WORLD TRADE  
ORGANIZATION  WT/REG179/4 
1 June 2007 
 
 (07-2264) 
Committee on Regional Trade Agreements  
  
 
 
FACTUAL PRESENTATION  
Free Trade Agreement 
Between 
the EFTA States and Chile 
(Services) 
Report by the Secretariat 
 
 
This report, prepared for the examinati on of the Free Trade Agreement between the 
EFTA States and Chile has been drawn up by the WTO Secretariat on its own 
responsibility.  The report was requested by the Parties and prepared in consultation 
with them in accordance with the Guide lines on Procedures to Improve and Facilitate 
the Examination Process (document WT/REG/W/15/Add.1).   
Any technical questions arising from this report may be addressed to 
Ms. Jo-Ann Crawford (tel:  +41 22 739 5422). 
 
  WT/REG179/4 
 Page iii 
 
 
  TABLE OF CONTENTS 
Page 
 
I. TRADE ENVIRONMENT 1  
A. C HILE 1 
B. I CELAND  2 
C. N ORWAY  4 
D. S WITZERLAND  7 
II. TREATY CHARACTER ISTIC ELEMENTS 9  
A. B ACKGROUND INFORMATION  9 
B. S COPE AND DEFINITIONS  10 
C. D ENIAL OF BENEFITS  11 
D. G ENERAL PROVISIONS ON TRADE IN SERVICES  11 
1. Market Access 11  
2. National Treatment and MFN 11  
3. Movement of Natural Persons 11  
4. Recognition 11  
E. L IBERALIZATION COMMITMENTS  12 
1. Chile 12  
(a) Horizontal commitments 12 
(b) Sector-specific commitments 13 
2. Iceland 14  
3. Liechtenstein 14  
4. Norway 14  
(a) Horizontal commitments 14 
(b) Sector-specific commitments 15 
5. Switzerland 15  
F. R EGULATORY PROVISIONS  15 
1. Provisions specific to trade in services 15  
(a) Domestic regulation 15 
(b) Recognition 15 (c) Subsidies 16 
2. Provisions common to other areas of the Agreement 16  
(a) Payments and capital movements 16 
(b) Transparency 16 
G. S
ECTOR -SPECIFIC PROVISIONS  16 
1. Telecommunications services 16  
2. Financial services 17  
H. G ENERAL PROVISIONS  17 
1. Exceptions 17  
(a) Exceptions specific to trade in services 17 
  WT/REG179/4 
 Page 1 
 
 
  I. TRADE ENVIRONMENT 
A. CHILE 
1. In 2005 Chile ranked 46th and 47th in the world in terms of global imports and exports of 
commercial services, respectively.1  Chile's commercial services imports amounted to US$7.6 billion, 
representing 0.32 per cent of world imports, while exports amounted to US$7.1 billion, representing 
0.29 per cent of world exports.  Services exports represent 14.9 per cent of total exports and services 
imports for 18.9 per cent of total imports. 
2. Chart I.1 (Chile) shows the evolution of Chilean commercial services exports and imports for 
the period 2000-2005.  Exports to the world increased 76 per cent in the period 2000-2005, experiencing a low increase in the first three years an d a much faster increase in the latter two.  Total 
imports from the world followed a similar, but not identical pattern, increasing 62 per cent over the 
same period.  The increase was slight in the first two years, accelerated in 2003 and 2004, and fell in 
2005.  Chile has run a constant trade deficit in  commercial services over the period surveyed.
2 
01 0002 0003 0004 0005 0006 0007 0008 000
2000 2001 2002 2003 2004 200501 0002 0003 0004 0005 0006 0007 0008 000
2000 2001 2002 2003 2004 2005Chart I.1 (Chile)
Chile, total commercial services trade, 2000-2005
Exports Imports
Transportation services Insurance services Other business services
Travel services Financial services
Communication services Computer and information servicesPersonal, cultural and 
recreational services
Source: Chilean Central Bank.Construction services Royalties and license fees Government servicesUS$ million
 
3. The composition of exports has remained fairly st able over the last six years.  The three most 
important categories are transportation, travel a nd other business services, which, in 2005, accounted 
for over 80 per cent of total exports;  transportation services represent by far the largest share, with 58 per cent of total exports.  The same three categor ies account for a similar share in terms of total 
imports.  Transportation and travel services accounted for a growing share of total imports in 
2004-2005, while communications services remained fairly constant over the period surveyed.   
                                                     
