Barriers to International Trade in Professional Services

7/31/2019 Barriers to International Trade in Professional Services

1/49

UNIVERSIDAD DE CHILE FACULTAD DE DERECHO

MAIN BARRIERS TO INTERNATIONAL TRADE IN

PROFESSIONAL SERVICES, WAYS OF LIBERALIZATION

Thesis to choose to the degree of Master in International Law(LL.M. INT), Investments, Trade and Arbitration.

LL.M. Int. Student: Gerardo Coppelli Ortiz.Thesis Advisor: Francisco Javier Prieto.

Santiago, ChileMarch 2008


2/49

TABLE OF CONTENTS

MAIN BARRIERS TO INTERNATIONAL TRADE IN PROFESSIONAL

SERVICES. WAYS OF LIBERALIZATION .

INTRODUCTION .. 6

CHAPTER I 8NOTIONS OF THE INTERNATIONAL TRADE IN SERVICES IN

GENERAL AND OF THE INTERNATIONAL TRADEIN PROFESSIONAL SERVICES IN PARTICULAR.

1.- Brief historic description of the international trade in services. 8

2.- International trade in services: Concept. 92.1 Entrepreneurial definition .. 102.2 Statistical definition . 102.3 Political definition.... 10

3.- International trade in services: Classification.. 11

4.- The multilateral norms.... 124.1 The General Agreement on Trade in Services (GATS). 124.2 The Free Trade Agreements (FTA)... 13

5.- Current state of international trade in services.... 14

6.- International Trade in Professional Services in particular ............ 17

II


3/49

CHAPTER II 20BARRIERS TO THE INTERNATIONAL TRADE INPROFESSIONAL SERVICES.

1.- General concepts regarding this issue 20

2.- Market access and national treatment........ 212.1 Market Access ....... 212.2 National treatment... 23

2.2.1 Tax barriers. 23

3.- Other barriers to the international trade in professional services 243.1 Geographical distances... 243.2 Barriers of immigration and granting of visas...... 243.3 Customs barriers.. 253.4 Trade in services regulation.... 263.5 Quality certification...... 26

CHAPTER III 27

DIFFICULTIES ON THE INTERNATIONAL TRADE IN PROFESSIONALSERVICES AS A CONSEQUENCE OF DOMESTIC REGULATION.

1.- Domestic regulation...... 27

2.- Credentials, licenses and permits... 28

3.- Sectoral barriers to the international trade in professional services.. 293.1 Accountability services.... ... 293.2 Legal services..... 293.3 Services in engineering.. 303.4 Services in architecture.. 30

III


4/49

CHAPTER IV 31THE INTERNATIONAL TRADE ON PROFESSIONAL

SERVICES LIBERALIZATION1.- Different formulas for liberalization....... 31

1.1 Professional services liberalization proposals... 321.1.1 Free movement of persons and professional regulation 321.1.2 Tax barriers. . 331.1.3 Problems regarding information transparency 331.1.4 Social sequirity.. 33

1.2 Liberalization of the professional services in the light of the GATS 34

1.2.1 National Treatment Principle.. 341.2.2 Most Favoured Nation Treatment.. 35

1.3 Proposals of liberalization on the part of the WTO Members. 35

2.- The European Union as a model of liberalization... 39

CONCLUSIONS . 40

BIBLIOGRAPHY ... 43

IV


5/49


6/49

INTRODUCTION

The international trade in professional services represents one of the mostimportant productive areas for the worlds economy, probably not in monetary numbers,which anyway are the highest, but rather in qualitative terms, the personal developmentof the individuals who exercises this type of trade, often in an independent way witheffort and great dedication. This issue is the one that has been wanted to be rescued inthis thesis, which in general terms it consists in identifying, both quantitatively andqualitatively, which are the main and more important barriers, obstacles and restrictions

that affect the international trade in services, specifically in professional services, tothen develop some ways of liberalization. Along with the above mentioned there will bea general analysis of the international trade in services, including basic definitions,classification and importance, among other topics.

The general objective will be to identify, describe and systematize, the differentbarriers, obstacles and restrictions to the international trade in professional servicesthereby, indicating, different ways of liberalization.

Besides developing the general objective of the present thesis, diverse specificobjectives will be worked, namely, describing the different aspects that characterize theinternational trade in services in general, along with definitions, importance, historicalscope, classification, among others; explaining what the professional services areabout, specifically, within the greater classification of international trade in servicesunderstood in the light of the World Trade Organization (WTO); developing each of theidentified obstacles; distinguishing the different barriers to be found in the international

trade in goods vis a vis the barriers to be found in the trade in services; analysing thedomestic regulation established by different legislations and agreements; identifyingand describing different ways of liberalization of the international trade in professionalservices, respect to barriers and domestic regulation as well.


7/49

It is difficult then, to the parties interested in developing trade in professionalservices worldwide to identify the obstacles that they will have to face. These are

spread in texts under different legislations and without a clear norm that standardizesthem. Thus, this work intends to facilitate the work of identification of the barriers andexisting obstacles in an agile and easy way to deal with, being useful to those whohappen to be conflicting, day after day, to limitations of different nature, which prevent acomplete development of this type of trade.

Knowing the central aspects of the present thesis has countless advantages,like for example, by recognizing the different barriers and obstacles, the future lender of

the professional service will be able to better plan the ways to follow for thedevelopment of the claimed service. Additionally, it is paramount the analysis of thedifferent ways of liberalization of the international trade in services, that from both, anacademic and a practical point of view, is quite relevant nowadays and that will beanalysed in detail through this work.

Under a descriptive model, the methodology of work will aim, mainly, to theanalysis of legal texts and doctrine and the analysis of forms of work issued by different

countries. The regulation of this subject matter within the WTO deserves a fundamentalanalysis. After a specific analysis, a compilation of the obtained information will bemade, along with offers of liberalization.

2


8/49

CHAPTER I

NOTIONS OF THE INTERNATIONAL TRADE IN SERVICES IN GENERAL AND OF

THE INTERNATIONAL TRADE IN PROFESSIONAL SERVICES IN PARTICULAR.

Although the main topic of study of the present work is aimed to thedevelopment and the investigation of the international trade in professional services, itis necessary to introduce it by doing an analysis to the international trade in services inits wider concept and in its different areas.

Because of this reason, we will make a brief historical tour of the internationaltrade in services; we will acknowledge some of its different definitions; we will enter, ina general way, within its main classifications, besides knowing the most importantmultilateral regulation in this matter, among other relevant topics related to it.

1. BRIEF HISTORIC DESCRIPTION OF THE INTERNATIONAL TRADE IN SERVICES.

We do not need to go back in time for too long to find the genesis of theinternational trade in services, unlike the trade of goods that we can associate to thebeginnings of time. The most remote records of the international trade in services areprobably found in the maritime transport and in finances, which are areas that forcenturies were opened to the trade, but they were not developed independently butrather as complements of the trade in goods.

