RESTRICTED
WORLD TRADE S/C/W/44
1 July 1998
ORGANIZATION
(98-2629)
Council for Trade in Services
ARCHITECTURAL AND ENGINEERING SERVICES
Background Note by the Secretariat
I. INTRODUCTION
1. The Secretariat has prepared this note at the request of the Council for Trade in Services. The
note is intended to provide background information fo r sectoral discussions to be conducted by the
Council as part of the information exchange progra mme.  As with previous sectoral notes by the
Secretariat, this note contains basic and general info rmation on trade in services of the sector concerned,
in order to facilitate the discussion of relevant issues by the Members, and therefore should not be
considered exhaustive.  It is expected that furthe r information will become available in due course.  In
accordance with suggestions made at the meeting of  the Council held on 24–25 June, a list of issues for
discussion has been added as an Annex to this note.  Those questions are intended solely to facilitate the
preparation of Members for the discussions in th e meeting of the Council, and are not meant to be
exhaustive.  They should not be interpreted as indica tions of any particular views or interpretations of
the GATS held by the Secretariat or delegations.
2. In the course of the Uruguay Round negotiations , the Secretariat had produced a note "Trade in
Professional Services" in document MTN.GNS/W/67 of 25 August 1989.  This earlier note provided an
overview of the various activities comprising professi onal services, described the forms of trade in those
services, and discussed the objectives and the content of measures affecting such trade.  Architectural
and engineering services were briefly discussed in the note, although the focus was on accountancy,
legal services, management consulting and advertising.   Delegations are invited to refer to this earlier
note, which is now being re-circulated, as necessary. 3. Documents distributed in the Working Party on Professional Services are relevant to the
architectural and engineering subsectors.  In the fo llowing, reference is only made to a small number of
those documents, but Delegations are reminded that ma ny of the questions raised and the information
provided in the course of the work of this Working Party are very much relevant to discussions on these
subsectors.
1  It needs to be mentioned, however, that detailed country-specific information on trade
volumes, regulatory regimes and trade restrictions c ould only be provided by Members.  The Secretariat
would greatly appreciate any comments or additiona l information from Members on these subsectors or
on any related matters.
4. A certain overlap exists between the scope of this note and the sectoral  note on construction and
related engineering services (S/C/W/38 of 8 June 1998) .  The focus of this note is on architectural and
                                             
1It is also recalled that the Union Internationale des Architectes  (UIA) had sent a letter dated 21 October
1996 which had outlined the organization's views on the work of the WPPS, and the  Architects' Council of
Europe  (ACE) had submitted a communication dated 22 October 1996 which had defined the position of the
architectural profession in Europe on the issues being discussed in the WPPS. (Indicated in document
S/WPPS/M/7.)S/C/W/44
Page 2
engineering services as professional services, or se rvices provided by qualified architects and engineers,
and not on the economic activities of physical construc tion and related engineering works, although they
are obviously closely inter-related.  The reader is in vited to refer to the note on construction and related
engineering services (S/C/W/38) for an overview of construction activities, measures applied thereto,
and for sources of information, in addition to those indicated below.
II. DESCRIPTION OF THE SECTOR
5. In the "Services Sectoral Cl assification List" (MTN.GNS/W/120) , architectural and engineering
services are listed as subsectors of professional servi ces under four headings;  they are briefly discussed
below in the order they appear in the list.  Each of the four subsectors correspond to the UNCPC
classification2 at the four-digit level.
- Architectural services (CPC 8671)
This item covers all types of architectural se rvices except those classified below under urban
planning and landscape architect ural services, which are: (i) advisory and pre-design
architectural services (86711), (ii) architectural design se rvices (86712), (iii) contract
administration services (86713), (iv) combined ar chitectural design and contract administration
services (86714), and (v) other architectural services (86719).
 - Engineering services (CPC 8672)
This item covers all engineering activities except integrated engin eering services, which are: (i)
advisory and consultative engineering services ( 86721), (ii) engineering design services for the
construction of foundations and bu ilding structures (86722), (iii) en gineering design services for
mechanical and electrical installations for build ings (86723), (iv) engineering design services
for the construction of civil engineering work s (86724), (v) engineering design services for
industrial processes and production (86725), (vi) engineering design services n.e.c. (86726),
(vii) other engineering services during the c onstruction and installation phase (86727), and (viii)
other engineering services (86729).
- Integrated engineering services (CPC 8673)
This item covers engineering services related to turnkey projects, which are: (i) integrated
engineering services for transportation infrast ructure turnkey projects (86731), (ii) integrated
engineering and project management services for water supply and sanitation works turnkeyprojects (86732), (iii) integrated engineering se rvices for the construction of manufacturing
turnkey projects (86733), and (iv) integrated en gineering services for other turnkey projects.
- Urban planning and landscape ar chitectural services (CPC 8674)
This item covers (i) urban planning services (86741) and (ii) landscape architectural services
(86742).