 
1 WTO Trade Profiles. 
2 Chilean Central Bank. WT/REG179/4 
Page 2  
 
  4. Chile's investment position is depicted in Char t I.2 (Chile) which shows inward and outward 
total and direct investment stocks with the world for the years 2001-2005.  Total inward investment 
stock grew 52 per cent over the period, while total outward investment stocks grew 93 per cent over 
the same period.  In 2005, inward foreign direct investment stocks accounted for US$73.6 billion, or 
60 per cent of total inward investment stocks.
3   
0102030405060708090100110120130
2001 2002 2003 2004 20050102030405060708090100110120130
2001 2002 2003 2004 2005Chart I.2 (Chile)
Chile inward and outward foreign investment stock from world, 2001-05
Inward Outward
Total foreign investment Foreign direct investment
Source: Central Bank of ChileUS$ billion
 
B. ICELAND  
5. In 2005 Iceland ranked 71st and 79th in the world in terms of global imports and exports of 
commercial services.  Iceland's commercial servic es imports amounted to US$2.5 billion, representing 
0.1 per cent of world imports, while exports amount ed to US$1.9 billion, representing 0.08 per cent of 
world exports.  Services exports represent 38.3 pe r cent of total exports and services imports for 
33.7 per cent of total imports. 
6. Chart I.1 (Iceland) shows the evolution of I celand's commercial services exports and imports 
for the period 2000-2005.  Exports to the world increased 92 per cent in the period 2000-2005, 
experiencing a low increase in the first three years an d a much faster increase in the latter two.  Total 
imports from the world increased by 119 per cent during the same period.  In five of the six years surveyed, Iceland has run a trade deficit  in commercial services. 
7. Transportation services, travel services and other business services are the three largest 
categories of total commercial services exports for the years 2000-2005:  transportation services 
account for by far the largest share, with 52 per ce nt of total exports.  The same three categories 
                                                     
 
3 Chilean Central Bank.  WT/REG179/4 
 Page 3 
 
 
  account for a similar share in terms of total commercial services imports, though transportation and 
travel services have a similar weight. 
0,00,51,01,52,02,53,0
2000 2001 2002 2003 2004 20050,00,51,01,52,02,53,0
2000 2001 2002 2003 2004 2005Chart I.1 (Iceland)
Iceland, total commercial services trade, 2000-2005
Exports Imports
Transportation services Insurance services Other business services
Travel services Financial services
Communication services Computer and information servicesPersonal, cultural and 
recreational services
Source: IMF, BOP CD-Rom.Construction services Royalties and license fees Government servicesUS$ Billion
 
8. Iceland's investment position is depicted in Ch art I.2 (Iceland).  Total inward investment 
stocks have increased fivefold over the period, while  total outward investment stocks have increased 
tenfold.4  In 2005, inward foreign direct investment  stocks accounted for US$4.5 billion, or about 
eight per cent of total inward investment stocks, while outward foreign direct investment stocks 
accounted for US$10 billion, or 25 per cent of total outward investment stocks for the same year.  
 
                                                      
4 This can be explained in part by a 35 per cent depreciation in the US dollar relative to the Icelandic 
Kronor over the reference period. WT/REG179/4 
Page 4  
 
  0102030405060
2001 2002 2003 2004 2005051015202530354045
2001 2002 2003 2004 2005Chart I.2 (Iceland)
Iceland inward and outward foreign in vestment stock from world, 2001-05
Inward Outward
Total foreign investment Foreign direct investment
Source: Central Bank of IcelandUS$ billion
 
 
C. NORWAY  
9. In 2005 Norway ranked 24th and 23rd in the world in terms of global imports and exports of 
commercial services.  Norway's commercial services imports amounted to US$27.2 billion, representing 1.16 per cent of world imports, while  exports amounted to US$28.5 billion, representing 
1.18 per cent of world exports.  Services exports represent 21.6 per cent of total exports and services 
imports for 32.9 per cent of total imports. 
10. Chart I.1 (Norway) shows the evolution of No rway's commercial services exports and imports 
for the period 2000-2005.  Exports to the world increased 70 per cent in the period 2000-2005, experiencing a gradual increase in the first three years and a much faster increase in the latter two.  
Total imports from the world increased by 104 per cent during the same period.  In five years, 
Norway has moved from a small trade surplu s in services to a small trade deficit. 
11. Transportation, other business services and trav el services are the three largest categories by 
value, accounting for 87 per cent of total commerc ial services exports, with transportation accounting 
for 53 per cent of total commercial services exports.  The same three categories account for the largest 
share of commercial services imports;  as of 2004, travel services accounted  for the largest share, 
overtaking transportation services.  Imports of fi nancial services, and computer and information 
services increased at steep rate over the period, though from a small base. 
   WT/REG179/4 
 Page 5 
 
 
  05101520253035
2000 2001 2002 2003 2004 200505101520253035
2000 2001 2002 2003 2004 2005Chart I.1 (Norway)
Norway, total commercial services trade, 2000-2005
Exports Imports
Transportation services Insurance services Other business services
Travel services Financial services
Communication services Computer and information servicesPersonal, cultural and 
recreational services
Source: IMF, BOP CD-Rom.Construction services Royalties and license fees Government servicesUS$ Billion
 
12. Norway's foreign direct investment position is depicted in Chart I.2 (Norway).5  I n  2 0 0 4 ,  
inward foreign direct investment stocks accounted for US$68.2 billion, while outward foreign direct 
investment stocks accounted for US$80.6 billion. 
13. Norway's foreign direct investment position with  Chile is depicted in Chart I.3 (Norway).  
Norway's stock of foreign direct investment in Chile has remained fairly constant over the period 
2001-2004, averaging about US$700 million. 
 
