RESTRICTED
WORLD TRADE WT/REG3/2/Add.1
23April 1997
ORGANIZATION(97-1756)
Original: English Committee onRegional Trade Agreements
ENLARGEMENT OFTHE EUROPEAN COMMUNITIES
ACCESSION OFAUSTRIA, FINLAND AND SWEDEN
Questions andReplies
Addendum
Thisdocument reproduces theresponses provided bytheEuropean Communities andtheir
Member States towritten questions received fromMembers onthetrade-in-services aspects oftheTreaty
concerning theAccession ofAustria, Finland andSweden totheEuropean Union.
Mentions to"Job510" inthequestions refer tothedocuments released bytheEuropean
Communities andtheir Member States on31January 1997, andtitled "Schedule ofSpecific
Commitments" and"List ofArticle II(MFN) Exemptions".
____________________________
Foreword
Thisdocument contains answers toquestions which werespecific anddetailed enough allowing
forananswer. Given thatallMembers havereceived theconsolidated documents inthecourse of
January 1997, itshould havebeenpossible tohaveidentified theareas ofpossible concerns tothem.
Answering questions intheabstract doesnothelptheexamination ofthisprocess.
Theanswers aregrouped onthebasis ofthespecific commitments ofAustria, Finland and
Sweden respectively andnotpursuant tothecountry whoasked forthequestions sincethereweresome
overlapping questions.
Beforerespondingtothespecificanswers,itisexplainedbelow,followingsomegeneralquestions
raised about theenlargement oftheEuropean Community from12Member States to15Member States,
howtheoverall levelofliberalisation should beseen.WT/REG3/2/Add.1
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I. General Questions/Comments
1. Article V:4ofGATS states thattheregional trade agreement shall notinrespect ofany
Member outside theagreement raisetheoverall levelofbarriers totrade inservices within
therespective sector orsub-sector compared tothelevel applicable prior tosuch an
agreement. Arethere sectors orsub-sectors inwhich theoverall levelofbarriers hasbeen
raised inrespect ofanythird country outside theagreement because oftheenlargement
oftheEU?
2. Does theaccession ofAustria, Finland andSweden totheEuropean Community provide
fortheelimination ofsubstantially alldiscrimination among theparties inthesense of
Article V:1(b) GATS? Please specify exemptions within services sectors accorded tothe
newmembers andpersistent discriminatory measures between oramong theparties.
3. Anexamination oftheEC-15 schedule ofspecific commitments reveals thatsome
modifications were made totheschedule ofthethree acceding countries asaresult ofthe
consolidation ofservices schedules, notably intheareas ofbusiness services andtransport
services. CantheECidentify foreachoftheacceding members thesectors andthemodes
forwhich commitments have been modified asaresult oftheaccession.
Foreachmodificationidentifiedabove,andinparticularincaseswhereanaccedingcountry
went from nolimitation onmarket access ornational treatment to"unbound", please
provide anexplanation asthewhytheformer commitments oftheacceding members were
modified.
With theaccession ofAustria, Finland andSweden totheEuropean Community of
12Member States, thelevelofliberalisation offered tothirdcountries hassubstantially beenimproved
bythemere factoftheaccession.
Indeed, third country services suppliers cannowhaveaccess totheECmarket through the
market of15Member States andfromthere on,based ontheprinciples oftheinternal market, freely
operate throughout theEuropean Community. Economically thismeans significant progress given
thehighdegree ofliberalisation which wasalready achieved inAustria, Finland andSweden respectively
andtheservices operators which were already established there ordoing business inandwiththese
countries andwhich cannowalsobenefit fromtheentire European Community market. Thedynamic
created bytheinternal market isinparticular relevant inimportant services sectors suchasbanking,
insurance, securities, telecommunications, distribution services andtourism activities.
ThefactthatAustria, Finland andSweden arenowpartoftheEC’sSingle Market inservices
isinitself animprovement intheoverall levelofliberalisation offered towards thirdcountries.
IntheAccession Treaty, noservices ’sector ormode ofsupply isbeing excluded: the
liberalisation inservices takes place onthebasis ofthefourfreedoms oftheTreaty ofRome: Right
ofEstablishment, Supply ofServices, Movement ofCapital andFreeMovement ofPersons. Theonly
transitional measure onservices relates tolandtransport (special regime fortrucks transitting through
Austria) inthecaseofAustria. Accordingly, thenature oftheexamination fortheenlargement process
should bebased onArticle V:4which amounts toacomparison between theoverall levelofliberalisation
before andafteraccession.
