be established if the Parties fail to resolve a matter within 35 days (18 days for 
perishable goods) of the date of receipt of the request for consultations. A panel may not be established to review a proposed measure (Article 21.10). Rules on the panel composition, 
qualifications of panel members, rules of procedure, and the panel's terms of reference are 
contained in Articles 21.11-21.14.  
5.26.  A preliminary panel report is to be issued within 90 days after the last panel member is 
selected on which the Parties may submit comments within 14 days. A final report shall be 
presented within 30 days of presentation of the pr eliminary report, if the panel determines that all 
measures at issue are not inconsistent with the obligations of the Agreement and do not cause 
nullification or impairment; or within 60 days of the presentation of the preliminary report, if the 
panel determines that a measure at issue is incons istent with the obligations of the Agreement or 
causes nullification or impairment (Article 21.16). Whenever possible, the resolution of the dispute 
shall be the non-implementation or removal of a measure not conforming to the Agreement, or 
failing such a resolution, compensation (Article 21.17).  
5.27.  If the Parties do not reach a mutually satisf actory resolution of the dispute within 30 days of 
the expiry of the period of time for implementation of the final report, the complaining Party may 
suspend benefits or other obligations equivalent to the degree of adverse trade effects until the 
Parties have reached a mutually satisfactory resolution of the dispute; or the Party complained against has removed the measure inconsistent with the Agreement. A Party may request the 
establishment of a compliance panel to determine whether the level of benefits or other obligations 
suspended by the complaining Party is excessive; or to rule on any disagreement regarding the 
non-implementation or removal of a measure determined by the previous panel to be inconsistent with the Agreement (Article 21.18). 
5.28.  Section C of Chapter 21 deals with Dome stic Proceedings and Private Commercial Dispute 
Settlement including referral of a matter from a judicial or administrative proceeding, private rights, and alternative dispute resolution. Annexes 21.1, 21.3 and 21.6 deal respectively with 
implementation of revisions or modification approved by the Commission, remuneration and 
payment of expenses, and nullification or impairment. 
5.29.  Section C of Chapter 10 on investment covers the settlement of disputes between a Party 
and an investor of the other Party. 
5.8  Relationship with other agreements concluded by the Parties 5.30.  The Parties affirm their existing rights an d obligations with respect to each other under the 
WTO agreement and other agreements to which they  are a party. In the event of inconsistency WT/REG364/1 
 