                                                      
5 Over the reference period, the US dollar depreciated 27 per cent relative to the Norwegian Kronor.  
Figures for total inward and outward investment stocks were not available. WT/REG179/4 
Page 6  
 
  0102030405060708090
2001 2002 2003 20040102030405060708090
2001 2002 2003 2004Chart I.2 (Norway)
Norway inward and outward foreign direct  investment stock from world, 2001-04 
Inward Outward
Source: Statistics NorwayUS$ billion
 
0100200300400500600700800
2001 2002 2003 2004Chart I.3 (Norway)
Norway outward foreign direct invest ment stock with Chile, 2001-04 
Outward 
Source: Statistics NorwayUS$ million
 
  WT/REG179/4 
 Page 7 
 
 
  D. SWITZERLAND  
14. In 2005 Switzerland and Liechtenste in taken together ranked 25th and 17th in the world in 
terms of global imports and exports of commercial services.  Their commercial services imports 
amounted to US$25.2 billion, representing 1.07 per cent of world imports, while exports amounted to 
US$44 billion, representing 1.82 per cent of world e xports.  Services exports represent 25.1 per cent 
of total exports and services imports for 16.6 per cent of total imports.   
15. Exports to the world increased 58 per cent in  the period 2000-2005, with a decrease in 2001 
followed by steady growth in the following four years.  Total imports from the world increased 
69 per cent over the same period 
16. Chart I.1 (Switzerland) shows the evolution of Switzerland's commercial services exports and 
imports for the years 2001-2005.6  Exports to the world increased 58 per cent in the period 2000-2005, 
decreasing slightly in 2001 from 2000 then increasing in  the next four years.  Total imports from the 
world increased by 69 per cent during the same peri od.  Switzerland has run a significant trade surplus 
in services over the period surveyed.   
05101520253035404550
2000 2001 2002 2003 2004 2005051015202530
2000 2001 2002 2003 2004 2005Chart I.1 (Switzerland)
Switzerland, total commercial services trade, 2000-2005
Exports Imports
Transportation services Insurance services Other business services
Travel services Financial services
Communication services Computer and information servicesPersonal, cultural and 
recreational services
Note: 
Source:No data for construction services, computer and information services, and royalties and license fees.
IMF, BOP CD-Rom.Construction services Royalties and license fees Government servicesUS$ Billion
 
17. Financial services, other business services and travel services are the three largest categories 
by value, accounting for 76 per cent of total commerc ial services exports in 2005;  exports of other 
business services have increased at the fastest rate , becoming the largest export category in 2004 and 
2005.  In terms of imports of commercial services,  transportation services, travel services and other 
business services are the three largest categories, acc ounting for 90 per cent of total imports.  Imports 
                                                      
6 Liechtenstein's figures are partially  included in Switzerland's BOP figures. WT/REG179/4 
Page 8  
 
  of other business services increased at the fastes t rate over the period followed by travel services, 
while imports of transportation services have remained fairly constant.   
18. Switzerland's investment position is depicted in Chart I.2 (Switzerland).
7  Switzerland's 
inward stock of foreign direct investment in creased by 102 per cent over the period 2001-2005, while 
its stock of outward foreign direct investment in creased by 79 per cent over the same period.   
19. Capital outflows of Swiss direct investment  were 30.9 billion CHF in 2001 and grew to 
67.6 billion CHF in 2005, with an annual average of 33 billion CHF over the five year period from 2001 to 2005. 
0100200300400500600700800900
2001 2002 2003 2004 200502004006008001,0001,2001,400
2001 2002 2003 2004 2005Chart I.2 (Switzerland)
Switzerland inward and outward foreign investment stock from world, 2001-05
Inward Outward
Total foreign investment Foreign direct investment
Source: Swiss National BankUS$ billion
 
 
20. Switzerland's foreign direct investment position with Chile is depicted in Chart I.3 
(Switzerland).  Switzerland's stock of foreign direct investment in Chile has fluctuated over the period 
2001-2005, averaging about US$560 million. 
21. Capital outflows of Swiss direct investme nt in Chile were negative in 2001 at 
163 CHF million and grew to positive 92 CHF million in 2005, with an annual average of negative 
12.4 CHF million over the five year period in 2001 to 2005. 
 
