PART FOUR
SERVICES, INVESTMENT
AND TEMPORARY ENTRY
Chapter Fourteen
Services
Article 1401: Scope and Coverage
1. This Chapter shall apply to any measure of a Party related to the provision of a covered service by or on behalf of a person of the other Party within or into the territory of the Party.
2. In this Chapter, provision of a covered service includes:
a) the production, distribution, sale, marketing and delivery of a covered service and the purchase or use thereof;
b) access to, and use of, domestic distribution systems;
c) the establishment of a commercial presence (other than an investment) for the purpose of distributing, marketing, delivering, or facilitating a covered service; and
d) subject to Chapter Sixteen (Investment), any investment for the provision of a covered service and any activity associated with the provision of a covered service.
Article 1402: Rights and Obligations
1. Subject to paragraph 3, each Party shall accord to persons of the other Party treatment no less favourable than that accorded in like circumstances to its persons with respect to the measures covered by this Chapter.
2. The treatment accorded by a Party under paragraph 1 shall mean, with respect to a province or a state, treatment no less favourable than the most favourable treatment accorded by such province or state in like circumstances to persons of the Party of which it forms a part.
3. Notwithstanding paragraphs 1 and 2, the treatment a Party accords to persons of the other Party may be different from the treatment the Party accords its persons provided that:
a) the difference in treatment is no greater than that necessary for prudential, fiduciary, health and safety, or consumer protection reasons;
b) such different treatment is equivalent in effect to the treatment accorded by the Party to its persons for such reasons; and
c) prior notification of the proposed treatment has been given in accordance with Article 1803.
4. The Party proposing or according different treatment under paragraph 3 shall have the burden of establishing that such treatment is consistent with that paragraph.
5. Paragraphs 1, 2, and 3 of this Article and Article 1403 shall not apply to:
a) a non-conforming provision of any existing measure;
b) the continuation or prompt renewal of a non-conforming provision of any existing measure; or
c) an amendment to a non-conforming provision of any existing measure to the extent that the amendment does not decrease its conformity with any of the provisions of paragraphs 1, 2 or 3 or of Article 1403.
6. The Party asserting that paragraph 5 applies shall have the burden of establishing the validity of such assertion.
7. Each Party shall apply the provisions of this Chapter with respect to an enterprise owned or controlled by a person of the other Party notwithstanding the incorporation or other legal constitution of such enterprise within the Party's territory.
8. Notwithstanding that such measures may be consistent with paragraphs 1, 2 and 3 of this Article and Article 1403, neither Party shall introduce any measure, including a measure requiring the establishment or commercial presence by a person of the other Party in its territory as a condition for the provision of a covered service, that constitutes a means of arbitrary or unjustifiable discrimination between persons of the Parties or a disguised restriction on bilateral trade in covered services.
9. No provision of this Chapter shall be construed as imposing obligations or conferring rights upon either Party with respect to government procurement or subsidies.
Article 1403: Licensing and Certification
1. The Parties recognize that measures governing the licensing and certification of nationals providing covered services should relate principally to competence or the ability to provide such covered services.
2. Each Party shall ensure that such measures shall not have the purpose or effect of discriminatorily impairing or restraining the access of nationals of the other Party to such licensing or certification.
3. The Parties shall encourage the mutual recognition of licensing and certification requirements for the provision of covered services by nationals of the other Party.
Article 1404: Sectoral Annexes
The provisions of this Chapter shall apply to the Sectoral Annexes set out in Annex 1404, except as specifically provided in the Annexes.
Article 1405: Future Implementation
1. The Parties shall endeavour to extend the obligations of this Chapter by negotiating and, subject to their respective legal procedures, implementing:
a) the modification or elimination of existing measures incon-sistent with the provisions of paragraphs 1, 2 or 3 of Article 1402 and Article 1403; and
b) further Sectoral Annexes.
2. The Parties shall periodically review and consult on the provisions of this Chapter for the purpose of including additional services and for identifying further opportunities for increasing access to each other's services markets.
Article 1406: Denial of Benefits
1. Subject to prior notification and consultation in accordance with Articles 1803 and 1804, a Party may deny the benefits of this Chapter to persons of the other Party providing a covered service if the Party establishes that the covered service is indirectly provided by a person of a third country.
2. The Party denying benefits pursuant to paragraph 1 shall have the burden of establishing that such action is in accordance with that paragraph.
Article 1407: Taxation
Subject to Article 2011, this Chapter shall not apply to any new taxation measure, provided that such taxation measure does not constitute a means of arbitrary or unjustifiable discrimination between persons of the Parties or a disguised restriction on trade in covered services between the Parties.