Ithasalready beenexplained thatbythemerefactofaccession, theoverall levelofliberalisation
hasbeenimproved. From thequestions raised itisalsoclearthattheconsolidation ofthescheduleWT/REG3/2/Add.1
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ofcommitments hasbeendoneinanaccurate manner :mostchanges pointed outaremade forscheduling
orpresentation purposes.
Theoneareainwhich theoretically de-liberalisation could beclaimed isinthespace transport
sector. Thisshould bejudged onitsmerits :noeconomic impact ofthecommitment made andno
areainwhich forthetimebeing realmultilateral liberalisation istaking place. Weareinterested in
learning which Members might havebeenaffected.
Bythesame token, besides theoverall levelofliberalisation which hasbeenimproved, there
aresome specific improvements made notably byAustria. Thisisthecase,forexample, withrespect
tothemaintenance ofrailtransport andfinancial services.
II. Specific Commitments ofAustria
4. Dataprocessing sector inthevalue-added telecommunication services andspace transport
services thatareincluded intheprevious Schedules (GATS/SC/7) aredeleted inthe
consolidated schedules incorporating schedules ofAustria, Finland andSweden. What
arethereasons forthedeletion?
5. Telecommunication services (P.55 ofJob510): "data processing" isnotlisted inthe
consolidated schedule butwaslisted intheAustrian schedule. This service should be
included intheEU-list (according toArticle V:4GATS theregional agreement should
notraise thelevelofbarriers totrade within sectors andsub-sectors).
Thecommitment byAustria ondataprocessing hasbeendeleted from thecommitment on
value-added services since thisactivity wasconsidered tobebasic telecommunications. Asaresult
ofthenegotiations onbasictelecommunications, Austria hasmade afullcommitment ondataprocessing
(seedoc. S/GBT/W/1 add. 1/Rev. 2). Therefore, thecommitment isre-established asfrom
1January 1998.
6. Space transport (CPC 733): sector should beincluded, because waslisted inAustrian
schedule (seeargumentation inquestion 5).
7. WenotethattheoriginalAustrianschedulecontainedcommitmentswithrespecttoCPC733
Space Transport butthattheschedule ofEC-15 doesnotinclude CPC 733. CantheEC
identify allthesectors (sub-sectors) thatwere listed intheschedules oftheacceding
members andwhich arenotpartoftheEC-15 schedule. Please provide anexplanation
astowhytheformer commitments oftheacceding members were notretained.
Thecommitment made byAustria onspace transportation hasbeendeleted, given thelack
ofequivalent concessions byother GATS ’Members inthespace transport sector. Given thelimited
impact ofthecommitment made byAustria inthissector ingeneral, itwasconsidered preferable to
delete thisminor commitment, rather thantomaintain adifferentiated market access commitment within
theEC.
8. Forthefollowingservices,thespecificlimitationsunderMode4isnotmentioned(according
toAustrian listitshould be"commercial presence required"):
P.47(ofJob510)Services incidental tomanufacturing
P.49Investigation services
P.54Collection Agency ServicesWT/REG3/2/Add.1
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P.67Noise Abatement Services
Therequirement "commercial presence required" under anumber ofservices sectors forthe
commitments under Mode 4,hasbeendeleted because thisrequirement wasredundant, compared to
thegeneral requirements listed inthehorizontal section under Mode 4.
9. Intheprevious schedule, with respect tothesector relating toaircraft there wasno
restriction onmarket access inthethird mode. Inthenewschedule (p.41 ofJob510),
withregard tothispoint, itisstated thattheaircraft must beowned either bynatural
persons meeting specific nationality criteria orbyjuridical persons meeting specific criteria
regarding ownership ofcapital andcontrol (including nationality ofdirectors). What are
thereasons forthischange?
Thecondition attached tothesupply ofrental ofaircraft hasbeenadded inthecaseofAustria
because itresults fromCommunity legislation which allMember States, including Finland andSweden,
hadattached tothesupply ofsaidservice. Itdoesnotaddanybarrier totheconditions ofestablishment
ofathirdcountry service supplier providing rental ofaircraft :these remain thesame asbefore. It
onlyspecifies thattheaircraft which theservice supplier isrenting must comply withcertain rules
oforigin.