                                                      
7 No separate investment figures for Liechtenstein were available.  WT/REG179/4 
 Page 9 
 
 
  01002003004005006007008009001,000
2001 2002 2003 2004 2005Chart I.3 (Switzerland)
Switzerland outward foreign direct in vestment stock with Chile, 2001-05
Outward 
Source: Swiss National BankUS$ million
 
II. TREATY CHARACTERISTIC ELEMENTS 
A. BACKGROUND INFORMATION  
22. The Free Trade Agreement between the EFTA States and Chile was signed by the four 
EFTA States – namely Iceland, Liechtenstein, Norw ay and Switzerland – and Chile on 26 June 2003.  
The Agreement entered into force for all Parti es on 1 December 2004, following their ratification, 
acceptance or approval.  On the EFTA side, the FTA was ratified by Norway on 19 December 2003, 
by Switzerland on 22 December 2003, by Liechte nstein on 6 February 2 004 and by Iceland on 
7 May 2004. In Chile, it was promulgated by Decr ee N° 262 of the Minister of Foreign Affairs on 
24 November 2004.  Despite the possibility provi ded for in Article 106.5, it was not applied 
provisionally by any of the EFTA States.  Unless otherwise provided for in the Agreement, its 
provisions apply to the trade and economic relations between the i ndividual EFTA States on one side 
(referred to hereafter as one of the two Parties), a nd Chile on the other side (referred to hereafter as 
the other Party), but not to the trade relations between the EFTA States.  
23. The goods and services aspects of the Agreement were notified to the WTO by its Parties on 
10 December 2004.  The Parties jointly notified the services aspects of the Agreement under GATS Article V (S/C/N/309).  On 9 February 2005 , the Council for Trade in Services referred the 
Agreement to the CRTA for examination (S/C/M/77).
8  The text of the Agreement was circulated to 
                                                      
8 In the goods area, the Agreem ent was notified under Article XXIV of the GATT 1994 and the 
Understanding on the Interpretation of Article XXIV  of GATT 1994 as estab lishing a free-trade area 
(WT/REG179/N/1).  The terms of reference for the exam ination of the Agreement we re adopted by the Council 
for Trade in Goods on 11 March 2005 (WT/REG179/2).  A factual presentation has been prepared by the 
Secretariat and distributed as document WT/REG179/3.  General provisions of the Agreement, described in 
WT/REG179/3 are not duplicated in this document. WT/REG179/4 
Page 10  
 
  the Members as document WT/REG179/1, and is also available, together with its Annexes, on the 
Parties' official Websites: 
• http://secretariat.efta.int/Web/ExternalRelations/PartnerCountries/Chile
 
• http://www.direcon.cl/index.php?accion=tlc_efta_acuerdo_vd  
24. The Agreement is composed of 12 Chapters, as follows: 
Box I.1:  Preamble  
 Chapter I – Initial Provisions 
 Chapter II – Trade in Goods  Chapter III – Trade in Se rvices and Establishment 
  Section I – Trade in Services 
 Section II – Establishment  Section III – Payments and Capital Movements 
 Section IV – Common Provisions 
 Chapter IV – Protection of Intellectual Property 
 Chapter V– Government Procurement 
 Chapter VI –Competition Policy 
 Chapter VII –Subsidies 
 Chapter VIII – Transparency 
 Chapter IX – Administration of the Agreement  Chapter X– Dispute Settlement 
 Chapter XI – General Exceptions 
 Chapter XII – Final Provisions
 
 
25. The provisions relating specifically to trade in services are found in Chapter III and 
Annexes  III and IX.  Annex VIII contains the sche dules of specific commitments of each country and 
Annex IX contains specific provisions on telecommunications services. 
26. No overall implementation period is explicitly st ated in the Agreement.  The commitments 
undertaken in the services sector are therefore bi nding from the date of entry into force.  
B. SCOPE AND DEFINITIONS  
27. Article 22 defines the coverage relating to tr ade in services as applying to "measures affecting 
trade in services taken by central, regional or local governments and authorities as well as by non-governmental bodies in the exercise of powers delegated by central, regional or local governments or authorities".  The Agreement does not apply to air transport services, with the exception of aircraft repair and maintenance ser vices, the selling and marketing of air transport 
services, and computer reservation system services (Article 22.2).  The Parties have made no 
commitments in financial services, but have committe d to "consider the inclus ion of financial services 
in" the services chapter two years after the entry into force of the agreement (Article 45).  
Government procurement of services is dealt with  in Chapter V of the Agreement (Article 22). 
According to Chapter V, the Parties agreed to  open up their government procurement markets on a 
reciprocal and non-discriminatory basis for the ser vices listed in Annex XIII and XIV. According to 
Article 28, the obligations on govern ment procurement do not apply to contracts for arbitration and 
conciliation services, certain research and development services, and financial services.   
28. The definitions adopted in the Agreement (Ar ticle 23) are modelled on those contained in 
GATS Articles I and XXVIII.  Trad e in services is defined as the supply of a service through the 
four modes of supply identified in the GATS, a nd "services" includes any service in any sector except 
services supplied in the exercise of governmental author ity.  Investment in service sectors is regulated  WT/REG179/4 
 Page 11 
 