6. The above does not explicitly cover services prov ided by surveyors or topographical engineers. 
In the CPC classification, such services  would seem to belong to either or several of:  "site investigation
work" (5111, a subsector of construction services), "advisory and pre-design architectural services"
                                             
     2United Nations, Provisional Central Product Classification, Series M. No. 77, 1991.S/C/W/44
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(86711, a subsector of archit ectural services), "advisory and consultative engineering services" (86721,
a subsector of engineering services), or, "surface surveying services" and "map-making services" (86753
and 86754, included in "related scientific and technical  consulting services").  Since the functions of a
surveyor or a topographical engineer differ from count ry to country, one would need to look at the
content of the service provided in order to determin e where those services bel ong in the classification. 
7. Services provided by construction economists  (a profession most common in some European
countries, such as Spain, Italy and the U.K.), i.e. development and management  of construction projects,
conducting feasibility studies and risk analyses , providing advice on design and construction
procurement etc. appear to belong to architectur al, engineering, or urba n planning and landscape
architectural services above, as the services are mo st often provided by either architects or engineers,
depending on the country.3
8. One question arising from the classification lis t in the W/120 document is whether there is an
apparent inconsistency between the coverage of the subsectors indicated in the title ("engineering
services" on the one hand, and "construction and related engineering services" on the other), and thecorresponding CPC sections shown (CPC 8672 fo r the former and CPC 511 – 518 for the latter)
.4  In the
CPC classification, section 8672 (engineering serv ices) does not exclude construction-related
engineering services, while sections 511 – 518 (constr uction services) do not appear to cover "related
engineering services".  Construction-related engin eering services are included in "Other engineering
services during the construction and installation phase (86727)", a subset of engineering services.  If this
is indeed an ambiguity in the classification, it coul d have certain implications for the existence and
degree of commitment of Members in construction-related engineering services.5
III. EC ONOMIC IMPORTANCE OF THE SECTOR AND ITS MAIN ECONOMIC FEATURES
9. Architectural firms provide bl ueprints and designs for buildings and other structures, while
engineering firms provide planning, design, cons truction and management services for building
structures, installations, civil engineering works a nd industrial processes etc.  Consulting engineers
are involved in all stages of a project, and thus thei r services overlap substantially with those of other
professionals.  Thus, architectural and engineering services are strongly integrated or inter-related
with physical construction activity and/or other bus iness services.  Due to this specific nature,
measurement of the economic importance of archit ectural and engineering services output is not
straightforward to the extent that, in  official statistics, it is most ofte n absorbed in the broader categories
of services output such as business services, or  construction activity.  Statistics on the number of
professionals, or employment statistics are availabl e for many countries, but are missing or unreliable
for countries in which there are no systems of com pulsory registration or accreditation.  In the United
States, engineering is one of the largest and mo st diverse of professi ons, while architecture is
comparatively much smaller.  In Europe, the situa tion appears to be different, where there may be more
architects while the engineering profe ssion appears to be relatively smaller.6
                                             
     3European Commission, Panorama of EU Industry 1997.
 4This point was not raised in the previous note on  construction and engineering services (S/C/W/38).
5Some countries have scheduled construction and engi neering services together (e.g. Venezuela, with
separate commitments in engineering services, as well), or have added remarks to clarify the scope ofconstruction and related engineering services (e.g. Hong Kong, China).
     6OECD, the OECD Report on Regulatory Reform, Chapter 3: Regulatory Reform and Professional Services,
1997.  According to the annex of this chapter, the US  engineering consulting industry employed around 660,000
persons with an output of almost US$62 billion in 1992.  Registered US engineers numbered about (cont)S/C/W/44
Page 4
10. With advanced communications systems, blueprints and designs can be transmitted
electronically, and consulting can be performed on-lin e.  Such a development would tend to raise the
importance of cross-border supply in those services.  It is also observed that cross-border trade inarchitectural and engineering services tends to rise along with the complexity and specialisation of the
service involved.
7  High-skill services that go with the construction of complex installations and
specialised plants, often in connection with direct  foreign investment, typically enter into export
contracts without similar local expertise.  It w ill probably remain true, however, that the bulk of supply
of architectural and engineering services would still take place through commercial presence or the
presence of natural persons.
11. Looking at available figures for international trade in those services, one can see that
industrialized countries appear to be net exporters of  those services, but in most cases this can be said
only in combination with other service categories, such as construction services or other technical
services.  (Table 1)  Although exports and imports of  architectural services are generally considered to
be fairly insignificant,8 one would expect that cross-border tr ade in architectural and engineering
services would be more important than that in cons truction services, as the supply of design and other
output by architects and engineers w ould seem to be more easily traded cross-border than construction
work.  On the basis of the existing fragmented data, this seems to be true for Canada, but not necessarilyapplicable to Europe, where cross-border constructi on services appear as important as cross-border
architectural and engineering services.  Data on sa les of architectural and engineering services by
domestic affiliates of foreign companies or foreign affiliates of domestic companies could be found for
the United States only. Moreover, these data were par tial, due to suppression of certain figures to avoid
disclosure of individual companies.