Perhaps, during the last thirty years we find the history of the international tradein services on a more concrete, trustworthy and, most importantly, independent waythan other areas of the international trade.

3


9/49

During the last years the trade in services has significantly grown in the worldeconomy, all of which is mainly enhanced by the process of internationalization of

services. Due to the above mentioned, it arose the necessity to establish multilateralrules specific to the trade in services, not under the eaves of the trade in goods but inan independent way.

Thus in 1995, in the light of the World Trade Organization (WTO)1, it becameinto force the most important multilateral agreement for international services, namely,the General Agreement on Trade in Services (GATS), which will be analysed further indetail.

2. INTERNATIONAL TRADE IN SERVICES: CONCEPT.

When we talk about International Trade in Services it does not come to mind aclear or defined concept, which is probably due to the lack of a definition contained intreaties or agreements that regulate the matter, or probably because, since there is not

a uniform definition each author linked to this topic has desired to express a concept inthe best possible way which has redounded to countless definitions and concepts, thatmight have some truthful content, being some of them more complete that others.

Anyway, we must identify certain bosses or concepts that belong to them andthat must be present in any definition or commentary made on the international trade inservices.

Service is an economic intangible and invisible activity, which marks a deepdifference with the trade in goods, where there is production of physical goods.

1 World Trade Organization is an international organization that deals with the procedure thatgoverns the trade between nations. The goal is to help the producers of goods and services, theexporters and the importers to taking forward their activities.(available at: http://www.wto.org/english/thewto_e/whatis_e/whatis_e.htm)

4


10/49

Service is an activity that produces achange in the conditions of a person or ofa good as a result of an agreement between producer and consumer.2

Next, a number of definitions that respond to a sectoral criterion of the

international economy will be exposed:

2.1 Entrepreneurial definition.

This entrepreneurial definition of the concept International Trade in Servicescontains a wider conception of trade. This definition takes as a fundamental base thenationality of the producing company. 3 In a world where companies compete forestablishing their international market share - not for establishing their exports from thecountry of origin - makes the concept approach to the international trade realitycommonly known by us today.

2.2 Statistical definition.

The professionals specializing in the statistical area define the exports of

services as services that are sold to residents of other countries, and they defineimports of servicesas services that they buy to residents of other countries .

For the worshippers of this definition,trade is the sale of a value to an individual and the services are any economic activity that does not lead to a new product as a

result. 4

2 PRIETO, Francisco Javier, Material of support of classes on International Trade in Services.Master in International Law, Investment, Trade and Arbitration. University of Heidelberg.Santiago de Chile: 2007.3 FEKETUKY, Geza.International Trade in Services. First edition. Ed. Gernika S.A, Ciudad deMxico: 1990.4 FEKETUKY, Geza.International Trade in Services. First edition. Ed. Gernika S.A, Ciudad deMxico: 1990.

5


11/49


12/49

Classification of the Services 5

1. Services given to the companies and professional services Services of accounting Services of advertising Services of architecture and engineering Services of computer science and connected services Legal Services

2. Services of communications3. Services of construction and connected services4. Distributions services5. Services of education6. Environmental services7. Financial services8. Social services and health.9. Services of tourism and travel10. Services of scattering, cultural and sports11. Services of transport12. Other services not classified in other section of the list

The article 1, number 2 of the GATS, establishes that according to the way in whichthese services are given, four manners of renderings have been catalogued:

1. Cross-border supply : From the territory of one Member into the territory of any other Member . For example, services of telecommunications or services distantly.

2. Consumption abroad : In the territory of one Member to the service consumer of any other Member . For example the tourism.

3. Commercial presence : By a service supplier of one Member, through commercial presence in the territory of any other Member . For example hotel chains.

4. Presence of natural persons: By a service supplier of one Member, through presence of natural persons of a Member in the territory of any other Member. 6 Forexample medical services.

The latter category is very important to the professional service.

5 WTO, GATS. MTN.GNS/W/120.Sectoral Services Classification List: 19916 WTO, General Agreement on Trade in Services. Article 1, N 2: 1995.

7


13/49

4. THE MULTILATERAL NORMS.

Within the multilateral regulation of the international trade in services,undoubtedly the most important agreement in force is the General Agreement on theTrade in Services. Certainly the latter is not the only one due to other types ofagreements containing rules on the trade in services have lately gained a lot ofimportance, namely, the Free Trade Agreements, also known as FTAs.

It is important to indicate that through the present work, and in different

chapters, it will be analysed in detail the different variables of this regulation; next wewill only analyse its most relevant aspects.

4.1 The General Agreement on Trade in Services (GATS).

This agreement is the first trade multilateral agreement that includes the trade inservices. Its redaction was one of the big achievements of the Uruguay Round.7

Several years of negotiations had to pass to reach this agreement, which among

its most basic objectives we found the adaptation of the disciplines of the trade in goodsto the international trade in services.

In order to reach this agreement, the main working topics of the negotiating groupswere:

1) The creation of a multilateral framework of principles and procedure applicable tothe trade in services.

7 The Uruguay Round represents the most recent process of multilateral negotiations,inaugurated in September, 1986 and concluded in 1993. The objective of this Round was tocheck, update and extend the scope of the General Agreement on Tariffs and Trade (GATT).(Available in: http: // www.economia.cl/aws00/servlet/aawsconve r? 1, 500499). From this roundthe World Trade Organization was born.

8


14/49

2) A wider scope of the trade in services in conditions of transparency and progressiveliberalization and,

3) The promotion, by means of the liberalization of the trade, of the economic growthof the parties.8

This agreement is applicable to all of the sectors of services, with the exception of two:

1) The paragraph 3 of the article I of the GATS excludes services supplied in the exercise of governmental authority . They are services neither given in commercial

conditions nor in competition with other suppliers. As examples of this we find thesystems of social security and any another public service, such as health oreducation, which are not lend in conditions of market.

2) Besides, the Annex on Services of Air Transport establishes that the Agreement isnot applicable to the measures that affect both the rights of air traffic and theservices directly related to the same ones.9

4.2 The Free Trade Agreements (FTA).

Like GATS the FTAs are trade agreements celebrated regionally or bilaterally tostretch the market of goods and services among the signatory countries.

The fundamental objective of the FTAs is to eliminate or reduce the duties forgoods between the parties, and to reach agreements regarding services.

The general rule is that a FTA looks for the reciprocal extension of the markets

of the parties by means of the elimination of customs duties and burdens that affectexports and imports. It also seeks the elimination of the non-tariffs barriers, thesubsidies to the agricultural exports, and the liberalization of commerce, the

8 World Trade Organization, web site.(Available at: http://www.wto.org/english/tratop_e/serv_e/serv_e.htm); January 2008.9 World Trade Organization, web site.(Available at: http://www.wto.org/english/tratop_e/serv_e/serv_e.htm); January 2008.