 
  by the provisions on trade in services, mode 3.  Ch apter III contains a section on establishment, which 
explicitly excludes establishment in service sectors from its scope of application (Article 32).  
C. DENIAL OF BENEFITS  
29. The Agreement does not contain any provisions on denial of benefits; it provides that a 
"juridical person of a Party" who may benefit fro m the Agreement should be  either constituted under 
the laws of Chile or an EFTA State and engaged in  "substantive business operations" in that state; or, 
in the case of services provided though commercial pr esence, if it is owned or controlled by a natural 
or juridical person of that Party.   
D. GENERAL PROVISIONS ON TRADE IN SERVICES  
30. The Agreement follows the GATS model for sche duling commitments, i.e., a "positive list" of 
sectors for which commitments are undertaken, coupled  with a negative list of remaining limitations 
on market access and national treatment.  Therefor e, no concessions are made for non-listed sectors or 
sub-sectors.   
1. Market Access 
31. The Chapter contains a market access pr ovision (Article 25), which is modelled on 
GATS Article XVI, and which binds the Parties to grant each other treatment no less favourable than 
that provided for in the schedules of commitments.    
2. National Treatment and MFN   
32. Article 26 contains a national treatment ob ligation similar to the one contained in 
GATS Article XVII.   
33. Article 24 provides that the rights and obligations of the Parties with respect to most favoured 
nation treatment are governed by the GATS.  The Agreement therefore incorporates by reference the 
lists of MFN exemptions agreed at the end of the Uruguay Round.  The Agreement also requires a Party entering into an economic integration agr eement with a non-Party to afford other Parties 
"adequate opportunity" to negotiate , upon request, on a mutually advantageous basis, the benefits 
negotiated in that Agreement. 
3. Movement of Natural Persons 
34. Article 30 states that natural persons covered by a Party's specific commitments are allowed 
to supply a service in accordance with the terms of  these commitments.  This article also re-states 
GATS disciplines on the movement of natural persons, recognizing a Party's right to regulate the entry 
of natural persons in its territory and excluding  measures relating to nationality, residence or 
employment on a permanent basis. 
4. Recognition 
35. Article 29 provides for mechanisms to promote mu tual recognition of the fulfilment of criteria 
relating to authorization, licensing, accreditation, operation and certification of service suppliers, in 
particular professional services.  The Parties agre e to encourage the relevant bodies to formulate 
recommendations, which are to be reviewed by th e Joint Committee.  If approved by the Joint 
Committee, these recommendations will be implemente d through an agreement that complies with the 
WTO Agreement and GATS Article VII.   WT/REG179/4 
Page 12  
 
  36. If a Party recognises the education, licenses or certifications granted in the territory of a 
non-Party, either by agreement or autonomously, the Party must offer the other Party the opportunity to negotiate a similar agreement.  The implementa tion of Article 29 will be reviewed by the Joint 
Committee at least every three years. 
E. L
IBERALIZATION COMMITMENTS  
37. The schedules of commitments of the Parties ar e contained in Annex VIII;  they are modelled 
on the GATS schedules – i.e. a four-column format to  indicate the sectoral coverage of commitments, 
the limitations on market access, the limita tions on national treatment, and the additional 
commitments.  As in the GATS, the schedules di stinguish between sector-specific and horizontal 
commitments;  and limitations are entered with respect to each mode of supply.   
38. The Parties undertake to review their schedules at  least every three years, with a view to 
reducing or eliminating substantially a ll remaining discrimination (Article 27).9 
1. Chile 
39. Under the Agreement, Chile undertakes commitm ents in nine of the 12 services sectors 
identified in the Services Sectoral Classification List;10  Chile did not undertake commitments for 
some professional services (e.g. medical and dental services), and for other sectors such as 
audiovisual services,  financial services, health and social services, and other services not included elsewhere.  Additional horizontal limitations have been added (com pared to the GATS), but a slight 
liberalization of the requirement to employ 85 per cent Chileans in small companies has been 
introduced.  Under the Agreement, Chile has made  commitments which exceed those made in the 
GATS in the following:  legal services;  veterinary services;  services provided by medical support 
staff;  computer and related services;  research and development services;  real estate services;  other 
business services;  postal and courier services;  constr uction services and related engineered services;  
distribution services;  environmental services;  recreational, cultural and sporting services;  and transport services.  
(a) Horizontal commitments 
40. Chile exempts from its specific commitments the application of its current and future special 
or voluntary investment regimes, in particular , Decree Law 600, also known as Foreign Investment 
Statute, which is a voluntary regime providing fo r non-discrimination, free repatriation of capital and 
profits, and a fixed overall tax rate.
11  In order to benefit from the special regime certain categories of 
investments require approval from a governmental Foreign Investment Committee, and Chile reserves its right to reject applications to invest under this regime.  These invest ments are:  a) those with a total 
value over USD 5 million;  b) those relating to sector s or activities performed by the state or carried 
out by public utility companies;  c) those in the mass  media; and d) those made by a foreign state or a 
foreign public entity.  Chile reserves its right to rest rict payments and transf ers in accordance with the 
provisions of Annex XI of the Agreement (in par ticular by reserving the possibility of requiring a 
temporary reserve up to 30 per cent of the value of th e transfer).  In addition, Chile reserves the right 
to adopt measures establishing rights or preferences for original ethnic groups, and to grant subsidies 
in accordance with the subsid ies disciplines of the GATS. 
                                                     