9  Despite the incompleteness of the data, however, both sales of
"engineering, architectural, and surveying services" by  foreign affiliates of U.S. companies and sales of
services to U.S. persons by U.S. affiliates of foreign companies appear to have grown in the 1994-5period. (Table  2)
12. Architectural and engineering service suppliers may be characterized by the dominance of small
businesses, especially for architects, although of ten architectural and en gineering functions are
combined in one company or group with the phy sical implementation facilities for construction.10 
Approximately 80 per cent of the costs of architectur al and engineering firms are composed of fixed
overheads.  Salaries of personnel, most of them highly qualified people, form the bulk of the costs.11  It
is often stated that architectural services remain predominantly local or regional.  International success
is relatively rare and is related either to the t op international artistic and intellectual cultures or to
"historic" patterns of internationa l trade.  Even the global architectural firms remain dependent upon the
international activities of their clients.12  The annexed Table 3 shows available data for the revenues of
the top 200 international design firms.
                                             
1.7 million in 1993.  By comparison, there were only 123,000 architects in the United States, and the U.S.
architectural service industry employing 124,100 people, which gene rated an output of US$12 billion .
7EUROSTAT, Architectural and Engineering Services and Other Technical Services, July 1993.
8European Commission, op. cit.
9U.S. Department of Commerce, Survey of Current Business, October 1997.
10European Commission, op. cit.
11EUROSTAT, op. cit
12OECD, idem .S/C/W/44
Page 5
13. Architects and engineers occupy a position upstr eam of the building and construction process.
Therefore, demand for architectural and engineering services is closely related to that of construction
and overall industrial investment, both of whic h are in turn linked to the economic cycle.13  Demand for
those services may be medium-term leadin g indicators for the construction industry.14
IV. REGULATORY STRUCTURE AND RELEVANT TRADE RESTRICTIONS
14. Architectural and engineering services bel ong to the group of "accredited" professional
services, as opposed to non-accredited business services such as marketing, advertising and consultancy.
15  The same market access and national treatment limitations often apply to accredited professional
services across-the-board.  Regarding issues con cerning domestic regulation, although the discussion in
the Working Party on Professional Services centered on the accountancy sector, similar issues arise in
architectural and engineering services as well.   However, compared to some other accredited
professional services such as accountancy and lega l services, architectural and engineering services
appear to be subject to fewer restrictive regulations .  Mutual recognition between countries of education
or professional experience, or li censes and certifications granted in a particular country has become
more and more popular in recent years, especia lly in architectural and engineering services.
15. Regulations applied in the professional services have as their primary objective the need to
ensure and maintain a certain quality of the service,  and hence to protect cons umers.  Such discussions
generally apply to architectural and engineering serv ices as well.  The potential impact of regulatory
measures on competition and hence on market access and national treatment of foreign professionals
under the GATS would need to be assessed carefully ag ainst this regulatory objective.  Typical market
access limitations would include restrictions on the form of commercial presence (only natural persons
or partnerships allowed), often in joint operation or joint venture with local professionals.  For natural
persons, entry may be subject to economic needs test s, or nationality requirements.  Access of foreign
suppliers may be limited to projects of above a certain amount, or to smaller building plans.  Nationaltreatment limitations would include residency requireme nts and requirements to use local services or to
employ local professionals.
16. The OECD has conducted a survey of regulations on access to professional services in the
OECD area as part of its work in preparation fo r the Second Workshop on Professional Services which
took place on 16 and 17 October 1996.  A categorized  inventory of measures affecting trade in
professional services has been compiled.  The OECD Secretariat presented the methodology and
preliminary results of the work in a meeting of the Working Party on Professional Services held on
19 October 1995.  Additional information from sample countries concerning regulations governing the
establishment of firms and nationality and local presence requirements was collected for the Third
Workshop held on 20–21 February 1997.  The following paragraphs draw heavily on the informationobtained from the work by the OECD, which was subs equently made available to the Working Party on
Professional Services.  Delegations are invited to re fer to those documents, as necessary.  On the other
hand, it has not been possible in the time available to  find comparable information on regulatory regimes
                                             
13EUROSTAT, op. cit .
14The Asian currency crisis is reported to have had a dampening effect on designer firms, according to the
Engineering News – Record, The 1997 International Construction Sourcebook.
15The distinction between accredited and non-accredited pr ofessional services was discussed in the Uruguay
Round Working Group on Professional Services.  See paragraph 30. below.S/C/W/44
Page 6
in architecture and engineering of non-OECD countries, and contributions from Members are
welcomed .16
17. According to the OECD, architectural and engin eering services are often not regulated by law
or reserved to specific practitioners in OECD countri es.  Regulation seems to affect foreign suppliers to
a much lower degree in architecture and engineering,  compared to accountancy and legal services, with
engineering probably being the sector where access for foreign professionals and firms is least difficult.
