WORLD TRADE  
ORGANIZATION  WT/REG164/8 
26 November 2007 
 
 (07-5140) 
Committee on Regional Trade Agreements Original:   English 
  
 
ASSOCIATION AGREEMENT BETWEEN THE 
EUROPEAN COMMUNITIES AND CHILE, SERVICES 
 
Questions and Replies
 
 
 
 The following communication, dated 20 November 2007, is being circulated at the request of 
the delegations of the European Communities and Chile.  
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Questions from the Delegation of the United States
 
 
Para. 18  General Provisions on Trade in Services 
 
1. Audiovisual services are excluded from the general provisions of the Association 
Agreement (Article 95:2). 
• How do Parties to the Agreement define audi ovisual services?  Since audiovisual services 
can be quite broadly defined, and are no doubt  actively traded between the Parties, what 
is the basis for this exclusion? 
 
• The positive-list approach in this Agreement allows Parties to exclude sectors from its 
market access and national treatment oblig ations, yet audiovisual services have been 
excluded from the Agreement altogether.  Wh y did the Parties choose this more drastic 
approach?   
 
• If the intention was to exclude this sector from obligations other than market access and 
national treatment, does this not mean that the Association Agreement provides less 
comprehensive coverage than the GATS? 
 
In fact, audiovisual services are only excluded from the scope of Chapter I of Title III (Trade in Services and Establishment) and not from the gene ral provisions of the Association Agreement. In 
reality, there are some relevant provisions to be  found in the Agreement (see Title III: "Culture, 
education and audio-visual" and in particular in  Article 39) which are relevant for audiovisual 
services.  
 Despite the exclusion of audio-visual services fro m Chapter I of Title III (Trade in Services and 
Establishment), the agreement fulfils the criteria of GATS Article V, in particular with regard to the 
substantial sectoral coverage and the elimin ation of substantially all discrimination. 
 
   WT/REG164/8 
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  Para. 49  Telecommunications Serv ice (Liberalization Commitments) 
 
2. Article 109(a) of the Agreement states that commitments in teleco mmunications services 
do not cover “the economic activity consisting of content provision.” What does this exclusion 
mean?  Since audiovisual services are already ex cluded from the Agreement, what remains of 
“content” that can be excluded? 
The statement "audiovisual services are already excl uded from the Agreement" is factually incorrect, 
see our answer above.   In addition to audiovisual services, there are many services which can be provided over 
telecommunications networks, and which include c ontent elements. For instance, financial services, 
such as e-banking for the provision of information on accounts or the issuance of transfer orders, 
securities brokerage or  information services such as providing news, location-based information, etc. 
These services do not fall under the definition of a telecommunications service but they rather constitute content services. 
 
 
Para. 83  Exceptions  
 
3. Article 135:2 states that the provisions of Ti tle III (Trade in Services and Establishment) 
do not apply to activities “connected, even occasi onally, with the exercise of official authority.” 
• What does this exception mean?  Could not near ly all services be “occasionally connected” 
to the exercise of official authority?   
 
• Because this language appears to be more ex pansive than the GATS exclusion for services 
supplied in the exercise of governmental authorit y, does this not mean that the Association 
Agreement provides less comprehensive coverage of services than the GATS?  
 This exception transposes into th e Agreement the exception provided  for in Article 45 of the EC 
Treaty for the intra-EU freedoms of establishment and of services supply. According to the case law 
of the European Court of Justice, this exception has to be interpreted narrowly. It can cover only those 
specific activities and functions which imply the exercise of the Authority; a whole profession can be excluded only if the entire activity is dedicated to the ex ercise of official authority, or the part that is 
dedicated to the exercise of the public authority is inseparable from the rest. 
 
The exception may possibly qualify certain new specif ic commitments undertaken in the context of 
the Association Agreement but can in no case reduce the sectoral coverage of the services and financial services titles, which, as indicated in Artic les 95 and 116, include trade in all services sectors 
except those specified under these two articles.  
 
 
Questions from the Delegation of Japan
 
 
With respect to Paragraph 84 of the Factual Presentations (WT/REG164/7). 
 
4. This paragraph mentions that the provisions on government procurement are based on 
the provisions of the WTO Agreement on Govern ment Procurement (GPA).  After entry into 
force of the amendment of GPA or new agreement on GPA, do the parties plan to amend provisions regarding this accordingly?   WT/REG164/8 
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  Pending agreement on the amended or new GPA, this issue has not yet been discussed between the 
Parties. 
 
5. Have the parties already held an "Associat ion Committee"?  If so, could the parties 
inform us of the outcome of the meetings? 
The Association Committee has met 4 times, on a regular annual basis, the most recent being in 
November 2006. The 5th meeting is scheduled in December 2007.  In these meetings the Association Committee has re gularly reviewed the overall implementation of 
the Agreement and the parties have exchanged view s on various subjects of mutual interest in all 
areas covered by the Agreement. The Association Committee has also prepared Decisions to be 
adopted by the Association Council, and in some cas es, as provided for by the Agreement, it has also 
adopted decisions (for example a d ecision on the list of arbitrators for DS, as provided for in art. 185.2 
of the Association Agreement).  
 
Questions from the Delegation of Australia
 
 
Government Procurement  
 6. Could the Parties elaborate on the intention of Article 144 on selective tendering?  We 
are interested in hearing from the parties on the relationship between these provisions and 
Article 151 on negotiations, which would appear  to effectively provide another avenue for 
selective tendering. 
Selective tendering and procurement through a nego tiated procedure offer two distinct methods for 
awarding a public contract. A major difference between these two is that in selective tendering 
procedures, all specifications are established at the beginning of the procedure, and no substantive 
negotiations between bidder and proc uring entity are allowed. In contrast, in negotiated procedures, 
some specifications may be further developed in  the course of transparent and non-discriminatory 
negotiations between bidders and pr ocuring entity. The negotiated pr ocedure is thus particularly 
adequate for highly complex projects, such as for exam ple the construction of an airport. It should be 
noted that the facility to use selective tendering is  optional, and Chile for one does not use selective 
tendering nor allows negotiations betw een bidders and procuring entities. 
  
Institutional Framework 
 
7. Could the Parties provide an update on the frequency and timing of meetings of the 
various bodies detailed under paragraphs  96-97 of the Factual Presentation? 
The Association Council (art. 3 of the Association Ag reement) has met 3 times, the most recent being 
in July 2007. Its Rules of Procedure have b een established in Decision 1/2003 of 27 March 2003, 
which also establishes the Rules of Procedure of the Association Committee and of the Special 
Committees. 
 
The Association Parliamentary Committee (art. 9 of the AA) has met 7 times, the most recent being in October 2007.  The Joint Consultative Committee (art. 10 of the AA) has not yet met, but there has been one joint 
meeting with representatives of civil society (art. 11 of the AA) in November 2006. WT/REG164/8 
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  The Association Committee has met 4 times, on a regular annual basis, the most recent being in 
November 2006. The 5th meeting is scheduled in December 2007. The Special Committees on Customs Cooperation and Rules of Origin (art. 81 of the AA) and on Standards, Technical Regulations and Conformity Assessments (art. 88 of the AA), the Joint Management Committee for Sanitary and Phytosanitary  Matters (art. 89 of the AA and Annex IV, art. 
16), and the Joint Committees on Wines (art. 90 of th e AA and Annex V, art. 30) and on Spirits (art. 
90 of the AA and Annex VI, art. 17) have all met as requested and agreed by the parties, generally on 
an annual basis.  The Special Committee on Financial Services (art. 127 of the AA) has not yet met. 
 
 
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