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November 2006

ESF PRELIMINARY ASSESSMENTS OF

GATS OFFERS IN OTHER BUSINESS SERVICES

  1. Argentina: initial offer; good

Modes 1-3 are committed in advertising services (CPC 871), market research and public polling (CPC 864), management consulting services (CPC 865), services incidental to mining (CPC 883 and 5115), building cleaning services (CPC 874), convention services (CPC 87909) & other business services (CPC 8790).

We would like to see new commitments in services related to management consulting (CPC 866), technical testing and analysis services (CPC 8675), related scientific and technical consulting services (CPC 8675), maintenance and repair of equipment (not including transport equipment (CPC 633 + 8861-8866), security services (CPC 87302-87309), grounds maintenance (part of CPC 88110) and washing and cleaning services (CPC 97011-97014)

  1. Australia:revised offer; acceptable.

ESF welcomes the new commitments in the revised offer. Restrictions have been lifted in mode 1-3 for technical testing and analysis services (CPC 8676), services incidental to manufacturing (CPC 884-885 except 88442) and maintenance and repair of equipment - not including maritime vessels, aircraft or other transport equipment- (CPC 633 + 8861 – 8866). Therefore, many of the business services sub-sectors are not fully bound, like research & development services (CPC 85) except R&D services on social sciences and humanities (CPC 852), some services related to management consulting (arbitration and conciliation services – CPC 86602), placement and supply of personnel services, packaging services (CPC 876), etc.

III.Brazil: revised offer; little new

Brazil has made mode 3 commitments on market research and public opinion polling, management consulting, services related to management consulting, building cleaning, translation and interpretation services & urban planning in 1994.

In its initial offer of 2004, Brazil added mode 2 commitments in market research and public opinion polling, management consulting & services related to management consulting & building cleaning. In addition, Brazil added new mode 3 commitments on technical testing and analysis services, services incidental to fishing, placement and supply services of personnel, investigation and security, maintenance and repair of equipment (not including maritime vessels, aircraft or other transport equipment), photographic services, packaging services & convention services.

In its revised offer of 2005, Brazil has still not changed its commitment on advertising services, with mode 1 restrictions limiting foreign participation to 1/3 of the footage of adverting films and mode 3 remains subject to capital ownership restriction, with a maximum percentage of 49%.

Brazil has added mode 2 commitments in market research and public opinion polling, management consulting and services related to management consulting.

We would again like to urge Brazil to make full modes 1-3 commitments in each of these business services sectors.

IV.Canada:revised offer; very little
  • Canada’s revised offer remains the same as its initial – and already disappointing – offer in this sector.
  • Canada has still not committed on many sub sectors in Research and Development (R&D) services.
  • Real estate services still restricted by residency and citizenship requirements on a provincial level.
  • Canada has made no important commitments in any of the “Other Business Services” including advertising, management consulting (still committed at a 5-digit level, rather than a 3-digit level, as requested), placement and supply services of personnel, security services, related scientific and technical consulting services, photographic services and printing and publishing services. Only in translation services has there been a small opening, with citizenship requirements lifted in Quebec. Canada should at least take full commitments in advertising services.
  • Canada has made no commitments in grounds maintenance or washing and cleaning services.
  1. Chile:revised offer;
  • Research and Development Services: New offer

Chile has scheduled new modes 1-3 commitments for Research and experimental development services on natural sciences (part of CPC 851, 853 and 86751) while maintaining some restrictions to mode 1 and 3 market access (MA) and national treatment (NT) (authorisation required). Similarly, Chile has scheduled new modes 1-3 commitments in Research and experimental development services on natural sciences and humanities (part of CPC 852 and 853) while leaving some restrictions to mode 1 and 3 NT (permit required). Finally, Chile has proposed new modes 1-3 commitments in Interdisciplinary research and experimental development services (part of CPC 851,852, 853 and 86751) while leaving some restrictions to mode 1 and 3 NT (authorisation required).

  • Real Estate Services:Not enough

Chile has removed mode 3 MA and NT limitations on Real estate services involving own or leased property (CPC 821) and on Real estate services on a fee or contract basis (CPC 822). This is a welcome start but Chile should further open those Real Estate Services.

  • Other Business services:New offer

Advertising services: In Sale or leasing services of advertising space or time (CPC 8711) and Planning, creating and placement services of advertising (CPC 8712), full modes 1-3 commitments have been taken. Chile should commit at three-digit level i.e. CPC 871.Market research and public opinion polling services: In market research services (CPC 8641) and public opinion polling services (CPC 8642), full modes 1-3 commitments have been taken. Chile has thus committed at three-digit level i.e. CPC 864.Building cleaning services (CPC 874): Full modes 2-3 commitments have been taken.