 Several OECD countries reported that no legal provisions applied with regard to access to the provisionof architectural services (Denma rk, Finland, Norway) or engineerin g services (Australia, Denmark,
Finland, Switzerland, United Kingdom). This is in shar p contrast to accountancy and legal services for
which virtually all countries reported the existe nce of some regulation on access to the profession. 
However, it should be noted that the title "architect " is protected in some countries (Finland, Norway,
United Kingdom).  It is also observed that control of professional standards in the architectural and
engineering professions probably tends to take place more through object-related regulations, norms and
standards such as building regulations, safety norms, etc.
18. Also in OECD countries, certa in architectural services, such as "requests for construction
permits" and "technical control of certification" are fre quently reserved to architects, while "design and
planning" and "obtention of permits" are often reserv ed to certain engineers.  Such measures are
imposed to guarantee the accuracy and the quality of the services provided, and would normally beapplied on a non-discriminatory basis.  Consumer protection, public health and safety are legitimate
concerns in regulating architecture and engineerin g.  However, such regulation may still constitute
barriers to entry in those services, if they are a pplied in a restrictive manner, making it difficult for
foreign professionals to access the market.  Measures  which affect the establishment of firms and the
mobility of natural persons directly affect market access in those services.
19. Some specific observations whic h could be made from the survey results may be the following:
- Regulation on access to the prof ession or the professional title
It appears that the engineering profession is in ge neral less regulated than architecture.  In those
countries in which architectural  and engineering services are regulated, national governments
often regulate the professions, but in some count ries, subnational governments or self-regulatory
bodies exercise regulatory authority.
- Main qualifications or licensing requirements
For architects, it appears normal to require 4–5 y ears of University education plus 2–3 years or
more of practice.  A number of countries also apply professional examinations.  The
requirement for engineers seems to be similar, but somewhat lighter than for architects in some
countries.
- Membership in professional associations
                                             
16A summary of the survey of measures, as well as their details, are available in document S/WPPS/W/4, and
its addenda, Add.1 and Add.2, presented to the Working Party on Professional Services.  The additionalinformation collected for the Third Workshop was made available to WTO Members in an informal workingdocument (Job.1441). The Workshop papers, records of discussions, and conclusions have been subsequentlypublished in "OECD Documents, International Trade in Professional Services–Assessing Barriers and
Encouraging Reform", 1996, and "OECD Proceedings, International Trade in Professional Services– advancing
liberalization through Regulatory Reform", 1997.S/C/W/44
Page 7
In those countries which regulate the archit ectural and engineering professions, compulsory
membership in professional associations is quite commonly required.  In the small number ofcountries applying self-regulation by the prof ession, membership in professional associations
are normally obligatory. 
- Scope of activities
As mentioned briefly above, certain architectural  services, such as "requests for construction
permits" and "technical control of certification" are frequently reserved to architects or special
categories of architects, while "design and pl anning" and "obtention of permits" are often
reserved to specific practitioners in engi neering services. "Topographic determination,
demarcation, and surveying" is generally reserved to surveyors.
20. Some observations which could be made from the OECD categorized inventory of measures
affecting trade in architectural and engineering servi ces, as compared to other professional services, may
be summarized as follows:
- Measures limiting or excluding the right to in corporate for professionals are relatively less
frequent for architects and virtually non-existent for engineers.
- Recognition of foreign qualifications is most adva nced in engineering and to a lesser extent in
architecture, where in a numbe r of countries licensing requirements are lifted for foreign
professionals having obtained practice authorization in their home country.
- Local presence requirements are fre quent for architects and engineers.
- Measures to facilitate temporary or occasional pr actice, such as temporary licensing procedures
can be found for architectural  and engineering services.
- Requirements for in-house provision of archit ectural and engineering services have been
identified as one of the obstacles affec ting international competition in government
procurement.
- Fee-setting regulations, sometimes only indicative,  occur in the architectural and engineering
services sectors.
 21. It has been pointed out that difficulties for foreign professionals would normally arise from non-
recognition or limited acknowledgement of home country education, qualification or
accreditation/licenses; nationality and residency require ments; restrictions on in corporation; restricted
eligibility for contracts including government procur ement contracts; and prohi bition of advertising etc.
for ethical reasons.
17 Compulsory partnership with local prof essionals is sometimes required.  The
reasoning behind such regulations would be the need to maintain the quality and standard of the service
provided, and to ensure a good understanding of cu ltural and other factors peculiar to the market in
exercising the profession.
22. On the other hand, a majority of architects wo rk as independent professionals, and the very
small scale of businesses, lack of adequate training  in international matters, unfamiliarity with foreign
markets, as well as cultural and regional impedime nts may already cause difficulties for those hoping to
enter foreign markets.  Overly burdensome regulati on could have a disproportionately large impact on
                                             
 17See, for example, H. Nourissat, Architectural Services, in OECD, op.cit. , 1996.S/C/W/44
Page 8
foreign professionals in such circumstances. Even  when countries recognize or acknowledge foreign
qualifications or licenses, case-by-case judgement ma y be applied, which could give rise to uncertainty
or be time-consuming.  Professional associations could, in certain circumstances, behave in an anti-
competitive manner and attempt to protect the in terests of incumbent professionals from outside
competition.