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  between the Agreement and the agreements refe rred to in paragraph 1 of Article 1.3, the 
Agreement prevails, except as otherwise provided in it (Article 1.3). 
5.31.  In the event of any inconsistency between an  obligation in the Agreement and an obligation 
of a Party under: the Convention of International Trade in Endangered Species of Wild Fauna and 
Flora; the Montreal Protocol on Substances that Deplete the Ozone Layer ; the Basel Convention on 
the Control of Transboundary Movements of Hazardous Wastes and Their Disposal ; the Rotterdam 
Convention on the Prior Informed Consent Procedure for Certain Hazardous Chemicals and 
Pesticides in International Trade ; and the Stockholm Convention on Persistent Organic Pollutants , 
the obligation in these agreements prevails. If, however, a Party has a choice among equally effective and reasonably available means of comply ing with that obligation, the Party shall choose 
the alternative that is the least inconsistent with the other provisions of the Agreement 
(Article 1.4). 
Table 5.1 Canada and Honduras: Participation in  other RTAs (notified and non-notified in 
force), as of 8 April 2016 
RTA Name Date of 
entry into 
force Coverage GATT/WTO Notification 
Year WTO Provision 
CANADA 
Canada - Republic of Korea 01-Jan-15 Goods & Services 2015 GATT Art. XXIV & GATS Art. V 
Canada - Panama 01-Apr-13 Goods & Servic es 2013 GATT Art. XXIV & GATS Art. V 
Canada - Jordan 01-Oct-12 Goods 2013 GATT Art. XXIV 
Canada - Colombia 15-Aug-11 Goods & Serv ices 2011 GATT Art. XXIV & GATS Art. V 
Canada - Peru 01-Aug-09 Goods & Services 2009 GATT Art. XXIV & GATS Art. V 
Canada - EFTA 01-Jul-09 Goods 2009 GATT Art. XXIV 
Canada - Costa Rica 01-Nov-02 Goods 2003 GATT Art. XXIV 
Canada - Chile 05-Jul-97 Goods & Services 1997 GATT Art. XXIV & GATS Art. V 
Canada - Israel 01-Jan-97 Goods 1997 GATT Art. XXIV 
North American Free Trade 
Agreement (NAFTA) 01-Jan-94 Goods & Services 1993 
1995 GATT Art. XXIV & GATS Art. V 
HONDURAS 
European Union - Central 
America 01-Aug-13 Goods & Services 2013 GATT Art. XXIV & GATS Art. V 
Mexico - Central America 01-Sep-12 Goods & Services 2014 GATT Art. XXIV & GATS Art. V 
Colombia - Northern Triangle 
(El Salvador, Guatemala, Honduras) 12-Nov-09 Goods & Services 2012 GATT Art. XXIV & GATS Art. V 
Panama - Honduras (Panama-
Central America ) 09-Jan-09 Goods & Services 2009 GATT Art. XXIV & GATS Art. V 
Chile - Honduras (Chile-Central 
America) 19-Jul-08 Goods & Services 2011 GATT Art. XXIV & GATS Art. V 
El Salvador- Honduras - 
Chinese Taipei 01-Mar-08 Goods & Services 2010 GATT Art. XXIV & GATS Art. V 
Dominican Republic - Central 
America - United States Free Trade Agreement (CAFTA-DR) 01-Mar-06 Goods & Services 2006 GATT Art. XXIV & GATS Art. V 
Dominican Republic - Central 
America 04-Oct-01 Goods & Services 2012 GATT Art. XXIV & GATS Art. V 
Central American Common 
Market (CACM) 04-Jun-61 Goods 1961 GATT Art. XXIV 
Honduras - Venezuela [LAIA, 
AAP.A25TM N°16] 22-Sep-86 Goods Not notified 
CACM - Accession of Panama  06-May-13  Goods Not notified 
Source: WTO Secretariat. 
 
5.9  Government procurement 
5.32.  Government procurement is covered in Chap ter 17 of the Agreement, and applies to trade 
in goods and services. The procuring entities covere d by the disciplines of the Agreement are listed 
in the annexes to the Parties' Schedules in Chapter 17. All goods are covered by Chapter 17 
except for the procurement for certain goods/entities listed in Annex 17.3. All services procured by WT/REG364/1 
 