9


15/49

restructuring of rules and customs procedures to speed up the pass of commodities andto unify the phytosanitary procedures and procedures of other nature.10

Regarding the professional services, the FTAs contain annexes which objective

is to harmonize the measures that rule the services by means of the granting ofauthorizations and dispositions for the professional exercise. The provisions of theseannexes seek to guide the competent organs of the parties to develop and harmonizetheir procedures for the acknowledgement of professional titles and services in general.

These annexes establish the bases in order to the competent authorities

elaborate the procedure and the needed criteria for the authorization of the professionalexercise.11

5. CURRENT STATE OF THE INTERNATIONAL TRADE IN SERVICES.

Currently, the international trade in services represents an important percentage

of the international trade, about 20 % of the world trade,vis a vis the 80 % that goodsrepresent in the world trade.

According to recent statistics of the World Trade Organization, the internationalflows of trade of goods and services experienced the following evolution between 2000and 2006:

10 De Ford, Federico Valerio, El Comercio de Servicios en los Tratados de Libre Comercio.(Available at:http://www.comex.go.cr/difusion/ciclo/2001/fvalerio.pdf); December 2007.11 De Ford, Federico Valerio, El Comercio de Servicios en los Tratados de Libre Comercio.(Available at:http://www.comex.go.cr/difusion/ciclo/2001/fvalerio.pdf); December 2007.

10
http://www.comex.go.cr/difusion/ciclo/2001/fvalerio.pdfhttp://www.comex.go.cr/difusion/ciclo/2001/fvalerio.pdfhttp://www.comex.go.cr/difusion/ciclo/2001/fvalerio.pdfhttp://www.comex.go.cr/difusion/ciclo/2001/fvalerio.pdf


16/49

World Trade in goods and services (percentages) 12

2000 2001 2002 2003 2004 2005 2006

World exportation of goods 81,2 80,5 80,1 80,4 80,6 81,0 81,4World exportation of services 18,8 19,5 19,9 19,6 19,4 19,0 18,6

Total exports goods and services 100 100 100 100 100 100 100

World import of goods 82,0 81,2 81,0 81,3 81,7 82,0 82,4World import of services 18,0 18,8 19,0 18,7 18,3 18,0 17,6

Total imports goods and services 100 100 100 100 100 100 100

With similar growth rates during the current decade, the flows of trade both ofservices and goods kept its participation with variations close to 1%.

Annual growth rates of world trade in goods and services (percentages) 13

2000 2001 2002 2003 2004 2005 2006 Average

World exports of goods 13,0 -4,1 4,8 16,8 21,5 13,7 15,4 11,0%World exports of services 6,2 0,4 7,3 14,6 20,1 11,1 12,1 10,7%

Total exports goods and services 11,7 -3,3 5,3 16,4 21,2 13,2 14,8 11,0%

World imports of goods 13,6 -3,6 4,0 16,6 21,6 13,4 14,5 10,8%World imports of services 6,5 1,2 5,8 14,0 18,8 10,9 11,3 10,2%

Total imports goods and services 12,3 -2,7 4,4 16,1 21,1 13,0 13,9 10,7%

In 2006, the exports of services represented 18.6 % of total exports, growing inan average annual rate of 10.7 % between 2000 and 2006. On the other hand, goods

12 World Trade Organization, web site.(Available at:http://www.wto.org/english/res_e/statis_e/its2007_e/its07_world_trade_dev_e.htm); January 2008.13 World Trade Organization, web site.(Available at:http://www.wto.org/english/res_e/statis_e/its2007_e/its07_world_trade_dev_e.htm). January2008.

11
http://www.wto.org/english/res_e/statis_e/its2007_e/its07_world_trade_dev_e.htm);%20januaryhttp://www.wto.org/english/res_e/statis_e/its2007_e/its07_world_trade_dev_e.htmhttp://www.wto.org/english/res_e/statis_e/its2007_e/its07_world_trade_dev_e.htmhttp://www.wto.org/english/res_e/statis_e/its2007_e/its07_world_trade_dev_e.htm);%20january


17/49

represent 81.4 % of the exports in the same year, with an average annual growth rateof 11.0 % between 2000 and 2006.

Regarding imports, the services constituted 17.6 % with an average annualgrowth of 10.2 % for the same period. Goods, on the other hand, represented 82.4 %with an average annual growth of 10.8 %.14

Making an analysis of the just exposed figures, particularly within the services

area, it is possible to estimate that between 2000 and 2006 exports of services grew in1.8 times, being those correspondent to other commercial services the ones that

reached the highest dynamism.

The exports of services of transport, in turn, increased in 1.8 times in that period,slightly diminishing in 2006 its participation in the total exports of services, whichreached 22.9 %.

The incomes resulting from international travel increased in the period in 1.5times, diminishing its participation in 3% during the period to finally reach 27.1 % in

2006, while exports of other commercial services increased in 2.1 times between 2000and 2006, showing as of 2003 a great dynamism.15

As we have been able to assess, the participation of services in international

trade is lower than that of goods. Many are the reasons that explain this, for example,the barriers and domestic regulations, which is a subject matter that will be analysedfurther as important barriers and difficulties to the trade in professional services.Furthermore, many services have not yet been commercialized in an international

arena, be it because of the lack of knowledge or information with regard to the way todeveloping such business. Considering this and developing strong multilateral policies

14 Ministry of Foreign Affairs of Chile, General International Economic Affairs Department. Maines caractersticas y dinamismo del comercio mundial de servicios. Santiago de Chile: 2008.15 Ministry of Foreign Affairs of Chile, General International Economic Affairs Department. Maines caractersticas y dinamismo del comercio mundial de servicios. Santiago de Chile: 2008.

12


18/49


19/49

grant of liberal access to markets of these services is indispensable to attract directforeign investment and to promote the transference of knowledge.18

The professional services, classified within the services given to the companies

(in the classification W/120) and mainly given by means of natural persons' presence inthe territory of another Member (number 4 of the manners of supply established in thearticle 1, number 2 of the GATS), are the following:19

1. Legal services.2. Services of accounting, auditing and bookeeping services.

3. Taxation Services.4. Architectural services.5. Engineering services.6. Integrated engineering services.7. Urban planning and landscape.8. Medical and dental services.9. Veterinary services.10. Services provided by midwives, nurses, physiotherapists and para-medical

personnel.11. Other.

As we can assess, the professional services are as wide as heterogeneous, butthey represent an important set of renderings of services, which growth is increasinglydynamical.