 
9 According to the Parties, there is no further liberalization to date to report.  Given that the Agreement 
entered into force in December 2007, the firs t three year period has not yet elapsed. 
10 Document MTN.GNS/W/120, 10 July 199 1, available on the WTO website at 
 www.wto.org/english/tratop_e/ serv_e/mtn_gns_w_120_e.doc  
11 The text of Decree Law 600 and of other special investment regimes are available on the website of 
the Chilean Foreign Investment Committee: www.foreigninvestment.cl   WT/REG179/4 
 Page 13 
 
 
  41. Mode 3 commitments are restricted to cer tain forms of commercial presence: public 
corporations, private-limited companies and subs idiaries.  Real estate acquisitions and the 
performance of other legal acts in border areas must  comply with the provisions of the relevant 
legislation.  As in the GATS, the entry of natu ral persons supplying servi ces (Mode 4) is governed by 
the commitments in the horizontal section.  Basically, mode 4 is unbound except for transfers of 
senior and specialized persons12 within a foreign enterprise estab lished in accordance with mode 3 
commitments who are admitted temporarily for two years, extendable to two more years.13    Foreign 
personnel may not represent more than 15 per cent of the total staff employed in Chile for 
organizations with more than 25 employees.14   
(b) Sector-specific commitments 
42. Although broader in coverage than the comm itments under the GATS, Chile's commitments 
in legal services under modes 1 and 3 are subject to a nationality requirement ("the exercise of the profession of lawyers is reserved to Chilean nationa ls"), which applies primarily to legal services 
requiring pleading before a court of justice. In the case of other professional services, there are local incorporation requirements for accountants and auditors. Commitments on architectural and 
engineering services are similar to the GATS ( unbound for modes 1 and 2; and no limitations for 
mode 3); while the commitments on veterinary a nd some auxiliary medical services (e.g. midwives, 
nurses) contain no limitations for modes 1 to 3.   All Computer and Related Services have been bound 
with no limitations on modes 1, 2 and 3.  R esearch and Development Services are subject to 
limitations in mode 3, for instance certain explorati ons must be authorized by the state, and authorities 
may require that researchers from state-owned institu tions be part of the research activities.  Real 
Estate Services, Rental/Leasing Services without crew/operators and Other Business Services are 
generally free of limitations in modes 1, 2 and 3 in the sub-sectors committed.   
43. As in the GATS schedule, Chile excludes b asic local telecommunications services from the 
coverage of its commitments in the Agreement;  only long distance national and international basic 
telecommunication services are covered.  Supply of  these services is subject to a concession, license 
or permit granted by the Under-Secretaria t of Telecommunications.  Commitments on 
telecommunications include however one-way satellite  transmissions of Direct-to-Home and Direct-
Broadcast-Satellite television serv ices and digital audio services , and free reception broadcasting 
services.  The commitments also provide for full coverage of value-added telecommunication services, subject to limitations described on the lis t. Chile's commitments in the Agreement include 
postal and courier services (including express delivery) .  Chile reserved the right to exercise a state 
monopoly on postal items.   
44. In the case of construction services and related e ngineering services, Chile reserved the right 
to impose any market access limitation on modes 1 and 3, but on a national treatment basis. Distribution services, environmental services, tourism and travel-related services and recreational, cultural and sporting services are for the most part lib eralized with regard to modes 1, 2, and 3. 
Finally, Chile liberalises the following sub-sectors of transport services: maritime transport, 
inward-sailing transportation, air transport servi ces and road transport services.  The modalities of 
liberalization are generally no limitations for mo des 1 and 2, and detaile d conditions for mode 3 
                                                     
