Cross-Border Trade in Services Chapter

Trade is more than just the import and export of goods. Ideas and expertise are also traded in the form of services, and investment flows from one country to another. The Canadian service sector accounts for more than 13.6 million jobs, including some of the highest-paying jobs in Canada. Accounting for close to 70 percent of Canada’s GDP, the service sector is by far the largest part of Canada’s economy.

Canadians excel at providing knowledge-intensive, advanced services in such areas as engineering, architecture, information management, environmental protection and monitoring, mining and energy development. Canada’s service exports are worth $95.2 billion a year and account for 16.8 percent of Canada’s total trade with great potential for growth. The Cross-Border Trade in Services Chapter will provide Canadian service suppliers with more secure access through greater transparency and predictability in the dynamic TPP region.

Technical Summary of Negotiated Outcomes: Cross-Border Trade in Services Chapter

  • Includes enhanced obligations to secure current and future levels of liberalization in the service sector. These obligations include:
    • a provision that ensures that certain commitments by TPP Parties are locked-in based on their current domestic regime (known as a “standstill” mechanism) and therefore cannot become more restrictive;
    • a provision that ensures that if any TPP Party autonomously liberalizes certain laws, policies or regulations that makes it easier for Canadians to conduct their services or investment activities in that market, the liberalization becomes that Party’s obligation under the TPP Agreement (known as the “ratchet” mechanism) and therefore cannot become more restrictive; and
    • a provision on most-favoured nation treatment to ensure additional benefits granted by any TPP Party under future FTAs will also be extended to Canadian service suppliers.  
  • Covers a broad range of services through a “negative list” approach, which means that all service sectors are covered by the Agreement, with the exception of the few sectors that are listed by a country. The negative list approach also ensures coverage for services as they evolve over time.
  • Offers improved market access commitments from Canada’s existing FTA partners and, from other TPP Parties, market access that goes beyond the World Trade Organization (WTO) General Agreement on Trade in Services (GATS) commitments.
  • Provides a framework that facilitates the voluntary negotiation of mutual recognition agreements (MRAs) between Canadian competent authorities and their counterparts in TPP countries.
  • Allows for TPP Parties to participate in professional services working groups in order to liaise and facilitate activities related to MRAs. This provides Canadian professional bodies with another avenue for raising their interests with regards to mutual recognition of credentials.
  • Includes obligations to ensure that trade in services is facilitated in a reasonable and objective manner by domestic regulators.
  • Ensures that measures relating to qualification requirements and procedures, technical standards and licensing requirements do not create unnecessary service trade barriers.
  • Provides additional commitments on express delivery services–which have not been included in any of Canada's existing FTAs, and take into account Canada’s domestic regime.
  • Excludes certain types of services in Canada because their protection is fundamental to our social fabric, including health, public education, and other social service sectors and activities. Excluding these services protects flexibility for Canadian policy objectives in these areas.
  • Enables Canada and all TPP countries to preserve their right to decide, regulate and control how to develop and extract their natural resources.
  • Ensures full policy flexibility so that Canada can maintain or adopt new measures concerning rights or preferences provided to Aboriginal peoples and minority groups.
  • Includes a broad reservation under Services and Investment for existing and future programs and policies with respect to cultural industries that aim to support, directly or indirectly, the creation, development or accessibility of Canadian artistic expression and content.

After-sales services for information technology (IT) providers

A company that designs sophisticated transportation management software already gets a lot of attention in many TPP countries, where there is growing demand for well-designed and user-friendly software. Before TPP, the company had difficulty providing the same high-quality software and services to clients in the Asia-Pacific region that made it so successful in Canada.

Under the TPP, this company’s software will benefit from more ambitious market access into certain Asian markets. More importantly, the company will be able to offer installation and after-sales training services to buyers, as the workers will benefit from facilitated temporary entry to perform these services.