Its characteristics differ substantially from one sector to the other. The sector of

the legal services, for example, has registered a constant growth in the last decades,due to the increase of the international trade and the appearance of new spheres ofactivity, especially in the sector of the economic law. The profession has been

18 WTO, S/CSS/W/33. Communication of the European Communities and its Member States tothe Council for Trade in Services. Series of extraordinary meetings. GATS 2000: ProfessionalServices, Geneva: 2000.19 WTO, AGCS. MTN.GNS/W/120. Services Sectoral Classification List: 1991.

14


20/49


21/49

CHAPTER II

BARRIERS ON THE INTERNATIONAL TRADE IN PROFESSIONAL SERVICES

Before getting to know and to analyze some of the different barriers to theinternational trade in professional services, it is important to dedicate some lines todetermine what the barriers to the services are in general.

1. GENERAL CONCEPTS REGARDING THIS ISSUE.

A barrier to the international trade of services might be defined as a measure ofa State that creates an obstacle or difficulty to the sale of services produced in a foreigncountry.22

These barriers have a narrow link with the ways of rendering, for example, the

access of the lender or consumer to a certain market, ruling provisions or thequalification for the rendering of a service, requirements of local presence, migratorycategories, etc.

Often, certain measures of the countries tend to disable the flow of money,information, persons or goods creating barriers or difficulties to the trade of services,since they limit the means to transfer these services internationally.

We find punctual limitations in, for example: the barriers to the international flowof information that create obstacles to the international trade of services whenprocessing data and information that depend on the former. The restrictions to travel

22 FEKETUKY, Geza.International Trade in Services. First edition. Ed. Gernika S.A, Ciudad deMxico: 1990.

16


22/49

give way to barriers for the trade in tourism, education and professional services,among others, which depend essentially on the movement of people.

With regard to the limitations to the movement of people, they originate a certainobstacle to the trade in professional services for the useful and necessary personalcontact between the exporter and the foreign client.

The barriers to the international trade in services are clearly not found in thecustoms, due to that, as we indicated in the previous chapter, barriers are intangible,invisible. They must be created only in case a State can keep control of them. For

example, the buying of foreign currency to pay imported services; the movement ofpeople, information and capitals across borders; the employment of foreign workers ofthe services sector in the importer country.23

2. MARKET ACCESS AND NATIONAL TREATMENT.

When referring to the concepts of market access and national treatment, wementioned the possibility that Member Countries have to adapt the entry conditions andmarket share to its objectives and limitations in specific sectors. Therefore, theyessentially constitute an express authorization for establishing barriers to the market ofservices. This way, countries can attach limitations to the commitments to reserve theright to apply measures incompatible with the full market access and the nationaltreatment.24

These concepts belong to the chapter of specific commitments of the GATS,which consist of the obligation of the Members to assume particular commitmentsrelated to the market access and to the national treatment.

23 FEKETUKY, Geza.International Trade in Services. First edition. Ed. Gernika S.A, Ciudad deMxico: 1990.24 WTO. Introduction to the General Agreement Trade on Services: 2006.(Available at: http://www.wto.org/english/tratop_e/serv_e/serv_e.htm); December 2007.

17


23/49

2.1 Market Access.

Article XVI of the GATS defines Market Access as the duty of the Members togrant services and service suppliers of any other Member treatment no less favorable than that provided for under the terms, limitations and conditions agreed and specified

in its Schedule. 25

Like the national treatment, the market access is treated in the GATS in a

flexible way, allowing Members to adapt the entry conditions and market share to theirobjectives and limitations in specific sectors.26

The provisions of the GATS regarding market access, established in the Article

XVI, include six types of restrictions that shall not be maintained if limitations have notbeen recorded. The above mentioned restrictions refer to the following factors:

a) Suppliers' number of services;b) Value of the assets or transactions of services;c) Number of operations or quantity of the production;d) Number of natural persons that they give a service;

e) Type of legal person or of joint venture;f) Participation of the foreign capital.

These measures, except letters e) and f), are not necessarily discriminatory, thatis to say they can affect services or suppliers of services both national asforeigners.27

The lists of commitments regarding the market access are negotiated as

multilateral packages, although it is needed that rounds of bilateral negotiation be held

in order to elaborate the packages. These commitments will contain the negotiated andguaranteed conditions that will give way to the international trade in services. If a

25 WTO, General Agreement on Trade in Services. Article XVI: 1995.26 WTO. Introduction to the General Agreement Trade on Services: 2006.(Available at: http://www.wto.org/english/tratop_e/serv_e/serv_e.htm); December 2007.27 WTO. Introduction to the General Agreement Trade on Services: 2006.(Available at: http://www.wto.org/english/tratop_e/serv_e/serv_e.htm); December 2007.

18


24/49

registered condition is changed to the detriment of other Members, the Member mustwarn at least with three months in advance and it shall negotiate compensation with the

affected countries. Anyhow, the commitments can be improved at any moment.28

2.2 National treatment.

This principle is embraced by Article XVII of the GATS. When we speak ofnational treatment, we are saying that the suppliers of foreign services will not besubject to discriminatory measures that alter their conditions of competition before thenationals of the final country; in other words, the national treatment consists of treating

the nationals and the foreigners equally. Regarding services, this means that once aforeign company has been authorized to render services in a country, there should notbe any discrimination between the foreign companies and the national ones.

According to the provisions of the GATS, a country only will be able to apply thisprinciple when it has assumed a specific commitment to offer access to its market ofservices to the foreigners. It will not be bound to apply the national treatment in sectorsin which it has not assumed commitments. Even in the case of existent commitments

the GATS allows certain limits with respect to the national treatment.

This situation contrasts with the way in which the principle of the nationaltreatment is applied to goods; in these cases, once a product has crossed the borderand has passed through customs, it must receive national treatment even when theimporter country has not assumed any commitment to bind the tariff in accordance withthe WTO.29

28 CEPAL.Manual para la preparacin del cuestionario sobre las medidas que afectan al comercio de servicios en el hemisferio . Divisin de Comercio Internacional y financiamiento parael desarrollo, unidad de comercio internacional: 1999.29 CEPAL. Manual para la preparacin del cuestionario sobre las medidas que afectan al comercio de servicios en el hemisferio . Divisin de Comercio Internacional y financiamiento parael desarrollo, unidad de comercio internacional: 1999.

19


25/49

Within the barriers of national treatment, we must underline those of tax orderwhich are explained as follows:

2.2.1 Tax barriers.

Different rules of taxation order of the countries, which sometimes we mightadmit as legitimate, in many cases make difficult the trade in professional services.Regarding trade in goods we know that the tariffs known as customs taxes are pivotal,and regarding trade in services, the taxes affecting them are mainly the Income Taxand the VAT (Value Added Tax).30

The main problem is generated when the lender of the professional service

cannot deduce in his country taxes that were paid in another country, given thatbetween those States there is no any agreement authorizing so. This factor greatlyblocks the incentive to developing professional services between countries that havenot signed an Agreement of Double Taxation, which are the agreements thatauthorize the corresponding deduction of taxes, but that currently are not sufficientlymassive as to count on a professional service coverage that is not limited by this factor.