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  covered entities are covered by Chapter 17 except  for the list of exclusions in Annex 17.4. 
Construction services excluded from coverage are listed in Annex 17.5. Annex 17.6 lists general notes and exclusions of the Parties. The applicable thresholds, which differ for goods, services, and construction services, and the level of entity are indicated in the Annexes to Chapter 17. The 
method applicable to adjust the thresholds every two years is described in Annex 17.7. 
Procurement thresholds of the Parties are shown in Table 5.2. 
Table 5.2 Procurement thresholds applied by the Parties 
Country The Agreement GPA 
Central entities 
(Annex 17.1) Other covered 
entities  
(Annex 17.2) Central 
entities 
(Annex 1) Sub-central 
entities 
(Annex 2) Other 
entities 
(Annex 3) 
SDR SDR SDR 
Canada      
Goods CAD 76,600 CAD 383,300 130,000 355,000 355,000 
Services CAD 76,600 CAD 383,300 355,000 355,000 355,000 
Construction 
Services  CAD 8,500,000 CAD 12,200,000 5,000,000  5,000,000  5,000,000 
Honduras      
Goods US$70,079 US$350,396 --- --- --- 
Services US$70,079 US$350,396 --- --- --- 
Construction 
Services  US$7,804,000 US$11,213,223 --- --- --- 
Source: Free Trade Agreement between Canada and Ho nduras, Annex 17 and Canada's commitments under 
the revised GPA. 
5.33.  A number of exceptions to the application of Chapter 17 are listed including the acquisition 
or rental of land; non-contractual agreements such as grants, loans or equity infusions that a Party 
including a state enterprise provides; government provision of goods or services to a person or 
sub-national government; purchases for the direct purpose of providing foreign assistance; a purchase funded by financial assistance made by  a person or other entity, if the provision of 
assistance is subject to conditions inconsistent with the Government Procurement chapter; the 
procurement of a fiscal agency or deposit serv ice, liquidation and management service for a 
regulated financial institution, or a service related to the sale, redemption and distribution of a public debt; the procurement of a banking, financia l or specialized service related to the incurring 
of public indebtedness, or public debt manage ment; the hiring of a government employee or 
related employment measure; or a good or servic e component of a contract awarded by an entity 
not listed in Annexes 17.1 or 17.2. Disciplines on valuing the value of procurement to ascertain if it 
is covered by Chapter 17 are in paragraph 6 of Article 17.2. 
5.34.  Security and general exceptions are listed in Article 17.3. A number of general principles, 
including national treatment and non-discrimination, rules of origin, offsets, measures not specific 
to procurement, and information on the procurement process are laid out in Article 17.4. Rules on 
publication of notices including intended and planned procurements are contained in Article 17.6. Chapter 17 also contains provisions on the conditions for participation in procurement (Article 17.7); technical specifications (Article 17.8); tender documentation (Article 17.9); time 
limits for submission of tenders (Article 17.10); limited tendering (Article 17.11); awarding of 
contracts (Article 17.12); information on awarde d contracts (Article 17.13); non-disclosure of 
information (Article 17.14); and domestic review procedures (Article 17.15). 
5.35.  A Party may modify its coverage under Chapter 17, provided that it notifies the other Party 
within 30 days, and the other party does not object. For technical amendments to a Party's coverage or minor amendments to the Annexes, a Party need not provide a compensatory 
adjustment. For substantive modifications to coverage, a Party is obligated to propose an 
appropriate compensatory adjustment to maintain a level of coverage comparable to that existing prior to the modification.  
5.36.  If a Party enters into another international agreement that updates procurement procedures 
and practices, the Parties shall, at the request of either Party, consider whether they should 
modify Chapter 17.  WT/REG364/1 
 