III. Specific Commitments ofFinland
10. With respect tothefollowing sectors, thenational treatment limitations regarding the
fourth mode were notintheprevious schedule. Inthenewschedule, theyarechanged
to'unbound except asindicated inthehorizontal section andsubject tospecific limitations '.
What arethereasons forsuchchanges?
(d) architectural services (p.26 ofJob510)
(e) engineering services (p.27)
(f) integrated engineering services (p.28)
(g) urban planning andlandscape architectural services (p.28)
(k) other-related scientific andtechnical consulting services (p.36)
(a) consultancy services andrelated totheinstallation ofcomputer hardware (p.36)
(b) software implementation services (p.36)
(c) data-processing services (p.37)
(d) data-base services, maintenance andrepair (p.37)
(e) other computer services (p.37)
(b) R&Dservices onsocial sciences andhumanities (p.38)
(a) involving ownorleased property (p.39)
(b) onafeeorcontract basis (p.40)
(d) relating toother machinery andequipment (p.42)
(a) advertising (p.43)
(b) market research andopinion polling
(c) management consulting services (p.44)
(d) services-related tomanagement consulting
(e) technical testing andanalysis services
(h) advisory andconsulting services-related tomining (p.46)
(l) security services (p.50)
(n) maintenance andrepair ofequipment (p.51)
(o) building cleaning servicesWT/REG3/2/Add.1
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(h) value-added services, electronic mail, voice mail, on-line information anddata-base
retrieval, EDI, codeandprotocol conversion (p.55)
(a) commission agents 'services (p.58)
(b) wholesale trade services
(c) retailing services (p.59)
(d) franchising (p.60)
(b) refuse disposal services (p.65)
cleaning services ofexhaust gases (p.66)
(d) other environmental protection andservices (p.68)
(a) hotels, restaurants andcatering (p.91)
(b) travel agents andtouroperators services (p.92)
(b) news andpress agency services (p.94)
(d) sporting andother recreational services other than gambling andbetting
services (p.95)
Change to"unbound except asindicated inthehorizontal section andsubject tospecific
limitations": noneoftheentries under National Treatment/Mode 4havebeenchanged inthecaseof
Finland (FIN) or,asamatter offact,fortheother Member States.
11. Inthesector oflegaladvice onhome country lawandpublic international law,there was
nolimitation onmarket access inthefirstmode, according totheprevious schedule. In
thenewschedule (p.16 ofJob510), thispoint hasbeen changed to'Unbound when
practisinglegalservicesasamemberoftheGeneralBarAssociation.'Whatarethereasons
forsuchachange?
Commitment onlegalservices :unbound onMode 1.Thisentryhasbeenchanged from“none”
to“unbound when practising legalservices asamember oftheGeneral BarAssociation ”.Insubstance,
thescope ofthecommitment hasnotbeenchanged atall:alllegal advice canstillbedone ona
cross-border basis inFinland. What cannotbedone, istosupply legalservices asamember ofthe
General BarAssociation sinceforthelatter, asisreflected bytheexisting entries under Modes 3and4,
citizenship andresidency isrequired. Thechange hasbeenmade tobeabsolutely correct andcoherent
inscheduling. Inpractice, what thismeans is“none except ”butthisisnotawayofscheduling.
Therefore theword “unbound ”appears butinrelation tothisMembership only.
12. Inthesecurity services sector, market access wasallowed inthefirstmode oncondition
thatforeign service providers establish branches ('establishment requirement ').Thishas
beenchanged to'unbound 'inthenewschedule (p.49 ofJob510). What arethereasons
forsuchachange?
Inthissecurity services sector, firstmode inthenational treatment limitations column
hasbeen changed from 'none'to'unbound '.What arethereasons forthechange?
13. Security Services (p.49) ForFinland onlyCPC 87305 islisted as"security services (part
ofCPC 873)". Therefore atleast CPC 87302 "security consultation services" and
CPC 87309 "other security services" should bebound forFinland.