With respect to the Income Tax the problem aims the same aspect, that is tosay, the burden of paying levies for the profits obtained both in the country generatingprofits and in the country exporting the professional service.31

30 ALCA. Formulario FTAA.SOC/w/166. Comit de Representantes Gubernamentales sobre laparticipacin de la sociedad civil.: 2000.31 PIA Gonzlez, Joaqun. Globalizacin y Servicios. First edition. Ed. Lexis Nexis. Santiagode Chile: 2003.

20


26/49

3. OTHER BARRIERS TO THE INTERNATIONAL TRADE IN PROFESSIONAL

SERVICES.

Although some of barriers that we will indicate next will appear in Chapter IV ofliberalization again, it is necessary to mention them now to then knowing the proposedways of liberalization for some of them.

3.1 Geographical distances.

One of the main barriers to the international trade in professional services is thedistances among markets. Unlike goods, where through a mean of transportation theproduce is sent and sold abroad, services rendered by professionals, in general, requirethe movement of persons to be done. Under this circumstance, it appears thedisadvantage of the geographical distance that has to be covered and the expensesthat must be considered in order to set off and operate the rendering of services.

3.2 Barriers of immigration and granting of visas.

The incorporation of especial permits for professionals in the FTAs has come tosolve, in part, the problem of the granting of visas and work licenses. Professionalshave always needed to request these permits or visas to develop an activity abroad,and in some cases, even without the possibility of exercising their profession due to aprohibition resulting from the domestic order of each country. Some FTAs haveincorporated especial chapters dedicated to the movement of persons, includingprofessionals who are granted a special treatment after entering the territory of another

party.

Thus, for example, in the FTA between Chile and the United States, Annex 11.9,Professional Services, Section A - General Provisions, Development of ProfessionalStandards:

21


27/49

1. The Parties 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 Commission. 32

Along with the above mentioned, Chapter Fourteen, Temporary Entry for Business,Persons, Article 14.1: General Principles:1. Further to Article 1.2 (Objectives), this Chapter reflects the preferential trading

relationship between the Parties, the mutual desire of the Parties to facilitate temporary

entry of business persons under the provisions of Annex 14.3 on a reciprocal basis and

of establishing transparent criteria and procedures for temporary entry, and the need to

ensure border security and to protect the domestic labor force and permanent

employment in their respective territories. 33

3.3 Customs barriers.

For the customs offices in the world, the incorporation of the services to theinternational trade has raised new challenges that have not been overcome efficientlyuntil today. The customs have been historically regulated to rule the needs of trade in

goods and not trade in services. This has generated the necessity to elaborate aspecial regulation that rules the matter.

One of the links of professional services and the rest of the services with thecustoms offices is the so-called exporter's qualification of services, by virtue of whichthe exporter of services requests to be recognized as such with the purpose ofobtaining a series of benefits that this condition gives to him, like for example, notpaying the VAT.34

32 Free Trade Agreement, Chile-United States: 2002.33 Free Trade Agreement, Chile-United States: 2002.34 PIA Gonzlez, Joaqun. Globalizacin y Servicios. First edition. Ed. Lexis Nexis. Santiagode Chile: 2003.

22


28/49

3.4 Trade in services regulation.

The lack of information on the domestic regulations of other countries is a factorto be considered as a barrier to the trade in professional services. This limitation canincrease the costs of investment in a considerable way when commissioning studiesthat give information about the regulation of the recipient country of the professionalservice, additional staff for its application, etc.

3.5 Quality certification.

In order to export a service, this certification of quality has paramountimportance, especially when the services are aimed to countries with more advancedstandards.

This certification transforms itself in a barrier to the trade in professionalservices, but in turn a challenge for the least developed countries, since they mustreach high levels of work to cover the most developed markets.

23


29/49

CHAPTER III

DIFFICULTIES ON THE INTERNATIONAL TRADE IN PROFESSIONAL SERVICES

AS A CONCEQUENCE OF DOMESTIC REGULATION.

Analyzing the domestic regulation, also known as national regulation is of greatimportance, since great part of the barriers to the trade of services we find them in thisarea.

Specifically, in the area of the professional services, the national regulations ofthe countries, the requirements of nationality and residence, the regulation for the grantof licenses and the procedure of qualification, besides the restrictions of the property orcertain forms of legal organization, they are some other barriers of the effective accessto the market in almost all the countries. Besides, the procedure on temporaryincorporation of foreign workers or natural persons' movement on the markets of thecountries also they disable the trade in the sector of professional services.

In this chapter different barriers and obstacles have been included, regardingthe trade in professional services, which though, in general they happen to be affectedby similar obstacles also exist others that are own.

1. DOMESTIC REGULATION.

Contained in the article VI of the GATS, it establishes partly that each Member shall ensure that all measures of general application affecting trade in services

are administered in a reasonable, objective and impartial manner. "35

35 WTO, General Agreement on Trade in Services. Article VI: 1995.

24


30/49

The majority of the obstacles for the development of the trade of services wefind them in this area. With the objective to that the countries assure not distort the

trade a group of work was created in the WTO on National Regulation for theproduction of disciplines in relation to the requirements and procedures of aptitude,technical procedure, regime of licenses, among others.

Between other things, this national regulation consists of that when anauthorization is requested to operate in the territory of another Member in some sectorin where one has contracted specific commitments, this country will have to facilitateinformation about the request without delays or inappropriate arrears.36

Certainly, these regulations constitute an important restriction to the

opportunities of growth. Since it they are certain technical procedure for the regime oflicenses that do not guard relation with the competence and professional capacity,since it they are the requirements of citizenship, nationality or of residence.37

2. CREDENTIALS, LICENSES AND PERMITS.

The article VII of the GATS says to the recognition, that its in turn, the base ofthe processes of crediting, licenses and permissions for the rendering of professionalservices in different country, requesting him it recognizes the education or experiencesobtained before.

If two or more Members have agreements of mutual recognition of titles of

aptitude, the GATS indicates that it must give also to other Members the opportunity tonegotiate comparable agreements. The recognition of the titles of aptitude of other

36 PIA Gonzlez, Joaqun. Globalizacin y Servicios. First edition. Ed. Lexis Nexis. Santiagode Chile: 2003.37 MATOO, Aaditya and Pierre Sauv.Domestic Regulation and Service Trade Liberalization.First edition. The World Bank. Washington: 2003.