- 40 - 
 
  5.37.  Canada is a party to the revised WTO Agreement on Government Procurement (GPA). 
Honduras is neither a party nor an observer to the GPA. 
5.10  Intellectual property rights 5.38.  The Agreement does not contain a specific chapter containing provisions on trade-related 
intellectual property rights. However, it refers to  intellectual property rights in certain sections. 
5.39.  For instance, in the context of the provisions relating to investment (Chapter 10), a Party 
may derogate from Articles 10.4 (National treatment), 10.5 (MFN treatment) and 10.7(1)(f) 
(prohibition to impose or enforce a requirement to transfer technology, a production process or 
other proprietary knowledge to a person in a Party's territory) in a manner that is consistent with the TRIPS Agreement and waivers to the TRIPS Ag reement adopted under Article IX of the WTO 
Agreement (Article 10.9). 
5.11  Other 
5.11.1  Competition Policy, Monopolies and State Enterprises 5.40.  Chapter 15 deals with competition policy, monopolies and state enterprises. The Parties 
shall adopt or maintain measures to proscribe anti-competitive business conduct and take 
appropriate action with respect to that conduct (Article 15.2). The Parties shall maintain their 
independence in developing and enforcing their respective competition laws and regulations and 
ensure that the measures adopted or maintained to protect or promote competition within their 
own markets by proscribing anti-competitive business conduct are consistent with the principles of transparency, non-discrimination and procedural fairness.  
5.41.  In relation to monopolies, the Agreement does not prevent a Party from designating or 
maintaining a monopoly (Article 15.3). However, where a Party intends to designate a monopoly 
and the designation may affect the interests of a person of the other Party, the designating Party shall, wherever possible, provide prior written noti fication of the designation to the other Party. 
Each Party shall ensure that a privately-owned monopoly that it designates or a government 
monopoly that it maintains or designates (i) acts in an manner that is consistent with the Parties' obligations under the Agreement; (ii) acts solely in accordance with commercial considerations, 
(iii) provides non-discriminatory treatment to covered investments
27, to goods of the other Party, 
and to service providers of the other Party in the pu rchase or sale of the monopoly good or service 
in the relevant market; and (iv) does not use its monopoly position to engage directly or indirectly, including through its dealings with its parent, subsidiaries or other enterprises with common 
ownership, in anticompetitive practices in a non-monopolized market in its territory that adversely 
affect a covered investment. The disciplines in the Agreement related to designated monopolies do not apply to procurement by governmental agencies of a good or services for governmental 
purposes as long as the good or service is not intended for commercial resale, or use in the 
production of a good or the provision of a service for commercial sale. 
5.42.  The Agreement does not prevent a Party from establishing or maintaining a state enterprise 
(Article 15.4). Each Party shall ensure that a state enterprise acts in a manner consistent with the 
Party's obligations under Chapters 10 (Investmen t) and 13 (Financial Services) of the Agreement 
whenever that enterprise exercises regulatory, administrative, or other governmental authority delegated to it by the Party. 
5.43.  Under the Agreement, the Parties shall endeavour to come to a mutual understanding on 
the interpretation and application of Chapter 15 and shall make every attempt through cooperation 
and discussions to resolve, to their mutual satisfaction, any matter that might affect its operation. 
5.44.  An investor may not have recourse to investor-state dispute settlement under Article 10.19 
(Claim by an Investor of a Party on its Own Beha lf) or Article 10.20 (Claim  by an Investor of a 
                                               
27 Under the Agreement, the term "covered investment" means, with respect to a Party, an investment 
in its territory of an investor of the other party existing  on the date of entry into force of the Agreement, or 
investments made or acquired thereafter.  WT/REG364/1 
 
- 41 - 
 
  Party on Behalf of an Enterprise) for a matter arising under Chapter 15.28 Country-specific 
definitions of state enterprises are contained in Annex 15.4. 
5.11.2  Electronic Commerce 5.45.  Chapter 16 of the Agreement applies to Electronic Commerce. The Parties commit to not 
apply a customs duty, fee or charge in connection with the import or expo rt of a digital product 
transmitted electronically. The Agreement however does not prevent a Party from imposing an internal tax or other internal charge not prohibited by the Agreement on a digital product 
transmitted electronically (Article 16.3). 
5.46.  The Parties recognize the importance of ma intaining and adopting transparent and effective 
measures to protect consumers from fraudulent or deceptive commercial practices in electronic commerce and agree to exchange information related to national approaches for the protection of 
consumers engaging in electronic commerce. They agree to promptly publish or make publicly 
available their laws, regulations, procedures and administrative rulings of general application that pertain to electronic commerce.  
5.47.  In the event of an inconsistency between Chapter 16 and another Chapter of the 
Agreement, the other Chapter prevails. 
5.11.3  Environment 
5.48.  Chapter 18 of the Agreement recalls that the Parties have set out their mutual obligations in 
the Agreement on Environmental Cooperation between Canada and the Republic of Honduras  (the 
Agreement on Environmental Cooperation) that addresses inter alia  the conservation, protection 
and improvement of the environment in the Parties' territories; non-derogation from domestic 
environmental law in order to encourage trade or investment; development of, compliance with 
and enforcement of domestic environmental law; transparency and public participation in environmental matters; and cooperation between the Parties to advance environmental issues of 
common interest. The Parties affirm (1) their respect for each Party's Constitution and recognize 
that each Party has sovereign rights to conserve and protect its environment, and (2) their environmental obligations under their domestic law, their right to establish their own levels of 
environmental protection under their domestic law, as well as their international obligations under 
multilateral environmental agreements. The Parties also affirm that the Agreement on Environmental Cooperation complements the Free Trade Agreement and that the two are mutually 
supportive.  
5.11.4  Labour 
5.49.  In Chapter 19 of the Agreement, the Parties affirm their obligations as members of the 
International Labour Organization (ILO) and their commitments to the ILO Declaration on 
Fundamental Principles and Rights at Work (1998). The Agreement also recalls that the Parties 
have set out their mutual obligations in the Agreement on Labour Cooperation between Canada 
and the Republic of Honduras  that addresses inter alia  a list of obligations, commitments, details 
of enforcement, institutional mechanisms, general consultations and an independent review panel.  
                                               