 
12 The schedule contains a detailed description of "senior and specialised personnel";  this category 
does not include members of the board of directors of a company established in Chile.  
13 Temporary entry is also granted to non-resident representatives of a service supplier seeking entry 
with the purpose of negotiating the sale of services, and to senior personnel responsible for setting up in Chile a 
commercial presence of a service prov ider of an EFTA State, when th ese persons do not supply the service 
themselves and the service provider ha s its principal place of business in the territory of an EFTA state and has 
no other representative, office, br anch or subsidiary in Chile.  
14 In Chile's GATS Schedule, the 15 per cent ceiling applies to all services sectors (except professional 
services), whenever enterprises have more than 15 employees.   WT/REG179/4 
Page 14  
 
  concerning technical requirements, registration of  the means of transport, and movement and 
nationality of staff.  
2. Iceland 
45. Iceland's schedule contains specific commitments  in the following sectors: business services; 
basic telecommunication services, construction and re lated engineering services; distribution services; 
environmental services; tourism and travel related services; recreational, cultural and sporting 
services; and transport services.  Iceland's horizontal commitments under the Agreement, including for mode 4, are the same as those in its GATS schedule.  However, the sectoral commitments under 
the Agreement provide for less sectoral coverage  than Iceland's commitments in the GATS. The 
following subsectors, which appear in the GATS sche dule, have not been included in the bilateral 
commitments: financial services (which has been excluded from the scope of the agreement); some 
value-added telecommunication services (e.g. electronic mail, voice mail, online information and database retrieval, and electronic data exchange ); maritime transport services (both freight and 
passenger transportation).  The sectors included in the bilateral schedule are subject to the same limitations contained in the GATS schedule. 
3. Liechtenstein 
46. Liechtenstein's schedule under the Agreement is  the same as Liechtenstein's schedule under 
the GATS, with the exception of financial servic es which are not included in the FTA schedule.  
Under the Agreement, Liechtenstein undertakes commitments in all services sectors with the 
exception of Audiovisual services, Postal services, Construction and Related Engineering Services, Health-related and Social Services, and Financial Services.  
4. Norway 
47. Norway's schedule contains commitments in all service sectors, with the exception of 
audiovisual services, postal services, financial services and health-related and social services.  The FTA schedule is based on Norway's GATS schedule,  but with the addition of commitments for 
pipeline transportation services, and in some spec ific services within business, construction and 
related engineering, communication, distribution, en vironmental and maritime transport services.  In 
addition, horizontal restrictions in modes 3 and 4 have been liberalized under the FTA (see below).  
(a) Horizontal commitments 
48.  Norway's limitations on national treatment  for general authorization procedures for 
acquisition and establishment in all sectors is less stringent under the FTA than under GATS.  Under 
the GATS, corporations registered in Norway, an d foreigners and foreign controlled companies in 
Norway are subject to conditions when acquiring r eal estate:  under the GATS, only foreign citizens 
residing in Norway may purchase or lease propert y for housing, secondary residences and business 
activities, whereas under the FTA foreign citizens not resident may purchase secondary residences 
subject to a concession.  Norway has relaxed the re sidency requirements applying to the formation of 
a limited liability company or foundation compared with its GATS commitments.   
49. Commitments for mode 4 are largely based on Norway's GATS commitments.  Nevertheless, 
commitments with regard to the entry of non-intr a-corporate transferees have been improved by 
eliminating the requirement to pass an economic need s test, and by providing further clarification as 
to the maximum length of stay.   WT/REG179/4 
 Page 15 
 
 
  (b) Sector-specific commitments 
50. In business services, Norway has made commitmen ts in addition to its GATS Schedule in the 
following sectors/subsectors:  engineering service s;  rental/leasing services without operators;  
advisory and consulting services related to hunting;  se rvices incidental to mining;  labour recruitment 
and provision of personnel;  rela ted scientific and technical consulting services;  and convention 
services.  In distribution services, Norway has also made commitments for commission agents' 
services, and wholesale and retailing trade services of electricity and taken commitments in wholesale trade services and in construction and related engineering services.  Norway has made commitments 
additional to its GATS schedule for pipeline tran sport services and in certain subsectors of 
environmental services, and of maritime transport services.  
5. Switzerland 
51. Switzerland's Schedule contains commitments in all service sectors with the exception of 
audiovisual services, postal services, courier ser vices, Financial Services and Health-related and 
Social Services.  The Schedule under the Agreement is the same as Switzer land's Schedule under the 
GATS,
15 with the addition of a few specific service s in the sectors of business services (real estate 
services), construction services (foundation works) and transport services (supporting services for 
railway transport and road freight transportation).16  
F. REGULATORY PROVISIONS  
1. Provisions specific to trade in services 
(a) Domestic regulation 
52. Article 28, which deals with domestic regula tion, is modelled on GATS Article VI.  The 
Parties undertake to administer all measures affecti ng trade in services in the covered sectors in a 
reasonable, objective and impartial manner.  They al so undertake to provide judicial or administrative 
review of decisions concerning trade in servi ces and to issue authorizations promptly.  
53. The Parties will review the results of the negotiations on disciplines on qualifications, 
technical standards and licensing requirements undertaken by WTO Members under 
GATS Article VI:4, with a view to incorporating th em in the Agreement.  Until the incorporation of 
these disciplines, the Parties will ensure that their licensing and qualification requirements and 
technical standards in the sectors covered by thei r schedules are based on objective and transparent 
criteria, are not more burdensome than required, and do not constitute in themselves a restriction on 
the supply of the service.  Moreover, no new require ment will be applied if it could not have been 
reasonably expected at the time of the conclusion of the Agreement.    
54. Article 28.6 establishes a rebuttable presumption that domestic standards prepared, adopted 
and applied in accordance with international sta ndards applied by both Parties comply with the 
provisions of Article 28.  
(b) Recognition 
55. Article 29 provides for mechanisms to promote mu tual recognition of the fulfilment of criteria 
relating to authorization, licensing, accreditation, op eration and certification of service suppliers.  The 
Parties agree to encourage the relevant bodies to fo rmulate recommendations in this sense, which are 
to be reviewed by the Joint Committee.  Once approved by the Joint Committee, these 
                                                      