Article 1408: Definitions
For purposes of this Chapter:
activity associated with the provision of a covered service includes the organization, control, operation, maintenance and disposition of companies, branches, agencies, offices, or other facilities for the conduct of business; the acquisition, use, protection and disposition of property of all kinds; and the borrowing of funds;
covered service means a service listed in the Schedule to Annex 1408 and described for purposes of reference in that Annex;
investment has the same meaning as in Article 1611; and
provision of a covered service into the territory of a Party includes the cross-border provision of that covered service.
Annex 1408
Services Covered by this Chapter
Services covered by this Chapter shall be limited to those services corresponding to the Standard Industrial Classification (SIC) numbers included in the Schedule to this Annex, with the addition of computer services, telecommunications-network-based enhanced services and tourism services. For purposes of reference, the services covered by this Chapter are broadly identified below.
Agriculture and forestry services
Soil preparation services
Crop planting, cultivating and protection services
Crop harvesting services (primarily by machine)
Farm management services
Landscape and horticultural services
Forestry services (such as reforestation, forest firefighting)
Crop preparation services for market
Livestock and animal specialty services (except veterinary)
Mining services
Metal mining services
Coal mining services
Oil and gas field services
Non-metallic minerals (except fuels) services
Construction services
Building, developing and general contracting services
Special trade contracting services
Distributive trade services
Wholesale trade services
Vending machine services
Direct selling services
Insurance and real estate services
Insurance services
Segregated and other funds services (managed by insurance companies only)
Insurance agency and brokering services
Subdivision and development services
Patent ownership and leasing services
Franchising services
Real estate agency and management services
Real estate leasing services
Commercial services
Commercial cleaning services
Advertising and promotional services
Credit bureau services
Collection agency services
Stenographic, reproduction and mailing services
Telephone answering services
Commercial graphic art and photography services
Services to buildings
Equipment rental and leasing services
Personnel supply services
Security and investigation services
Security systems services
Hotel reservation services
Automotive rental and leasing services
Commercial educational correspondence services
Professional services, such as
Engineering, architectural, and surveying services
Accounting and auditing services
Agrology services
Scientific and technical services
Management consulting services
Librarian services
Agriculture consulting services
Non-professional accounting and bookkeeping services
Training services
Commercial physical and biological research services
Commercial economic, marketing, sociological, statistical and
educational research services
Public relations services
Commercial testing laboratory services
Repair and maintenance services
Other business consulting services
Management services
Hotel and motel management services
Health care facilities management services
Building management services
Retail management services
Packing and crating services
Other services
Computer services
Telecommunications-network-based enhanced services
Tourism services
Schedule
Each Party shall apply the provisions of this Chapter to the services listed under the Party's respective section below and shall extend those provisions to all subdivisions of each division, two-digit, three-digit or four-digit industrial code listed, except as specified, and shall also extend those provisions for each Party to tourism services as specifically defined in Annex 1404 (B) and to computer services and enhanced services as specifically defined in Annex 1404 (C).
For Canada
(Standard Industrial Classification (SIC) numbers as set out in Statistics Canada, Standard Industrial Classification, fourth edition, Department of Supply and Services, 1980)
02 (except 0211), 05, 09 (incidental to 06, 07, 08), 40, 41, 42, 44, 4599 - packing and crating only, 51, 52, 53, 54, 55, 56, 57, 59, 60 (except 602) - management services only, 61 - management services only, 62 - management services only, 63 - management services only, 635, 64 - management services only, 65 (except 651) - management services only, 69, 7211 - managed by insurance companies only, 7212 - managed by insurance companies only, 7213 - managed by insurance companies only, 7291 - managed by insurance companies only, 73 (except 732), 7499 - franchising, 75 - except mobile home and railroad property leasing, 76, 77 (except 776, 7794), 852 - commercial services only, 861 - management services only, 862 - management services only, 863 - management services only, 865 - management services only, 866 - management services only, 867 - management services only, 868 - commercial services only, 911 - management services only, 92, 9725, 99 (except 9931, 996, 9991).
For the United States of America
(Standard Industrial Classification (SIC) numbers as set out in the United States Office of Management and Budget, Standard Industrial Classification Manual, 1987 )
071, 0721, 0722, 0723, 075, 0762, 078, 085, 108, 124, 138, 148, 15, 16, 17, 4783, 50, 51, 52 - management services only, 53 - management services only, 54 - management services only, 55 - management services only, 56 - management services only, 57 - management services only, 58 - management services only, 59 - management services only, 596, 63 (except 639), 64, 6512, 6513, 6514, 6519, 653, 6552, 6794 - franchising, 701 - management services only, 7213, 7218, 731, 732, 733, 734, 735, 736, 7381, 7382, 7389 - hotel reservation services and telephone answering services only, 751, 753, 76 - repair and maintenance services only, 80 (except 807) - management services only, 807 - commercial services only, 824 - commercial services only, 871, 872, 8731, 8732, 8734, 8741, 8742, 8743, 8748.