28 Except for matters arising under Article 15.3 (3)(a) or Article 15.4(2) of the Agreement. WT/REG364/1 
 
- 42 - 
 
  ANNEX 1 
1. Tables A1.1-A1.2 present the Parties' tariff elimination schedule by agricultural and 
non-agricultural products.  
2. In the case of Canada, the shar e of duty-free tariff lines applied on all products rose from 
66.5% to 96.3% upon the Agreement's entry into fo rce and the overall average applied tariff fell 
from 5.7% to 3.1% (Table A1.1). For agricultural goods, Honduran exporters faced in Canada an average tariff rate of 17.1% instead of 21.2%, and 0.1% instead of 2.5% for non-agricultural 
goods. Honduran exporters benefited from a relative margin of preference of 45.6% overall, 
19.3% for agricultural products and 96% for non-agri cultural goods. At the end of liberalization the 
share of duty free lines is expected to increase to 98.4% overall, 91.1% for agricultural products and 100% for non-agricultural products. 
Table A1.1 Canada: Indicators of MFN tariff ra tes and preferential rates for imports from 
Honduras
 
Origin of 
goods Year ALL PRODUCTS Agricultural productsa Non-agricultural products  
Average 
applied tariff Share 
of 
duty-
free 
tariff 
lines 
(%) Average 
applied tariff Share of 
duty-
free 
tariff 
lines 
(%) Average applied 
tariff Share 
of 
duty-
free 
tariff 
lines 
(%) Overall 
(%) 
On 
dutiable 
(%) 
Overall 
(%) 
On 
dutiable 
(%) 
Overall 
(%) 
On 
dutiable 
(%) 
MFN 2014 5.7 17.5 66.5 21.2 42.8 47.0 2.5 8.5 70.9 
Honduras 2014 3.1 92.6 96.3 17.1 116.4 83.7 0.1 10.0 99.1 
2015 3.1 92.7 96.4 16.9 118.2 84.1 0.0 5.0 99.1 
2016 3.0 219.2 98.4 16.7 219.2 91.0 0.0 0.0 100.0 
2017 3.0 221.5 98.4 16.7 221.5 91.0 0.0 0.0 100.0 
2018 3.0 221.5 98.4 16.7 221.5 91.0 0.0 0.0 100.0 
2019 3.0 221.5 98.4 16.7 221.5 91.0 0.0 0.0 100.0 
2020 3.0 223.8 98.4 16.7 223.8 91.1 0.0 0.0 100.0 
a WTO Definition. 
Note: Tariff lines subject to in-quota rates are excl uded in the computation; for the calculation of 
averages, specific rates are excluded and the ad valorem  parts of alternate rates are included. 
 Based on the HS 2012 nomenclature. 
Source:  WTO estimates based on data provided by Canada. 
 
