General Agreement on Trade in Services (GATS)
Canada's Initial Request in WTO Services Negotiations
Description of Requests Presented by Canada to its WTO Partners
Canada is one of the most open service economies in the world. The extensive GATS market access and national treatment commitments that Canada has undertaken in the previous round of negotiations reflect an open services regime and a dynamic services economy. Canada is therefore well positioned to seek from its World Trade Organization trading partners improvements in their GATS commitments that will benefit Canada's service exporters.
General Guiding Principles for Canada's Country-Specific Initial Requests
In its requests to other countries, Canada will seek greater market access and national treatment commitments in sectors and in countries of key interest to Canadian service providers. As a general rule, Canada will ask its trading partners to at least match its current level of commitments. More precisely, Canada will seek greater market access for its service providers by asking countries to make GATS commitments in sectors where they have none currently, or to expand the scope of their existing commitments. Canada will aim for the reduction of specific barriers faced by Canadian firms that fall within the scope of the GATS. These barriers include discriminatory measures or market restrictions such as quotas and economic needs tests, which often impede trade or limit access to markets in which Canadian exporters are active or are looking to expand their activities.
Canada's country-specific initial requests derive from the initial negotiating position that Canada made public at the WTO on March 14, 2001, and are fully consistent with the objectives set out at that time.
Canada has submitted country-specific initial requests to over 60 WTO member countries, none of which are least-developed countries. These requests seek commitments in the following 12 service sectors:
- Professional Services
- Computer and Related Services
- Research and Development Services
- Other Business Services:
- Courier Services
- Telecommunications Services
- Construction and Related Engineering Services
- Distribution Services
- Environmental Services
- Financial Services
- Tourism and Travel-Related Services
- Transport Services
Canada is not seeking commitments from its trading partners in health, public education, social services or culture.
The following sections provide information on sector-specific considerations taken into account when formulating Canada's country-specific initial requests.
- Professional services include legal services, accounting, auditing and bookkeeping services, taxation services, architectural services and urban planning and landscape architectural services.
- Many of these services require individual practitioners to be accredited, certified and/or licensed to hold a professional title and to exercise the right to practise.
- The Canadian professional services sector, led largely by the engineering, architectural, and management consulting professions, has experienced continuous growth in international activities of about 20 percent per year ($6 billion in 1999) over the last 10 years. The capabilities and expertise of Canadian professional services providers are recognized and sought after worldwide, reflecting the fact that this sector is competitive and well placed to take advantage of international opportunities.
- Canada will request that its trading partners improve their commitments for professional services through the elimination of trade barriers related to, for example, temporary entry regulations, investment and ownership limitations, and nationality and citizenship requirements.
- Computer and related services include consultancy services related to the installation of computer hardware, software implementation services, data-processing services, database services, and other computer services including data preparation services.
- In 1999, foreign revenues of the Canadian computer and related services sector reached $2.3 billion, accounting for 13.2 percent of total revenues.
- Canada will request that its trading partners improve their commitments by eliminating limitations on the participation of foreign capital (e.g. in terms of the maximum percentage limit of foreign shareholding or on the total value of individual or aggregate shareholding) and by eliminating restrictions that limit the duty-free exemption from import duties applicable to the production of goods in the sector to domestic producers. Canada will also request that countries make broad commitments for all subsectors of computer and related services, if they have not already done so.
- Research and development services include activities related to natural sciences and engineering, and social sciences and humanities, as well as interdisciplinary research and experimental development.
- In 1999, Canada exported $3.21 billion worth of research and development services, accounting for more than 10 percent of Canada's total commercial services exports.
- Canada will request that its trading partners remove impediments such as requirements to use a local partner to provide services, or requirements for local hiring.
- Management consulting services include general management consulting, human resources management consulting and marketing management consulting services.
- Canada will request that its trading partners improve their commitments with respect to the temporary entry and stay of our management consultants, and reduce discriminatory qualification and licensing requirements and procedures.
- Oil and gas services include derrick erection, repair and dismantling services; services necessary for oil and gas extraction such as well casting, cementing, pumping, plugging and abandoning wells; specialized fire-extinguishing services; and the transportation of petroleum and gas via pipeline.
- Canadian companies provide a full range of specialized services, from feasibility studies, through site preparation, construction and maintenance, to the marketing and delivery of energy through pipelines. The Canadian industry is recognized as a leader in a number of areas, including advanced drilling technologies, oil sands production, and specialized recovery and processing products.
- In 1998, revenues of the Canadian oil and gas services industry were estimated at $5.4 billion, of which $3 billion (more than half) was generated by exports.
- Canada will request that its trading partners eliminate restrictions on repatriation of profits and on the entry of professionals and equipment, and eliminate arbitrary business and licensing requirements.