Photographic services (CPC 875) except CPC 87504: Full modes 1-3 commitments have been taken.Packaging services (CPC 876): Full modes 2-3 commitments have been taken.Services provided during summits and meetings (CPC 877): Full modes 2-3 commitments have been taken.Management consulting services: Full modes 1-3 commitments have been taken in General management consulting services (CPC 86501), Marketing management consulting services (CPC 86503), Human resource management consulting services (CPC 86504), Production management consulting services (CPC 86505) and Public relations services (CPC 86506). Mode 3 restrictions have been lifted in financial management consulting services (CPC 86502). As for Services related to management consulting for energy services (part of CPC 86601), Chile has gone backward in mode 1 MA - which is now unbound - but it has removed the possibility of discriminatory subsidies for Chilean citizens.

In conclusion, Chile has committed in many new sectors but much remains to be done. Chile should extend its commitments to other sectors such as Grounds maintenance (part of CPC 88110) and Washing and cleaning services (CPC 97011-97014).

  1. China:revised offer
  • Real Estate Services: satisfactory

China has scheduled commitments in Real estate services involving own or leased property (CPC 821) and Real estate services on a fee or contract basis (CPC 822). For CPC 821, China’s revised version presents new mode 3 MA commitments as wholly owned enterprises are now permitted. For CPC 822, similar commitments have been made. Real estate services on a fee or contract basis are now permitted in the form of wholly foreign-owned enterprises.

  • Other Business Services: decent

In advertising services (CPC 871), China has made a limitation on MA requiring firms to work through advertising agents registered in China. ESF would like to see this restriction removed but notes that, for mode 3, China will allow wholly foreign-owned subsidiaries.

In management consulting services (CPC 865), China has limited foreign participation to joint ventures; ESF welcomes China’s commitment, in its revised offer, to lift those restrictions in the near future so that China will receive the full benefit of foreign expertise in this field.

China has also made mode 1 commitments in technical testing and analysis (CPC 8676) and freight inspection covered by CPC 749. China also intends to take mode 3 commitments (China will allow wholly foreign-owned subsidiaries in the near future).

China has also made modes 1-3 commitments in Related scientific technical consulting services (CPC 8675, 86751, 86752), though these are limited to petroleum exploitation in cooperation with Chinese partners. We would like to see these limitations removed with full commitments. China has also made a commitment in “onshore oil field services,” though only in cooperation with China National Petroleum Corp. and in designated areas approved by the Chinese government. All data records, samples, vouchers and other original information acquired during the implementation of petroleum operations shall remain property of CNPC.

ESF appreciates that China has added building cleaning services (CPC 874) to its initial offer, as well as Market research services (CPC 86401) – but only limited to investigation services designed to secure information on the prospects and performance of an organization’s products and with mode 3 MA restrictions – and services related to management consulting - but only limited to project management services other than for construction and with mode 3 MA restrictions – to its revised offer as per the EC request. Under similar conditions, China has also committed on Placement and supply services of personnel (CPC 872 excluding CPC 87209). ESF would like security services (CPC 87302-87309) to be added to its offer.

In addition, ESF appreciates China’s scheduling commitments in photographic, packaging, printing of packaging materials on a fee or contract basis, convention, translation and interpretation services and hope these facilitate real new business opportunities.

VII.Columbia:initial offer;
  • Research & Development Services: good

Colombia’s leadership in R&D services is very welcome. Modes 1-3 MA commitments and modes 1-2 NT commitments were made in R&D services in natural sciences (CPC 85101), Social Sciences & humanities (CPC 852) and Interdisciplinary R&D services (CPC 853). We would like to see other countries follow Colombia’s example in this sector.

  • Rental/Leasing services concerning other means of transport without operator: limited

Nothing new has been offered here. Colombia has committed modes 2 and 3.

  • Other business services: limited

Colombia has made new modes 2 &3 commitments in market research and public opinion polling (CPC 864), technical testing and analysis services (CPC 8676)—though foreign firms must ensure technology transfer to local firms and building cleaning services (CPC 874). In addition, Colombia has moved management consulting services to “Other business services” for the sake of alignment with the W/120 classification, though the offer remains the same. These are all very welcome moves that ought to be expanded in the ongoing negotiations.

VIII.Egypt: revised offer; nothing new, no URcommitments, weak

Egypt has not taken any commitment in these very important sectors for the development of the economy, despite the EC requests that covered 12 sub sectors. ESF would like Egypt to take commitments to be taken in Advertising (CPC 871), management consulting services (CPC 864), as to complete the new offer in computer related services, Maintenance and repair of equipment not including transport equipment (CPC 633 + 8861-8866), services incidental to mining and to manufacturing (CPC 883 & 884), etc.