3. In the case of Honduras, the share of duty-free tariff lines applied on all products rose from 
48% to 69.3% upon the Agreement's entry into fo rce and the overall average applied tariff fell 
from 5.9% to 3.3% (Table A1.2). For agricultural goods, Canadian exporters faced in Honduras an average tariff rate of 8.3% instead of 10.7%, and 2.4% instead of 5.1% for non-agricultural 
goods. Canadian exporters benefited from a relative  margin of preference of 44.1% overall, 22.4% 
for agricultural products and 52.9% for non- agricultural goods. Following ten years of 
implementation, the share of lines liberalized is ex pected to be 89.7% overall, 72% for agricultural 
products and 92.5% for non-agriculture. At the end of liberalization the share of duty free lines is 
expected to increase to 97.8% overall, 85% for agricultural products and 100% for non-agricultural products. WT/REG364/1 
 
- 43 - 
 
  Table A1.2 Honduras: Indicators of MFN tari ff rates and preferential rates for imports 
from Canada 
Origin 
of 
goods Year ALL PRODUCTS Agricultural productsa Non-agricultural products 
Average applied 
tariff Share 
of 
duty-
free 
tariff 
lines 
(%) Average applied 
tariff Share of 
duty-
free 
tariff 
lines 
(%) Average applied 
tariff Share of 
duty-
free 
tariff 
lines 
(%) Overall 
(%) On 
dutiable 
(%) Overall 
(%) On 
dutiable 
(%) Overall 
(%) On 
dutiable 
(%) 
MFN 2014 5.9 11.4 48.0 10.7 14.7 27.1 5.1 10.6 51.6 
Hondur
as 2014 3.3 10.8 69.3 8.3 14.6 43.0 2.4 9.3 73.9 
 2015 2.9 9.6 69.3 7.7 13.4 43.0 2.1 8.2 73.9 
 2016 2.6 8.5 69.3 7.0 12.2 43.0 1.8 7.0 73.9 
 2017 2.2 7.3 69.3 6.3 11.0 43.0 1.5 5.9 73.9 
 2018 1.9 8.2 77.0 5.6 13.7 59.1 1.2 6.2 80.1 
 2019 1.7 7.4 77.0 5.3 12.9 59.1 1.1 5.4 80.1 
 2020 1.5 6.5 77.0 5.0 12.2 59.1 0.9 4.4 80.1 
 2021 1.3 5.5 77.0 4.7 11.5 59.1 0.7 3.4 80.1 
 2022 1.1 4.6 77.0 4.4 10.7 59.1 0.5 2.4 80.1 
 2023 0.8 8.1 89.7 4.1 15.6 73.9 0.3 3.7 92.5 
 2024 0.8 7.5 89.7 4.0 15.2 73.9 0.2 2.9 92.5 
 2025 0.7 6.9 89.7 3.9 14.8 74.0 0.2 2.2 92.5 
 2026 0.6 6.3 89.7 3.7 14.4 74.0 0.1 1.5 92.5 
 2027 0.6 5.7 89.7 3.6 14.0 74.0 0.1 0.7 92.5 
 2028 0.5 23.6 97.8 3.5 23.6 85.0 0.0 0.0 100.0 
a WTO Definition. 
Note: 153 tariff lines under the Excluded category reflect the MFN 2014 duties. 
Based on the HS 2012 nomenclature. 
Source:  WTO estimates based on data provided by Honduras. 
4. Table A1.3 shows market access opportunities for Honduras' top 25 exported goods in 
Canada. These exports accounted for 72.5% of Honduras' global exports during 2010-20121 and 
involved 44 tariff lines in Canada's schedule, of  which 27 were already duty-free. The other 17 
lines were liberalized by Canada upon the Agreement's entry into force.  
Table A1.3 Canada: Market access opportuniti es under the agreement for Honduras's top 
25 exports to the world 
Honduras's top export products  
in 2010-2012 Access Conditions to Canada's import markets 
HS number and description of 
the product Share in 
global 
exports 
(%) MFN 2014 No. of duty 
free lines 
under the 
agreement Remain 
Dutiable Average 
MFN 
applied 
rate 
(%) No. of 
dutiable 
lines No. 
of 
duty 
free 
lines 2014  
090111 -- not decaffeinated 29.4 0.0  1   
854430 - ignition wiring sets and 
other wiring sets of a kind 
used in vehicles, aircraft 
or ships 7.0 0.0  1   
271112 -- propane 5.1 6.3 1 1 1  
151110 - crude oil 3.3 6.0 1  1  
                                               