- Canadian mining companies are involved around the world in a wide range of services, including providing exploration services such as geological and other prospecting work and site preparation work; assessing mineral discoveries; expanding existing mines and building new ones; producing mineral commodities; closing depleted operations; and restoring mine sites.
- In 1997, about 30 percent of the total revenues of Canadian suppliers of specialized mining goods and services were from exports. Revenues from the sale of mining services alone were evaluated at over $6 billion.
- Canada will request that its trading partners improve their commitments by eliminating a number of discriminatory measures, such as restrictions on the repatriation of profits and arbitrary business and licensing requirements.
- Courier services consist of the pick-up, transport and delivery (of letters, parcels and packages) services that are not provided by national postal administrations (such as Canada Post).
- Canada's courier services industry consists of some 2,400 courier companies, which over the past few years have generated $4.7 billion in annual total revenues, of which international operations represent 15 percent.
- Canada will request that its trading partners make commitments that reflect Canada's comparative openness in this sector; many countries, to date, have not made commitments.
- Telecommunications services include voice telephone services, facsimile services, electronic mail, voice mail and on-line information and database retrieval.
- In 2000, the telecommunications services industry in Canada employed 116,000 workers and contributed approximately $21.4 billion to GDP.
- Canada will request that its trading partners improve their commitments for telecommunications services, notably with respect to the reduction of discriminatory measures and arbitrary and non-transparent processes for the approval of operating permits and licences. Canada will also request that all members adopt the pro-competitive regulatory principles of the Reference Paper and will press, where necessary, to have existing GATS commitments effectively implemented or to have the scope and intent of these commitments clarified.
- Construction services include general construction work for buildings, installation and assembly work and building completion and finishing work.
- The Canadian construction industry is composed primarily of a large number of small and highly specialized companies. In 1995, the industry comprised 20,000 general contractors and 107,500 trade contractors.
- Canada will request that its trading partners remove restrictions on the type of legal entity allowed for commercial presence; foreign capital limits; constraints on the value of transactions or assets allowed when foreign companies establish a commercial presence; and local hiring, nationality and residency requirements.
- Distribution services include commission agents' services, wholesale trade services, retailing services and franchising.
- In 2000, Canadian retail and wholesale services employed over 2.6 million Canadians (representing 15 percent of total employment) and accounted for 12.8 percent of total GDP. Both sectors have been growing: at rates of 5 percent and 8 percent, respectively, over the last five years.
- Canada will request that its trading partners improve their commitments by eliminating restrictions on the type of corporate entities that can be established; commercial presence requirements for cross-border trade; foreign ownership restrictions; and joint venture requirements.
- Environmental services include refuse disposal services, sanitation services, cleaning of exhaust gases, noise abatement services, and nature and landscape protection services.
- In 1998, approximately 42,000 employees were directly involved in the provision of environmental services; Canadian revenues reached $6.3 billion, with exports accounting for approximately $215 million.
- Canada will request that its trading partners improve their commitments by removing licensing requirements and requirements for local partnership.
- Financial services include insurance and insurance-related services, banking and other services.
- Canada's financial services sector employs more than half a million people and represents approximately 5 percent of Canada's GDP. In 2000, the industry's estimated assets and net income amounted to about $2.2 trillion and $16.3 billion respectively. Foreign operations of Canadian banks and life insurance companies account for almost 50 percent and 55 percent of revenue respectively.
- Canada will request that its trading partners improve their commitments by removing restrictions on the type of legal establishment allowed, on foreign ownership, and on permitted business lines; by improving transparency in financial sector regulation; and by removing regulations such as discriminatory capital requirements.
- Tourism services include hotel and restaurant services, travel agencies and tour operator services, and tourist guide services.
- In 2000, 30 percent of the tourism and travel-related sector's overall revenues originated from international visitors, who spent $16.2 billion. Canada is one of the most popular destinations in the world, holding the ninth position and a 2.9 percent share of the global international tourism market in 2000.
- Canada will request that its trading partners reduce the impediments faced by Canadian service providers abroad, notably requirements for economic needs tests, citizenship requirements to obtain certain types of licences, and restrictions on market access for small and medium-sized hotels.
- Transportation services include maritime, air, rail and road transport services, auxiliary services, and rental and leasing services of transportation equipment without operators.
- The transportation industry's share of Canada's GDP was 4.1 percent in 2000, with trucking having the largest share at 1.7 percent, and domestic marine transport services the lowest at 0.3 percent.
- In rail and road transport, in the maintenance and repair of aircraft, and in rail and road transport equipment, Canada will request that its trading partners reduce barriers faced by Canadian firms wishing to establish a commercial presence.
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