23. For firms, restrictions on foreign direct inve stment and ownership, re quirement of a minimum
number/percentage of local directors/managers/staff,  restrictions on the international relationship of
locally established firms, and restrictive govern ment procurement policies have been raised as
impediments.18
24. As a means to address those difficulties, regi onal and bilateral efforts to facilitate access for
foreign architects and engineers have made substantia l progress in recent years.  Within the context of
regional economic integration, the European Uni on and the European Economic Area introduced the
principle of free movement of professionals  and the mutual recognition of diplomas.
Directive 85/384/EC of 10 June 1985, the "architects" directive, implemen ts this principle.  Under this
Directive, as subsequently amended, each EU Member  State recognises the di plomas, certificates and
other evidence of formal qualifications awarded in th e field of architecture by  other Member States to
nationals of Member States.
25. The NAFTA (North American Free Trade Agr eement) (Chapter 12) does not provide for
automatic recognition of professional titles obtained in other NAFTA parties.  However, it contains
certain disciplines, such as objectivity and transparen cy, pertaining to the li censing and certification of
professionals, and a commitment to eliminate any citiz enship or permanent residency requirement that a
party maintains for the licensing or certification of pr ofessional service providers of another party.  If a
party does not comply with this obligation, any othe r party may maintain an equivalent requirement.19 
The NAFTA also encourages the relevant bodies in  their respective countries to develop mutually
acceptable standards and criteria for licensing and certification of professi onal service providers.20  I n
this context, a mutual recognition agreement for temporary and permanent licensing of engineers,
recognizing equivalent professional qualificati ons, was signed in 1995 between the professional
representatives of the NAFTA Parties, which mutua lly recognizes professional qualifications of these
countries for engineers.21
26. A large number of countries have notified mutual recognition agreements under the GATSArticle VII:4 which requires notification of existin g recognition measures.  Most of these agreements
                                             
 18See, for example, T. Connor, Engineering Services, in OECD, op. cit ., 1996.
19NAFTA Article 1210.3.
20Annex 1210.5 of the NAFTA contains provisions on the development of professional standards for
professional services.  Specifically, the Parties to the Agreement "shall encourage the relevant bodies in  their
respective territories to develop mutually acceptable standards and criteria for licensing and certification of
professional service providers and to provide recommendations on mutual recognition" to the Free TradeCommission.  The Free Trade Commission will review the recommendation, and based on this review, each partyshall encourage its respective competent authorities, where appropriate, to implement the recommendation within amutually agreed time.
21"Mutual Recognition of Registered/Licensed Engineers by Jurisdictions of Canada, The United States of
America and the United Mexican States to Facilitate Mobility in Accordance with the NAFTA," described in aninformal communication from Canada to the WPPS dated 13 March 1996.S/C/W/44
Page 9
pertain to mutual recognition of  diplomas between governments,22 but a number of them relate to mutual
recognition of professional qualifications in acc ountancy and other areas between non-governmental
professional bodies.  Concerning ar chitecture and engineering, the inter-recognition agreement between
the U.S. and Canada (S/C/N/52) in architecture, a nd  the Washington Accord in engineering (S/C/N/53)
described below have been notified, which are both agreements between non-governmental professional
bodies.
27. Based on the United States – Canada Free Trade Agreement, the U.S. ar chitectural profession
concluded an agreement with their Canadian counter parts on a series of requirements for certification
applicable to U.S. and Canadian architects in 1994.  It is an agreement between the National Council of
Architectural Registrati on Boards (NCARB – a non-governmental, national federation of the official
registration boards in 55 U.S. jurisdictions) and the Committee of Canadian  Architectural Councils
(CCAC – a committee comprising all of the Canadian Provincial Architectural Associations).  It is
implemented by those states and provinces that ratify the agreement, and is implemented in a majority of
them.  At the UIA (Union Internationale des Architectes), the second edition of the Accord onRecommended International Standards of Professionalis m in Architectural Practice is currently being
developed, and is scheduled to be presented for adoption by its members in 1999.
23  I t  c o m p r i s e s
guidelines on 1) accreditation policy, 2) practical experience/training/internship policy, 3) practical
examination (demonstration of professional competen ce) policy, 4) registration/licensing/certification
policy, 5) ethics and conduct policy, and 6) continuing education policy.24
28. In engineering, the Washington Accord was signed in 1989 by professional bodies of six
countries (Australia, Canada, Irel and, New Zealand, United Kingdom, a nd United States).  Since then,
two more bodies have become signatories (Hong Kong , China, and South Africa).  Signatories to the
agreement recognize the substantial equivalency or  comparability of engineering education courses
leading to the first professional degree or basic e ducation in engineering (the "Accredited Engineering
Degree").  It does not, however, address the mutual recognition of professional credentials, such as the
Professional Engineer, or Chartered Engineer.25  In Europe, FEANI (Fédération Européene
d'Associations Nationales d'Ingénieurs) has established the title of EurIng, and has determined a processof assessment of individual engineer's qualifications  and practice experience. The model for EurIng is
based upon a minimum of seven years of qualifications, training and experience (the latter having to be
of at least two years).  Such developments in se lf-regulatory initiatives could lead to more rapid
international recognition of qualifi cations and practice competency.