1 Trade data for Honduras (2013) was not available in UN Comtrade. WT/REG364/1 
 
- 44 - 
 
  Honduras's top export products  
in 2010-2012 Access Conditions to Canada's import markets 
HS number and description of 
the product Share in 
global 
exports 
(%) MFN 2014 No. of duty 
free lines 
under the 
agreement Remain 
Dutiable Average 
MFN 
applied 
rate 
(%) No. of 
dutiable 
lines No. 
of 
duty 
free 
lines 2014  
710812 -- other unwrought forms 2.6 0.0  1   
080390 - other 2.4 0.0  1   
711291 -- of gold, including metal 
clad with gold but excluding sweepings containing other precious metals 2.4 0.0  1   
151190 - other 2.1 2.8 1 3 1  
080310 - plantains 1.7 0.0  1   
030617 -- other shrimps and 
prawns 1.7 0.0  1   
030611 -- rock lobster and other 
sea crawfish (palinurus spp., panulirus spp., jasus spp.) 1.6 5.0 1  1  
340119 -- other 1.6 6.5 1  1  
240210 - cigars, cheroots and 
cigarillos, containing tobacco 1.4 8.0 1  1  
080719 -- other 1.2 0.0  1   
481910 - cartons, boxes and 
cases, of corrugated paper or paperboard 1.1 0.0  1   
260800 Zinc ores and 
concentrates. 1.0 0.0  1   
030616 -- cold-water shrimps and 
prawns (pandalus spp., crangon crangon) 0.9 0.0  1   
282110 - iron oxides and 
hydroxides 0.85 0.0  1   
870899 -- other 0.8 3.3 5 4 5  
080430 - pineapples 0.8 0.0  1   
240220 - cigarettes containing 
tobacco 0.8 12.5 1  1  
760200 Aluminium waste and 
scrap. 0.8 0.0  1   
261610 - silver ores and 
concentrates 0.7 0.0  1   
870829 -- other 0.7 3.8 4 3 4  
170113 -- cane sugar specified in 
subheading note 2 to this chapter 0.6 0.0 1 1 1  
  Totals 72.5 2.7 17 27 17 0.0 
Note: 
 For the calculation of averages, specific rates are excluded and the ad valorem  parts of alternate 
rates are included. 
 Based on the HS 2012 nomenclature. 
Source WTO estimates based on data provided  by Canada and UNSD, Comtrade database. 
 
5. Table A1.4 shows market access opportunities for Canada's top 25 exported goods in 
Honduras. These exports accounted for 51.4% of Canada's global exports during 2011-2013 and 
involved 67 tariff lines in Honduras' schedule, of which 33 were already duty-free. By the end of 
the liberalization period in 2028, all 34 lines will be liberalized by Honduras.  WT/REG364/1 
 