15 Switzerland's horizontal commitments are th e same as those in its GATS Schedule. 
16 Excluding Financial Services, which are in Switzerland's GATS Schedule, but not the FTA Schedule. WT/REG179/4 
Page 16  
 
  recommendations will be implemented through an  agreement that should comply with WTO 
provisions, particularly GATS Article VII.
17  The Parties also agree to encourage relevant bodies to 
develop procedures for the temporary licensing of professional service suppliers.    
56. If a Party recognises the education, experience obtained, requirements met or licenses or 
certifications acquired in the territory of a non-Part y, either by agreement or autonomously, the Party 
must offer another Party the opportunity to negotiate  similar agreements or to demonstrate that the 
criteria met in its territory should also be r ecognised.  The Joint Committee agrees to review 
periodically the application of Article 29, at least every three years.   
(c) Subsidies 
57. Article 81 of the Agreement provides that the ri ghts and obligations of the Parties in respect 
of subsidies related to trade in services will be governed by the GATS.  
2. Provisions common to other areas of the Agreement 
(a) Payments and capital movements 
58. Articles 38-42 of the Agreement deal with payments and capital movements.  The Parties 
allow any payments and transfers of the current account between themselves and the free movement 
of capital relating inter alia to investments in service sectors ma de in accordance with the relevant 
provisions of the Agreement.  The free movement of  capital extends to the liquidation and repatriation 
of capitals and profits.  A list of reservations to th ese principles which may be applied only by Chile is 
contained in Annex XI.  All Parties have the right  to apply temporary safeguard measures in case of 
serious difficulties for the operation of m onetary or exchange rate policy.  
(b) Transparency 
59. The Parties will publish or make publicly ava ilable their laws, regulations, procedures and 
administrative rulings of general application as well  as international agreements that may affect the 
operation of the Agreements (Article 82).  Each Party will establish a contact point to facilitate 
exchange of information (Article 83); contact point s are available only to other Parties, and not to 
private persons.  The Agreement also provides that the " Parties shall make information on proposed 
measures available to the extent possible under their domestic laws and regulations" (Article 83). The Agreement does not contain a requirement to formally notify the other Parties of the 
introduction of new measures or changes to existing measures. 
 
G. SECTOR -SPECIFIC PROVISIONS  
1. Telecommunications services 
60. Specific provisions on telecommunications services are laid down in Annex IX.  The Annex 
closely follows the content of the 1996 "Reference  Paper" drafted by the GATS negotiating group on 
basic telecommunications and lays down the basic principles of the regulatory framework for basic 
telecommunications services.  
61. The Annex calls for transparency and non-discr imination in relation to the operation of 
regulatory authorities, the issuing of licenses and a llocation of scarce resources such as frequencies, 
numbers and rights of way.  The Parties undertak e to maintain appropriate measures to prevent 
suppliers from engaging in anti-competitive practic es (e.g. cross-subsidization) and to ensure 
inter-connection to telecommunications transport netw orks at any technically feasible point in the 
                                                      
17 According to the Parties, no such agreement has been concluded thus far.  WT/REG179/4 
 Page 17 
 
 
  network and under specific conditions (e.g. non-discr iminatory terms, conditions, and rates; in a 
timely fashion).  Each Party can define the kind of universal service it wishes to maintain, but the provisions on universal service must be transp arent, objective, non-discriminatory, competition-
neutral and not more burdensome than necessary.  
2. Financial services 
62. The Parties did not undertake any commitments in financial services.  Article 45 provides for 
the Parties to consider taking commitments in Fina ncial Services two years after its entry into force
. 
H. GENERAL PROVISIONS  
1. Exceptions 
(a) Exceptions specific to trade in services 
63. Article 44 states that GATS Article XIV and XXVIII paragraph (o) are incorporated and 
made part of the Chapter of the Agreement dea ling with trade in services and establishment.   
__________