Annex 1404
Sectoral Annexes
A. Architects
Article 1: Scope and Coverage
This Sectoral Annex shall apply to any measure relating to the mutual recognition of professional standards and criteria for the licensing and conduct of architects and the provision of architectural services.
Article 2: Development of Mutually Acceptable
Professional Standards and Criteria
The Parties acknowledge that the Royal Architectural Institute of Canada and the American Institute of Architects, in consultation with appropriate professional and regulatory bodies, are endeavouring to develop mutually acceptable professional standards and criteria regarding the following matters for the purpose of making recom-mendations on mutual recognition, on or before December 31, 1989:
a) education -- accreditation of schools of architecture;
b) examination -- qualifying examinations for licensing;
c) experience -- determination of experience required in order to be licensed to practise;
d) conduct and ethics -- specification of professional conduct required of practising architects and the disciplinary action for non-conformity; and
e) professional development -- continuing education of practising architects.
Article 3: Implementation
Upon receipt of the recommendations of the professional associations, the Parties shall:
a) complete their review of the recommendations within 180 days following receipt; and
b) if such recommendations are consistent with this Chapter and acceptable to the Parties, encourage their respective provincial and state governments to adopt or amend, within the six-month period following completion of the review, those measures necessary so that
i) the respective provincial and state licensing authorities accept the licensing and certification requirements of the other Party on the same basis as their own; and
ii) the treatment accorded persons of a Party providing architectural services within or into the territory of the other Party is consistent with paragraphs 1, 2, and 3 of Article 1402.
Article 4: Review
The Parties shall establish a committee for the purpose of reviewing compliance by the licensing authorities with the standards and criteria implemented pursuant to Article 3 of this Sectoral Annex.
B. Tourism Services
Article 1: Scope and Coverage
1. This Sectoral Annex shall apply to any measure related to trade in tourism services.
2. For purposes of this Sectoral Annex:
tourism services include the tourism-related activities of the following: travel agency and related travel services including tour wholesaling, travel counselling, arranging and booking; issuance of travellers insurance; all modes of international passenger transpor-tation; hotel reservation services; terminal services for all modes of transport, including concessions; transportation catering services; airport transfer; lodging, including hotels, motels, and rooming houses; local sightseeing, regardless of mode of transportation; intercity tour operation; guide and interpreter services; automobile rental; provision of resort facilities; rental of recreational equipment; food services; retail services; organizational and support services for international conventions; marina-related services including the fueling, supply, and repair of, and provision of docking space to, pleasure boats; recreational vehicle rental; campground and trailer park services; amusement park services; commercial tourist attractions; and tourism-related services of a financial nature;
tourism-related services of a financial nature means such services provided by an entity that is not a financial institution as defined in Article 1706; and
trade in tourism services means the provision of a tourism service by a person of a Party
a) within the territory of that Party to a visitor who is a resident of the other Party, or
b) within the territory of the other Party to a resident of, or visitor to, the other Party, either cross-border, through a commercial presence or through an establishment in the territory of the other Party.
Article 2: Obligations
1. This Chapter shall apply to all measures related to trade in tourism services, which measures include:
a) provision of tourism services in the territory of a Party, either individually or with members of a travel industry trade association;
b) appointment, maintenance and commission of agents or representatives in the territory of a Party to provide tourism services;
c) establishment of sales offices or designated franchises in the territory of a Party; and
d) access to basic telecommunications transport networks.
2. Provided that such promotional activities do not include the provision of tourism services for profit, each Party may promote officially in the territory of the other Party the travel and tourism opportunities in its own territory, including engagement in joint promotions with tourism enterprises of that Party and provincial, state and local governments.
3. The Parties recognize that the adoption or application of fees or other charges on the departure or arrival of tourists from their territories impedes the free flow of tourism services. When such fees or other charges are imposed, they shall be applied in a manner consistent with Article 1402 and limited in amount to the approximate cost of the services rendered.
4. Neither Party shall impose, except in conformity with Article VIII of the Articles of Agreement of the International Monetary Fund, restrictions on the value of tourism services that its residents or visitors to its territory may purchase from persons of the other Party.
Article 3: Relationship to the Agreement
Nothing in this Sectoral Annex shall be construed as:
a) conferring rights or imposing obligations on a Party relating to computer services and enhanced services as defined in Annex 1404(C), financial services as defined in Article 1706 and transportation services that are not otherwise conferred or imposed pursuant to any other provision of this Agreement and its annexes; or
b) affecting in any way the application of measures relating to the provision of tourism-related services of a financial nature.
Article 4: Consultation
The Parties shall consult at least once a year to:
a) identify and seek to eliminate impediments to trade in tourism services; and
b) identify ways to facilitate and increase tourism between the Parties.