- 45 - 
 
  Table A1.4 Honduras: Market access opportun ities under the agreement for Canada's top 
25 exports to the world 
Canada's top export products in 2011-2013  Access Conditions to Honduras's import markets 
HS number and description of the 
product Share 
in 
global 
exports 
(%) MFN 2014 No. of duty free 
lines under the 
agreement 
Remain 
Dutiable  
Average 
MFN 
applied 
rate (%) No. of 
dutiable 
lines No. of 
duty 
free 
lines 
2014 
2018 
2023 
2028 
270900 Petroleum oils and oils 
obtained from bituminous minerals, crude. 16.9 0.0   2           
870324 -- of a cylinder capacity 
exceeding 3,000 cc 6.2 15.0 5       5     
870323 -- of a cylinder capacity 
exceeding 1,500 cc but not 
exceeding 3,000 cc 3.7 15.0 10       10     
710812 -- other unwrought forms 3.6 5.0 1       1     
271121 -- natural gas 2.5 0.0   1           
271019 -- other 2.1 3.1 5 8     5     
270112 -- bituminous coal 1.5 5.0 1     1       
310420 - potassium chloride 1.4 0.0   1           
440710 - coniferous 1.4 5.0 1         1   
271012 -- light oils and 
preparations 1.4 2.9 4 3     4     
120510 - low erucic acid rape or 
colza seeds 1.1 0.0   2           
470321 -- coniferous 0.9 0.0   1           
100199 -- other 0.9 0.0   1           
880240 - aeroplanes and other 
aircraft, of an unladen 
weight exceeding 15,000 
kg 0.8 0.0   1           
300490 - other 0.7 0.0   6           
271020 - petroleum oils and oils 
obtained from bituminous 
minerals (other than 
crude) and preparations 
not elsewhere specified or 
included 0.7 6.3 4       4     
760110 - aluminium, not alloyed 0.7 0.0   1           
260300 Copper ores and 
concentrates. 0.7 0.0   1           
870829 -- other 0.7 5.0 2   2         
760120 - aluminium alloys 0.6 0.0   1           
870899 -- other 0.6 5.0 1   1         
750210 - nickel, not alloyed 0.6 0.0   1           
480100 Newsprint, in rolls or 
sheets. 0.6 0.0   1           
840734 -- of a cylinder capacity 
exceeding 1,000 cc 0.5 0.0   1           
260112 -- agglomerated 0.5 0.0   1           
Total of above 51.4 5.1 34 33 3 1 29 1 0 
Note: 
 Based on the HS 2012 nomenclature. 
Source: WTO estimates based on data provided  by Honduras and UNSD, Comtrade database. WT/REG364/1 
 
- 46 - 
 
  ANNEX 2 
1. Honduras offers duty-free tariff access under  TRQ for the originating goods in Annex 
Table A2.1. 
Table A2.1 Honduras commitments under TRQs under the Agreement  
Product Tariff 
lines No. 
of 
years Quantity Base rate for 
elimination of 
out-of-quota 
tariff Out of quota tariff 
Prime 
and AAA beef 02012000A 
02013000A 02022000A 02023000A 15 300 MT increasing 
by 15 MT/year. Unlimited as of year 15.  Duties to be removed in 15 
equal annual stages and duty-free as of year 15. 
AA and A 
beef 02012000B 
02013000B 
02022000B 
02023000B 15 200 MT increasing 
by 10 MT/year. 
Unlimited as of year 
15.  
Duties remain at base rates 
for years 1-6. In years 7-11, 
duties reduced by 8% of the 
base rate annually. In years 
12-15, 15% of base rate 
annual reduction. Duty-free 
as of year 15. Pork 02031100 
02031200 02031900 02032100 02032200 02032900 15 1,644 MT 
increasing by 82 MT/year. Unlimited as of year 15.  
 
2. Honduras permits sugar to be imported from Ca nada duty-free up to the quantities specified 
in Table A2.2, provided that Canada meets the "net exporter" condition. 
Table A2.2 Honduras' commitments on sugar - with net exporter condition  
Product Tariff lines No. of years Quantity 
Sugar 17019100 
17019900 15 1,000 MT increasing by 107 MT/year. In 
year 15 and following years, 2,500 MT. 
Table A2.3 Canada's commitments on sugar 
Product Tariff lines No. of years Quantity 
Sugar 17019100 
17019900 17029011 17029012 17029013 17029014 17029015 17029016 17029017 17029018 
17029020 
17029030 17029060 15 2,500 MT increasing by 178/179 
MT/year. In year 15 and following years, 5,000 MT. 
 
__________