25


31/49

countries neither must be discriminatory nor must constitute a concealed protectionism.These agreements of recognition have to be notified to the WTO.38

In relation to titles of aptitude, an important aspect it contributes the article VI, N

4 of the GATS that us raises that for his grant:

a) Based on objective and transparent criteria, such as competence and the ability to supply the service;

b) Not more burdensome than necessary to ensure the quality of the service; c) In the case of licensing procedures, not in themselves a restriction on the supply

of the service. 39

3. SECTORAL BARRIERS TO THE INTERNATIONAL TRADE IN PROFESSIONAL

SERVICES.

As it was distinguishing itself previously, though barriers exist to the international

trade in professional services that we might call generic, there exist others that areown of every professional activity, and that are which the professionals of the differentareas must draw lots to take forward the presentation of his certain service.

Next to there are exposed some barriers of certain professional services:

3.1 Accountability services.

Multiple obstacles are outlined to the trade in services of accounting, among

others, the restrictions of the right to establish a commercial presence and therequirements of grant of licenses and examinations, excessive tariffs and special taxeson the utilities of the in force services of consultancy. Another obstacle is generated in

38 WTO. Web site, Available at:http://www.wto.org/spanish/thewto_s/whatis_s/tif_s/agrm6_s.htm; January 2008.39 WTO, General Agreement on Trade in Services. Article VI, N 4: 1995.

26
http://www.wto.org/spanish/thewto_s/whatis_s/tif_s/agrm6_s.htmhttp://www.wto.org/spanish/thewto_s/whatis_s/tif_s/agrm6_s.htm


32/49

the obligation that some countries impose of affiliating to professional associations oflocal area and the procedure that prohibit the use of names of multinational companies

in the national operations.40

3.2 Legal services.

Certainly, with the increasing internationalization of the economy the legalservices have charged vital importance since this service fulfills a fundamental role inthe operative development of the investment.

Clear that these services are not exempt of obstacles, and one of his main onesconsists of the predominant national character of the laws together with thepreponderant national character of the formation that they deliver, in general, theschools of law.

In a communication that does The United States to the Council of Services41 one proposes to extend the definition of legal services to give content to the services oflegal consultancy, mediation and activities of lobbying, as well as to the labor related to

the international law of arbitration. Likewise, the elimination of restrictions is claimed asfor the commercial presence (the services of the way called 3), including themeasurements that border the field of competence of the attorneys' foreign companiesand those that restrict certain forms of legal organization (mainly attorneys' associationof different countries).

3.3 Services in engineering.

The services of engineering, as the rest of the professional services havepresented a high growth in the last time. Nevertheless the important potential of growth

40 TROLLIET, Claude. Regulatory Reform and Trade Liberalization in Accountancy Services. 1edition. The World Bank. Washington: 2003.41 Council for Trade in Services operates under the guidance of the General Council and isresponsible for overseeing the functioning of the General Agreement on Trade in Services(GATS).

27


33/49

of the sector, the trade of Services of Engineering presents certain own obstacles thatreduce his competitiveness with regard to the trade of goods. These obstacles are,

among others: The difficulty in the free traffic and professionals' record, problemsassociated with the requirement, of this type of exports, of being tied to the provision ofFinancial Services, of Assurances, etc., internal barriers that do not favor theinternational trade of services since it they are requirements of residence or nationalityor the fulfillment of quotas for the obtaining permission.

3.4 Services in architecture.

The services of architecture, as other professional services suffer the difficulty ofthe system of quotas, imposed by some countries for the development of his professionin the exterior. Another problem is the possibility of exercising commercial presence,the reciprocal recognition of qualifications architecture.

28


34/49

CHAPTER IV

THE INTERNATIONAL TRADE ON PROFESSIONAL SERVICES LIBERALIZATION.

Since already we have indicated, is admitted worldwide that the sector of theprofessional services there presents a great potential of growth and internationalization,which must be promoted for an institutional frame based on the respect for the loyalpractices of trade, transparency of the rules of market and an ideal reciprocity in thelegislations and regulations.

These processes of integration must be promoted for institutional frames thatprovide clear and transparent rules for the development of the services, encouragingthe processes of complementation internationally and mainly to regional level (asgroups as the European Union have done it and as what seeks to do Mercosur'scommunity). In this area, in the international concert varied formulae exist to look for theliberalization of the trade in professional services. Certainly, it will depend on the spiritof nations, diverse needs that these face and no doubt, the will in to get in the world

process of growth of services of a firm and awkward way.42 These diverse ways of liberalization can qualify not neither for importance nor

which is more adapted to every country, his application will depend on his economiccharacteristics establishing for everyone the way of liberalization more appropriately.

1. DIFFERENT FORMULAS FOR LIBERALIZATION.

Indicated expressly in his preamble, one of the central objectives of the GATS tocontribute to the expansion of the trade under conditions of transparency and

42 MATOO, Aaditya and Pierre Sauv.Domestic Regulation and Service Trade Liberalization.First edition. The World Bank. Washington: 2003.

29


35/49

progressive liberalization and as a means of promoting the economic growth of all

trading partners and the development of developing countries .43 Under this context we

prune to identify and to construct some possible routes of liberalization and that expresslater:

Before that the routes of liberalization established in the GATS we will initiatethis analysis with the measurements of day after day, which arise from the dailyprofessional exercise and that are for those that the professionals of the different areashope that State they can bring over to his real needs. It is like that, since in the differentsubsectors of the professional services numerous obstacles can be detected for the

development of services. Often it is difficult for a foreign supplier of services to know thelocal conditions, which can be very different of a market from other one, and to extractthe best party. The difficulties do not stay there, with independence of the question ofthe recognition of the titles obtained in another country, the foreign supplier of serviceshas to face often especially to the requirement of the nationality or the residence, aswell as to restrictions on the investment and the form of the commercial presence. Therequirement of the residence turns out to be like particularly missed in the epoch of thefulminating growth of Internet and of the services given in accordance with the way 1

(cross-border supply). Finally, the interested party will have to overcome theobstacles relative the displacement of the persons (way 4).44

1.1 Professional services liberalization proposals.

Of the professional exercise in different areas, we rescue certain routes ofliberalization to barriers or difficulties that already we have known in previous chapters:

43 WTO, General Agreement on Trade in Services. Preamble: 1995.44 WTO, S/CSS/W/75. Comunicacin de Suiza al Consejo del Comercio de Servicios. Serie dereuniones extraordinarias. GATS 2000: Professional Services, Geneva: 2001.

30


36/49

1.1.1 Free movement of persons and professional regulation.

It would be improved establishing an agreement for which the States, theyharmonize his criteria of certification of titles, professionals and specialties, including hishomologation. Likewise, it is necessary to establish a joint agreement for uniformed andimprove the procedures of renewal and recognition of titles and, additional, professionaltemporary records must be implemented.