Thecondition attached byFinland tothesupply ofsecurity services onacross-border basis
i.e.establishment requirement means thatcross-border isnotpossible (i.e.unbound). Forscheduling
reasons andinorder tobecoherent withtheentries made bytheother Member States, thisrequirement
hasbeendeleted. Insubstance, thisdeletion doesinnowayalterthecommitment made byFinland.WT/REG3/2/Add.1
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Asforthecoverage ofsecurity services isconcerned, thecommitment made byFinland related
topartsofCPC873. IntheEC-12 Schedule, every timeapartofCPConlywasoffered, ithadbeen
specified which part. Inorder tobecoherent withthisscheduling method, ithasnowbeenspecified
thatthecommitment byFinland withrespect tosecurity services relates toactivity 87305 i.e.guard
services. There isnoindication, whatsoever, assuggested bySwitzerland, thatthiscommitment should
alsoinclude CPC activities 87302 and87309.
14. Intheprevious schedule ofFinland (GATS/SC/33), thesector ofexhibition management
services inother business services wasmentioned. What arethereasons forthedeletion
ofthissector inthenewschedule?
Thecommitment onexhibition management services: isfullyretained buthasbeenclassified
under Convention Services (seep.53ofEC-15 Schedule)
IV. Specific Commitments ofSweden
15. Thefourth mode inboth market access andnational treatment limitations column of
banking andother financial services (excluding insurance) hasbeenchanged from 'none'
to'unbound except asindicated inthehorizontal section andsubject tothespecific
conditions andlimitations '(p.87 ofthenewschedule -Job510). What arethereasons
forthechange?
Thecommitment bySweden onbanking andother financial services (excluding insurances)
under market access andnational treatment/Mode 4hasbeenchanged from“none”to“unbound except
asindicated inthehorizontal section ”because Sweden isnowalsocommitting themovement ofpersons
forfinancial services pursuant tothegeneral horizontal commitment, rather thanpursuant topoint 9
oftheUnderstanding onFinancial Services. Thisisinfactanimprovement ofthelevelofliberalisation
offered bySweden, asaresult ofjoining theECSchedule.
16. Regardingentertainmentservicestherewerenolimitationsonmarketaccessnoronnational
treatment inthefourth mode. This point hasbeen changed to'unbound 'inthenew
schedule (p.93 ofJob510). What arethereasons forthechange?
Regarding entertainment services, thecommitment bySweden onMode 4hasremained
unchanged andisstillasspecified inthehorizontal sector.
17. Thefirstmode inthemarket access limitations column forphotographic services hasbeen
changed from'none'to'unbound except foraerial photography '(p.52 ofthenewschedule).
What arethereasons forthechange?
Forphotographic services, theonlyactivity which canbesupplied onacross-border basisrelates
toaerial photography. Theother activities, asdescribed inCPC 875aretechnically notfeasible to
supply onacross-border basis andtherefore Sweden hasfollowed theentry made bytheEC-12.
Accordingly, nochange inthelevelofliberalisation hasoccurred.
V. MFN Exemptions
18. With respect toMFN exemptions, wenotethatnone oftheacceding members hadan
exemption fordirect non-life insurance prior toaccession. However, itwould appear that
theyarenowcovered bytheECexemption fordirect non-life insurance. Please provideWT/REG3/2/Add.1
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thereason forextending theMFN exemption ondirect non-life insurance tothethree
acceding countries.
19. Please provide alistofalladditional MFN exemptions thatwillbetaken bytheacceding
members asaresult ofECaccession.
Theonlyconcrete question received ontheMFN exemption listrelates totheMFN exemption
taken indirect non-life insurance ThisMFN exemption which theEC-12 hadtaken has,asaresult
ofthewayinwhich theinternal market works withrespect toinsurance services (iesingle license)
automatically tobeextended tothenewMember States. Thisisnotanewexemption butanextension
ofanexisting oneproviding thesametreatment toSwitzerland astheonewhich wastaken bytheEC-12.
Thistreatment isinnowayaffecting theoverall level ofliberalisation offered bytheECand/or
respectively Austria, Finland andSweden tothirdcountry service suppliers innon-life insurance; it
isonlyextending thetreatment granted atthetimeby12Member States toSwitzerland andvice-versa.
Innowaytheliberalisation offered byrespectively Austria, Finland andSweden hasbeenaltered for
services suppliers indirect non-life insurance from thirdcountry service suppliers.