29. In the APEC, work has started on the prepar ation of a directory on the requirements for
provision of professional services, with prior ity on accountancy, engineering, and architecture.
26  A large
number of bilateral agreements on recognition of pr actice standards in engineering have also been
concluded in the region.27 
                                             
22Work to this effect has been undertaken actively in the Latin American and Caribbean region.
23The first edition of this document was adopted by the General Assembly of the UIA in 1996.
24See document S/C/N/52.
25See document S/C/N/53.
26Convenor's Report, 21 February 1998, Fifth Meeting of the APEC Group on Services.
27See T. Connor, Engineering Services, in OECD, op. cit ., 1996.S/C/W/44
Page 10
V. NEGOTIATIONS ON ARCHITECTURAL AND ENGINEERING SERVICES AND
EXISTING COMMITMENTS UNDER THE GATS28
30. During the Uruguay Round of trade negotiations , a working group on professional services was
created to discuss the applicability to the professiona l services sector of the basic concepts developed
for the services agreement.  Two meetings were held in August and November 1990.29  To assist the
discussions, an illustrative list of accredited and non- accredited professional services was prepared by
the Secretariat.30  The purpose of the list was to help delegations to have a better idea of the professional
services where liberalization might take place by  means of mutual recognition, and those of non-
accredited services where liberalization might take place without recognition of qualifications.  It was
also pointed out that delegations should look at the question of labour  mobility in professional services
agreements and how the recognition of qualificati ons could help with cross-border movement of
personnel.  It was also pointed out that it was nece ssary to deal with the differences in the scope of
various practices between countries.  It was agr eed that, subject to furt her clarification and/or
elaboration of particular provisi ons of the framework relating to harmonization and mutual recognition
of regulations, standards or qualifications, there seem ed to be no need for any specific annex/annotation
with regard to professional services.31
 31. As a result of the Uruguay Round and subsequent accessions, 70 WTO Members32 made
commitments in at least one of the four subsectors co vered by this note.  The largest number of members
made commitments in engineering services ( 69 Members), followed by architectural services
(61 Members).  The other two subsectors, integrat ed engineering services, and urban planning and
landscape architectural services were committed by 43 - 44 Members.
32. With regard to the level of commitments, an an alysis can be done by making three distinctions; 
full commitments (no limitations, implying total liber alization), partial commitments (those made with
certain limitations), and no commitments (unbound).33  Looking at market access commitments of
countries in this sector, full commitments were ma de in 48 - 66 per cent of all commitments made for
the supply of services through commercial presence (mode 3) (Table 4).  These figures decline
substantially to 24-31 per cent when horizontal comm itments are taken into account.  For the presence
of natural persons (mode 4), which is important for those services, no Member had full commitmentwhen horizontal measures are taken into account.  These figures compare favourably with other
professional service subsectors, however, and i ndicate that relatively liberal commitments were
                                             
     28The following analysis of existing commitments under the GATS is based on information generated by the
electronic database currently under development in the Secr etariat, and needs to be co nsidered as preliminary. 
Commitments under the Agreement on Government Procurement (GPA) are not described, but most GPAsignatories have made commitments in architectural, e ngineering and other technical services belonging to CPC
Division 867.
     
29Minutes of these meetings are available in documents MTN.GNS/PROF/1 and /2.
30Distributed as document MTN.GNS/PROF/W/1.
31Indicated in MTN.GNS/W/110.
     32The numbers count the 15 Member States of the European Union individually.  Aruba and the Netherlands
Antilles have separate schedules, but are not counted separately.
     33Such a broad categorization of commitments is necessarily very crude and is intended only to evaluate in very
roughly the level of commitments made by countries.  In practice, a "partial" commitment could be infinitely closeto a full commitment if the limitation maintained is nominal;  on the contrary, it could be effectively close to"unbound" if the limitations are very broad and restrictive.S/C/W/44
Page 11
undertaken for architecture and engineering compared to legal or accounting services.34
33. Concerning the types of measures app lied, the most commonly observed market access
limitations specific to the sector were limitations on the type of legal entity allowed for commercial
presence (mode 3) of service suppliers, followed by limitations on the participation of foreign capital(Table 5a).  Restrictions on the number of natural persons to be employed were also common (mode 4).