1.1.2 Tax barriers.

For the countries in which there does not exist a specific legislation that avoidsthe double taxation, the payment of taxes of diverse nature in the country recipient ofservices is a condition that affects the equity in the competence and the nationaltreatment. Similar situation we find when we speak about the VAT, which in the practicehas transformed in very much countries in an implicit exigency of residence since toaccede to the corresponding credit that this tax represents only the local companies willbe able to use it, not being fulfilled therefore the concept of national treatment. To solvethis problem there must be established major and better agreements that avoid the

double taxation. In the particular case of the VAT a mechanism must be analyzed forreturn (or temporary employee exemptions of the payment of VAT) for the foreignservices established in the country recipient.45

1.1.3 Problems regarding information transparency.

The suppliers must have transparent access, in the possible measurement, tothe local regulations on professional services in every country and on the specific

treatment that drinks to the foreign supplier, including conditions of access to themarket, legal, institutional, tributary and labour aspects. Therefore, every countrymember must deliver a complete relation of the legal and regulation dispositions thatregulate this type of services to the competent organizations as it is the professional

45 PIA Gonzlez, Joaqun. Globalizacin y Servicios. First edition. Ed. Lexis Nexis. Santiagode Chile: 2003.

31


37/49

specialty, as for example the professional colleges, departments related to the area asthe department of health concern of medical services or the department of housing and

urbanism concern of services of architecture.

1.1.4 Social sequirity .

Countries exist without agreement social sequirity between them, which istranslated in a double obligation or load social sequirity, her of informing funds for hisfuture retirement in the country where it has his permanent residence and in the countrywhere it gives himself temporarily the service. To avoid this problem it must be allowed

the international coverage of funds social sequirity, by means of a system of post ofnewspaper correspondent between the respective entities, as for health, forecast andaccidents of the work, in a system similar to which there use the commercial banks,who without having office in the whole world work with associate banks that it allowsthem to have coverage and international service more completely.

1.2 Liberalization of the professional services in the light of the GATS.

As we were indicating it, the GATS you have his own ways of liberalization thatthe Members use to extend his commercial horizons. It is the most common way andwhich the Members states of the agreement must apply to liberalize the areas of hisinterest. In the light of this, the most classic, simple formula and probably the one thatwould be waited is that of major application, it is the unilateral liberalization, acrosswhich there are eliminated discriminatory elements that affect the trade in professionalservices or other areas of the services of own way, with only zeal of which the economyof the liberalizing State joins of a real way to the international trade.

For example, it might raise her not exigency of a specific nationality to give aservice or her not exigency of permanent residence to develop an activity, amongothers. But surely, more than examples the governing term of the process ofliberalization and the one that must guide the political ones in this matter is ofnotdiscrimination , that means to have an identical treatment for natives and foreigners

32


38/49


39/49

measure inconsistent with paragraph 1 provided that such a measure is listed in, and

the conditions of, the Annex on Article II exemptions. Called the process of

liberalization it is marked by the possibility of establishing the minor quantity ofexemptions and of establishing the major possible opening in the terms established inthe paragraph 1 mentioned.

1.3 Proposals of liberalization on the part of the WTO Members.

The Members states adhered to the GATS usually are promoting, presented orsuggesting diverse liberalizing offers in different areas of the trade in professional

services that mark a general trend of extending the limits of liberalization opposite tobarriers or obstacles.

Next to there are summarized diverse presentations realized by different countriesto the WTO across the Council for Trade in Services in his series of extraordinarymeetings that express the firm spirit of some Members for taking forward the process ofliberalization of the trade in professional services:

On December 22, 2000, the European Communities raised the following offersto the Council for Trade in Services, central debating on the requirements ofnationality and residence established by the Members, which often constituteimportant barriers to the trade in professional services:

In his series extraordinary meetings, the Council for Trade in Services should begin,already it is in his bosom or in that of a subsidiary organ that is established with thisend, a debate on the general intentions of the negotiations in the sector of the

professional services. For example, the requirement of the nationality is often aninadequate instrument for the control of the professional competence. Nevertheless,this requirement can justify for the official functions that certain suppliers of servicesrecover in defense of the public interest The requirements of residence (that practicallyexclude any cross-border supply of the service) are only acceptable for protectionsreasons of the consumer or related to the responsibility of the supplier of the service.

34


40/49


41/49

of the professions and of stimulating the participation of all the Members of the WTO inorder to facilitate and to improve the access to the foreign markets. It might be a good

point of item the possibility of extending Directives for mutual agreements ordispositions in the sector of the accounting to the professional services in general.National regulation (paragraph 4 of the article VI of the GATS): the transparencyacquires a considerable importance having in bill the character strongly regulated of themajority of the professions that need fitting out and the scope of the administrativediscretion in the application of the rate of license. Canada is pawned in continuingcollaborating in the bosom of the current and different organisms that are created toimprove the opening of the rate of national regulation. It will strain also for developing

general disciplines, with the possibility of elaborating specific others to give fitted to thepeculiar characteristics of certain professions. In this regard, the Canada hasdemonstrated his interest to examine the following professional services: ofengineering, of architecture, legal, of town planning, of appraisement of real estate andof survey 50

On May 4, 2001 Switzerland raised the following offers to the Council for Trade

in Services, once more concern of the requirements of nationality and residence

established with proposed in the matter:" Switzerland proposes the elimination of the requirements of nationality andresidence and the readjustment of certain prescriptions, especially the relative ones tothe belonging to professional local associations and to the forms of establishment. Inmany cases, these restrictions nowadays in effect can be replaced with measurementsless discriminatory than in spite of all sound adapted to guarantee the respect of theobligations mentioned in the previous paragraph.Besides, Switzerland admits that the displacement of the persons is particularly

important for the sector of the professional services and proposes that the Membersshould examine the possibility of reducing the obstacles in the matter, in order tofacilitate the presentation of this type of services for the natural persons. By means ofthe present offer, Switzerland wants to contribute to the debates on the reduction of the

50 WTO, S/CSS/W/52. Comunicacin de Canad al Consejo del Comercio de Servicios. Serie dereuniones extraordinarias. GATS 2000: Professional services, Geneva: 2001.

36


42/49

obstacles that provoke a distortion of the negotiations. It is not a question of putting indanger the quality of the service or the protection and the safety of the consumers 51

2.- THE EUROPEAN UNION AS A MODEL OF LIBERALIZATION.

The European Union52 has turned into the process of more importantcommercial and economic integration and it has been the promoter of a series ofprinciples and liberalizing procedure of the trade in professional services.