C. Computer Services and Telecommunications-Network-Based Enhanced Services
Article 1: Objective
The objective of this Sectoral Annex is to maintain and support the further development of an open and competitive market for the provision of enhanced services and computer services within or into the territories of the Parties. The provisions of this Sectoral Annex shall be construed in accordance with this objective.
Article 2: Scope and Coverage
This Sectoral Annex shall apply to any measure of a Party related to the provision of an enhanced or computer service by or on behalf of a person of the other Party within or into the territory of the Party.
Article 3: Rights and Obligations
1. This Chapter shall apply to all measures covered by this Sectoral Annex, which includes measures related to:
a) access to, and use of, basic telecommunications transport services, including, but not limited to, the lease of local and long-distance telephone service, full-period, flat-rate private-line services, dedicated local and intercity voice channels, public data network services, and dedicated local and intercity digital and analog data services for the movement of information, including intracorporate communications;
b) the resale and shared use of such basic telecommunications transport services;
c) the purchase and lease of customer-premises equipment or terminal equipment and the attachment of such equipment to basic telecommunications transport networks;
d) regulatory definitions of, or classifications as between, basic telecommunications transport services and enhanced services or computer services;
e) subject to Chapter Six (Technical Standards), standards, certification, testing or approval procedures; and
f) the movement of information across the borders and access to data bases or related information stored, processed or otherwise held within the territory of a Party.
2. The establishment of a commercial presence as set out in this Chapter shall include the establishment of offices, appointment of agents, and installation of customer-premises equipment or terminal equipment for the purpose of distributing, marketing, delivering or facilitating the provision of an enhanced or computer service within or into the territory of a Party.
3. Investment as set out in this Chapter shall include the purchase, lease, construction, or operation of equipment necessary for the provision of an enhanced or computer service.
Article 4: Existing Access
1. Each Party shall maintain existing access, within and across the borders of both Parties, for the provision of enhanced services through the use of the basic telecommunications transport network of the Party and for the provision of computer services.
2. Nothing in paragraph 1 shall be construed to restrict or prevent a Party from introducing measures related to the provision of enhanced services and computer services provided that such measures are consistent with this Chapter.
Article 5: Monopolies
1. Where a Party maintains or designates a monopoly to provide basic telecommunications transport facilities or services, and the monopoly, directly or through an affiliate, competes in the provision of enhanced services, the Party shall ensure that the monopoly shall not engage in anticompetitive conduct in the enhanced services market, either directly or through its dealings with its affiliates, that adversely affects a person of the other Party. Such conduct may include cross-subsidization, predatory conduct, and the discriminatory provision of access to basic telecommunications transport facilities or services.
2. Each Party shall maintain or introduce effective measures to prevent the anticompetitive conduct referred to in paragraph 1. These measures may include accounting requirements, structural separation, and disclosure.
Article 6: Exceptions
1. Nothing in this Agreement shall be construed:
a) to require a Party to authorize a person of the other Party
i) to establish, construct, acquire, lease or operate basic telecommunications transport facilities, or
ii) to offer basic telecommunications transport services within its territory;
b) to prevent a Party from maintaining, authorizing or designating monopolies for the provision of basic telecommunications transport facilities or services; or
c) to prevent a Party from maintaining or introducing measures requiring basic telecommunications transport service traffic to be carried on basic telecommunications transport networks within its territory, where such traffic
i) originates and terminates within its territory,
ii) originates within its territory and is destined for the territory of the other Party or a third country, or
iii) terminates in its territory, having originated in the territory of the other Party or a third country.
2. The inclusion of intracorporate communications in this Sectoral Annex shall not be construed to indicate whether or not such communications are traded internationally. Their inclusion is to indicate that they may serve to facilitate trade in goods and services.
Article 7: Definitions
For purposes of this Sectoral Annex:
basic telecommunications transport service means any service, as defined and classified by measures of the regulator having jurisdiction, that is limited to the offering of transmission capacity for the movement of information;
computer services means those services, whether or not conveyed over the basic telecommunications transport network, that involve generating, acquiring, storing, transforming, processing, retrieving, utilizing or making available information in a computerized form, including, but not limited to
computer programming,
prepackaged software,
computer integrated systems design,
computer processing and data preparation,
information retrieval services,
computer facilities management,
computer leasing and rental,
computer maintenance and repair, and
other computer-related services, including those integral to the provision of other covered services;
enhanced service means any service offering over the basic telecommunications transport network that is more than a basic telecommunications transport service as defined and classified by measures of the regulator having jurisdiction; and
monopoly means any entity, including any consortium, that, in any relevant market in the territory of a Party, is the sole provider of basic telecommunications transport facilities or services.