 With regard to national treatment limitations, the most  prevalent were references to licensing, standards
and qualifications across all modes of supply.  Nationality and residency requirements were also
abundant (Table 5b), with the latter be ing more numerous than the former. 35
34. There are only a few MFN exemptions specific to  the architectural and engineering sectors, or
those which apply to professional services includi ng those sectors, but a number of Members apply
reciprocity in allowing foreign professionals to perform those services in their countries.36
35. Additional commitments were made by Republic of Korea and Malaysia in architectural and
engineering services.  They concern simplified exam ination procedures for foreign architects (Korea),
qualifying examination in English for architects a nd engineers (Malaysia), and a future commitment to
allow joint contracts between domes tic and foreign architects (Korea).
VI. SOURCES OF INFORMATION
36. Professional associations are the main sources  of information for the sector, including the
aforementioned UIA, ACE and FIEC  (Fédération de l'Industrie Européene de la Construction).37  Apart
from national associations in Member countries, se veral regional and federal professional associations
represented on the UIA Professional Practice Commission would also app ear to be important sources of
information, such as the African Union of Architect s, Architects Council of Eu rope, Architects Regional
Council of Asia, Pan-American Fe deration of Architects Associa tions, and the National Council of
Architectural Registration Boards of the U.S.A.38  As with construction services, a useful guide to
information sources is contained in a publica tion, "Information Sources  in Architecture and
Construction".39  Chapter Two of this publication is a guid e to associations, organizations and libraries
which can be used as information sources in the area of architecture and construction.
                                             
     34Among the subsectors of professional services, the proportion of full commitments in mode 3 (commercial
presence) for market access (taking into account the horizo ntal measures) was highest for integrated engineering
services and veterinary services (31 per cent) followed by  architectural services, engineering services, and urban
planning and landscape architectural services (24 per cen t).  In legal and accounting services, the corresponding
figures were 4 per cent and 9 per cent respectively.
     35It needs to be noted that such evaluation is not always straightforward, as a single measure may have restrictive
effects in several ways, or may not be easily classified due to its ambiguity or a large room for discretion.
36Some countries apply preferential treat ment to nationals or firms of other countries with historical links.
  
37The UIA and FIEC have offered their assistance in furthering the work of the Council.
38Sector-specific professional associatio ns also participate in associations of service industries or professional
service groups.  An example is the U.S. Coalition of Service Industries, which has a Professional ServicesWorking Group comprised of representatives of various pr ofessions.  The American Institute of Architects and
the American Consulting Engineers Council participate in  the Working Group.  This Working Group developed
a set of principles for mutual recognition of  professional service qualifications in 1996.
     
39Valerie J. Nurcombe ed., published by Bowker Saur, 1996 Second Edition .S/C/W/44
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37. As referred to above, the Organization fo r Economic Cooperation and Development (OECD)
has done extensive work in its Workshop on Professional Services concerning international trade inprofessional services including  architecture and engineering.S/C/W/44
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TABLES
Table 1:  International Trade in Ar chitectural and Engineering Services
1994 1995 1996
Receipts Payments Receipts Payments Receipts Payments
United States
(millions of U.S.$)
Construction, engineering,
architectural, and miningservices 2,474 280 2,848 339 2,990 489
Canada(millions of dollars)
Architectural and engineering
services
Construction services1,087
87292
2881,512
80363
2691,553
61419
79
European Union
(Trade with extra-EU)(millions of ECUs)
Architectural, engineering, and
other technical services
Construction services7,357
9,3413,790
5,0258,154
9,8024,356
5,886--
----
--
Sources: U.S. Department of Commerce, Survey of Current Business, October 1997; Statistics Canada, Canada's
International Trade in Services, 1996; Eurostat, International Trade in Services, EU, 1986-95.S/C/W/44
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Table 2a:  Sales to Foreign Persons by Foreign Affiliates of U.S. Companies (1994-5)
1994 1995
(in millions of U.S. dollars)
Engineering, architectural, and surveying services*
Construction services4,807
2475,619
236
*Sum of affiliates in Europe and Australia, due to suppression of other data.
Source: U.S. Department of Commerce, Survey of Current Business, October 1997.
Table 2b:  Sales to U.S. Persons by U.S. Affiliates of Foreign Companies (1994-5)
1994 1995
(in millions of U.S. dollars)Engineering, architectural, and surveying servicesConstruction services2,883
9553,018
998
Source: U.S. Department of Commerce, Survey of Current Business, October 1997.S/C/W/44
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Table 3: Billings of the Top 200 International Design Firms in 1996, by Regional Market ($ millions)
Region   1996   1995   1994
Africa   1,168.7     907.2     1,177.9
Asia   4,507.1   3,527.7     3,326.8
Canada     384.2     254.5     267.6
Europe   4,414.0   3,419.5   3,170.5
Latin America     1,099.8     826.0     872.8
Middle East   1,292.7   1,045.0   1,019.7
United Sates   1,570.8   1,005.6   1,322.3
Total 14,458.1  (+32 %) 10,985.5 (- 2 %)   11,157.6
Note: The figures in brackets show the annual growth rates in percentage points.