Between these principles it is necessary to emphasize the following ones:

Free movement of workers and persons. The one that consists of the possibility ofall the citizens of the Union the right to reside and to move freely within the territoryof the Members states.In relation to the previous thing, the European Union has adopted measurementstending to standardize the social safety of the workers as effective measurement toguarantee the possibility of displacement of the workers who give his professional

services in another country Member of the Union.

Law and freedom of establishment and recognition of titles. He contemplatesthe possibility of exercising independent activities, very important aspect for theprofessional services. The recognition meditates expiring with minimal conditions ineducation and experience. There exist many other areas of important developmentfor the trade of services in general, like for example in the free movement of thecapitals, the transport, the telecommunications and the freedom to give services,

among other.

51 WTO, S/CSS/W/75. Comunicacin de Suiza al Consejo del Comercio de Servicios. Serie dereuniones extraordinarias. GATS 2000: Professional services, Geneva: 2001.52 The European Union , is a community of 27 European States established on November 1,1993, when there entered in effect the Agreement of the European Union. She is the successorof the European Communities, created in the years 50. It has for purpose develop politicaluniform in the political, economic and social of their members.

37


43/49

CONCLUSIONS

The compilation of information for the development of the present work wasrelatively complicated. This, because although there is nourished literature regardingthe international trade in services and within this, in the services rendered to companiesand other services given to the companies, it does not happen the same with theprofessional services, especially when distinguishing barriers and difficulties. Eventhough, we have reached a work that fulfilled its raised objectives.

Certainly, we are particularly encouraged b the international services subject

matter, the professional ones in particular, which has motivated the development of thepresent work. We understand, due to our own professional exercise, the real needs ofliberalization of this sector and how little it has been explored yet, thereby constitutingnowadays an area for absolutely opened investigation.

With respect to the conclusions of the work itself, they are numerous and amongthem we can rescue the following ones:

1. INTERNATIONAL TRADE IN SERVICES IN GENERAL.

The international trade in services represents a relatively new system of trade in themen history, which is not less important because of that, on the contrary, it is afundamental area of the international trade for the trade international affairs and,more importantly, for the strong role that it has in the human relations of the

individuals. Nowadays it represents about 20 % of the world trade.

It is not easy to define the international trade in services. This is not clearly definedwhich leads to problems related to the activities that remain included in this area oftrade. Anyway, we risked a definition that we think it contains the basic elements thatcompose the trade of services. Services are invisible, intangible and perishable

38


44/49

human renderings directly given between producer and consumer, capable ofproducing a change in the conditions of a person or a good.

The classification of the international trade of services determined by the documentMTN.GNS/W/120 of the WTO, although it is a great, indispensable tool fornegotiators as well as for the responsible of trade policy, to many people it isinsufficient since there are activities that might be classified in more of one categoryor others that cannot qualify in any of the existing categories, mainly regarding theuse of new technologies and more modern ways for the rendering of services.

The multilateral regulation that rules the international trade in services is governedmainly, by the General Agreement on Trade in Services (GATS), in a multilaterallevel, and by the Free Trade Agreements signed directly among countries.

2. INTERNATIONAL TRADE IN PROFESSIONAL SERVICES IN PARTICULAR.

The international trade in professional services constitutes one of the most relevantareas for the world trade, being of great importance in the current economicinternational field. This type of trade considers professionals of different areasembraced by the sectoral classification W120, in 11 main categories, among whichwe should underline: the legal services, countable services, services of architectureand services of engineering among others.

Different barriers, obstacles and difficulties sometimes coming from the very

domestic legislation, or sometimes rather from general procedure norms such asthose of market access and national treatment, are the ones that the lenders ofinternational services find. This work demonstrated that the barriers they have toface are diverse, but also we discover the spirit of countries to liberalizing theprofessional services worldwide.

39


45/49

3. BARRIERS AND DIFFICULTIES FOR THE INTERNATIONAL TRADE IN

PROFESSIONAL SERVICES.

In the second chapter of the present work we found the barriers that the multilateralregulation imposes on the Members of the WTO; among them we outlined themarket access and the national treatment, which although have a strong liberalizing

content, can be understood as a legitimate barrier that the countries can use.

But we not only find this type of barriers, there are also barriers that we calledgeneric because regardless the type of trade of services that is intended to render,this type of barriers, in general, will be present in the very rendering. As an examplewe found the tax barriers, the geographical distances, the customs barriers, amongothers.

In the third chapter we embraced the difficulties associated with the domesticregulation. In this sector the highest quantity of obstacles and difficulties to the tradeof professional services are concentrated. The crediting, licensing and permits forthe rendering of professional services constitute the means for countries to restrict inan excessive way the possibility of accessing its markets.

4. LIBERALIZATION OF THE TRADE IN PROFESSIONAL SERVICES.

The liberalization ends up being one of the most necessary processes for theinternational trade. This, because we should not only see the professional services inan isolated way, but also consider that many of these services go hand by hand withthe rendering of other services or the exchange of goods. For example the need that

40


46/49

attorneys or engineers are previously informed about foreign markets in order toevaluate the set off of project both of services and goods; to the accountants the

possibility of being part of a greater consolidated accountability system, amongothers.

Regarding the liberalization of the international trade in professional services, wecould make a classification gathering them by ways of liberalization in the light of theGATS, contained in its own provisions, like the National Treatment principle and theMost Favoured Nation treatment on the one hand and on the other the liberalizationmeasures that we have called day after day measures, which, in general, we are

able to find in chapters II and III, but that were analysed from the liberalizing point ofview and not from the standpoint of a barrier.

41


47/49

BIBLIOGRAPHY

Books and manuals:

CEPAL. Manual para la preparacin del cuestionario sobre las medidas que afectan alcomercio de servicios en el hemisferio. Divisin de Comercio Internacional y

financiamiento para el desarrollo, unidad de comercio internacional, 1999.

FEKETUKY, Geza. International Trade in Services. First edition. Ed. Gernika S.A,Ciudad de Mxico, 1990.

MATOO, Aaditya and Pierre Sauv. Domestic Regulation and Service TradeLiberalization. First edition. The World Bank. Washington, 2003

PIA Gonzlez, Joaqun. Globalizacin y Servicios. First edition. Ed. Lexis Nexis.Santiago de Chile, 2003.

TROLLIET, Claude. Regulatory Reform and Trade Liberalization in AccountancyServices. First edition. The World Bank. Washington, 2003

VANERIO Gustavo, Comercio Internacional de Servicios Profesionales. 1 edition. Ed.Fundacin de Cultura Universitaria, Montevideo, 1999.

Documents and reports:

PRIETO, Francisco Javier. Servicios en el programa Doha para el desarrollo (PDD):Cuestiones relativas a la aplicacin y a las polticas. Integracin & Comercio Magazine,Santiago de Chile, nmero 22, enero-junio 2005.

42


48/49


49/49