Source: Engineering News - Record, The 1997 Inte rnational Construction Sourcebook and http:// www.enr.comS/C/W/44
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Table 4:Analysis of Commitments made by Members in Architectural
and Engineering Services
(Percentages of full, partial and no commitmen ts by sub-sector and by mode of supply)
Market Access
(Number of Members
with Commitments)Cross-border
SupplyConsumption
AbroadCommercial
PresencePresence of
Natural Persons
FPN FPN FPN FPN
Architectural Services
(61)60
5218
2622
2276
6812
2012
1248
2448
72 4
46
086
92 8
8
Engineering Services
(69)57
5021
2822
2264
5519
2817
1752
2445
723
35
090
955
5
Integrated Engineering
Services
(43)72
599
2219
1978
669
2213
1366
3125
599
96
088
946
6
Urban Planning and
LandscapeArchitectural Services
(44)55
4527
3618
1861
5227
3612
1245
2452
733
33
094
973
3
Notes:1. F: Full commitment (indicated by "none" in the market access column of the Schedule)
P: Partial commitment (limitations inscribed in  the market access column of the Schedule)
N: No commitment (indicated by "unbound" in the market access column of the Schedule)
2. The figures in italics  indicate the percentages taking into account horizontal commitments  applicable to all
sectors in the schedule.S/C/W/44
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Table 5a: Analysis of the Types of Measures (Number of Measures in Architectural and
Engineering Services, Market Access)
Mode
Type of Limitation: 1234
N u m b e r  o f  S u p p l i e r s ----
Value of Transactions or Assets - - 1 -
N u m b e r  o f  O p e r a t i o n s ----
Number of Natural Persons 4 2 - 11
Types of Legal Entity 4 2 29 2
Participation of Foreign Capital - - 8 -
Other Measures n.e.c. 12 9 47 29
Table 5b: Analysis of the Types of Measures (Number of Measures in Architectural and
Engineering Services, National Treatment)
Mode
Type of Limitation: 1234
Tax Measures, Subsidies, Grants and
Other Financial Measures--1-
Nationality and Residency Requirements 18 10 27 22
Licensing, Standards, Qualifications 18 12 29 32
Registration Requirements 7 6 14 10
Authorization Requirements 6 - 1 -
Performance Requirements - 3 3 3
Technology Transfer Requirements - 1 1 -
Other Measures n.e.c. 11 15 15 13
Note: The number in "Other Measures n.e.c." is very large in these tables because a large number of entries in the
Schedules could not be classified into one or the other of the distinct categories of limitations.  In somecases, this was due to a lack of specificity in the description of the measure, while in others, it was becausethe measure itself did not correspond to any of the categories.S/C/W/44
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Annex
Issues for Discussion
1. Description of the Sector- Is the existing classification of architect ural and engineering services adequate?
- For engineering services, is there a need to cl arify the distinction between construction-related
engineering services and other engineering services?
- Where do the services provided by surveyors,  topographical engineers, construction economists
or similar professions belong?
2. Economic Importance of the Sector  and its Main Economic Features
- Are there other or better sources of informati on regarding international trade in architectural
and engineering services, and the size and im portance of the architectural and engineering
professions in national economies?
- Is there any data on the industry structure, such  as the average size and revenue of business
undertakings etc. for those subsectors?
- How important is the movement of pr ofessionals providing those services?
- Would it be correct to assume that mode 3 and mode 4 will still constitute the bulk of supply of
those services in the years to come?
- Given the high content of skilled labour in the supply of those serv ices, would developing
countries have comparative advantage in those services, now or in the future?
3. Regulatory Structure and Relevant Trade Restrictions
- What are the measures which are likely to have restrictive effects on trade in architectural and
engineering services?
- What are the stated objectives of those measur es?  What recent reforms have been undertaken
in Member countries in relation to such measures?
- What is the rôle of professional associations or other bodies for these subsectors? Is there a self-
regulatory rôle for these bodies?  If yes, what are they?  Is there any potential for conflicts of
interest between the rôle of those bodies as regu lators and the rôle as industry representatives?
- Are there any issues of competition policy pertaining to these subsectors?
- Are there any other issues such as transparen cy, government procurement, subsidies which are
relevant to trade in those services?S/C/W/44
Page 19
4. Mutual Recognition- Is there more information on mutual recognition agreements or arrangements in architecture
and/or engineering, or in professional servi ces including architectur e and/or  engineering?
- Is mutual recognition more common in the context of regional economic integration, or as
individual agreements or arrangements?  Which are becoming more common, agreementsbetween governments or between non-governmental  bodies such as professional associations?
5. Negotiations on Architectural and Engineering Services and Existing Commitments under the
GATS
- What were the principal interests of negotia tors during the Uruguay Round concerning those
subsectors?
- What are the main issues in domestic regulation pertaining to these s ubsectors of professional
services?
- What are the measures which limit market access or national treatment in Members' schedules?
 For which modes of supply ar e those measures scheduled?
- Are there any other measures which could have trade-restrictive effects?
6. Sources of Information- What other useful sources of information are available, especially for non-OECD countries?
__________