IX.Hong-Kong: revised offer; acceptable
  • Research and Development Services: no progress

Hong Kong has made no commitment in R&D services, despite the EC’s request.

  • Real Estate Services: good

This is a good offer. Hong Kong has made full commitments in real estate services involving own or leased property (CPC 821) and on a fee or contract basis (CPC 822) in MA and NT in modes 1, 2 and 3, as per the EC request.

  • Rental and Leasing Services Without Operators: acceptable

On services relating to ships, Hong Kong has made MA and NT commitments on modes 1, 2 and 3. However, mode 3 NT includes the restriction that “income derived from international operation of ships registered in the Hong Kong Shipping Register is exempted from Hong Kong’s profits tax.”Unfortunately, Hong Kong has made no new commitments in services relating to other transport equipment and other machinery.

  • Other Business Services: good

In advertising services, Hong Kong has made NT commitments in modes 1 and 2 and extended sectoral coverage to all of CPC 871, as per the EC request. We welcome this move. Hong Kong has also expanded sectoral coverage in market research and public opinion polling to include all of CPC 864. However, modes 1 and 4, and mode 3 NT remain unbound.

Hong Kong has put forward a very good offer on management consulting services, expanding sectoral coverage to all of CPC 865 and making full commitments in modes 1, 2 and 3. Furthermore, HK has made new, full commitments in modes 1, 2 and 3 in services related to management consulting, technical testing and analysis services, services incidental to manufacturing, placement and supply services of personnel, investigation services, security services and printing, publishing services.

X.India: revised offer;
  • Research and Development Services: improved

India has added mode 1 commitments on R&D services in agriculture and modes 1-3 commitments on R&D services in social science and the humanities. It has also removed its foreign equity ceiling on its existing commitment on R&D services, though access is limited to incorporation and FIPB approval is required.

  • Real Estate Services: new offer

India has made new commitments for Real estate on a fee or contract basis (CPC 822), though foreign investors must have had prior collaboration with an Indian real estate firm and access is subject to FIPB approval.

  • Rental and Leasing Services (without operators): new offer

India has made new commitments relating to ships and aircraft, though FIPB approval is required for MA.

  • Other business services: several new sectors offered

India has made new modes 1-3 commitments in management consulting, services related to management consulting, services incidental to fishing, services incidental to energy distribution, placement and supply of personnel, maintenance and repair of equipment, building cleaning services, packaging, convention, specialty design & photographic services. As in the abovementioned sectors, MA is subject to FIPB approval.

India has also lifted its foreign equity ceiling for its existing commitment in technical testing and analysis.

XI.Indonesia: initial offer;
  • R & D Services:no offer, weak commitments

No progress has been made in this area and the UR commitments only cover part of interdisciplinary R&D. ESF calls on Indonesia to do more to open up this vital sector for its future development.

  • Real Estate Services:no offer, no current commitments
  • Rental and Leasing Services without Operators:no offer, no current commitments

ESF is very disappointed that Indonesia’s offer has not improved these sectors.

  • Other business services – no offer

For the vast majority of the sectors, including advertising, market research, management consulting and services incidental to agriculture and fisheries, Indonesia has no commitments and makes no new offer. Project management, technical testing, services incidental to manufacturing and maintenance and repair of equipment are committed but very restricted and no offer has been made. This is extremely disappointing from ESF’s perspective.

XII.Israel: initial offer; decent

Israel’s previous schedule of commitments included modes 1-3 in Advertising, Market research and public opinion, Management consulting, Related scientific and technical consulting services, and photographic services. Placement and supply services of personnel (domestic market only) was only committed for mode 3. Israel also clarified which specific subsectors of “Services incidental to mining and oil-field (CPC 8830)” were opened for mode 3.This is a good start, but we would like to see more services included in the revised offer.

XIII.Japan:initial offer (revised offer not analysed);
  • Research and Development Services: more needed

The EC has requested that Japan make commitments on R&D services in the natural sciences and interdisciplinary R&D, but Japan has so far only committed to R&D in social sciences and humanities. Japan has committed to removing mode 3 limitations on NT.

  • Real Estate Services: weak

Despite the EC’s requests, Japan has maintained a commercial presence requirement for Real estate services on a fee or contract basis (for property in Japan) CPC 822.

  • Other Business Services: not enough

Japan has maintained limited commitments in services related to management consulting (CPC 86601, 86609) despite the EC’s request that Japan commit at three-digit level.Japan has furthermore made no commitments in technical testing and analysis services. Japan has made commitments in mode 3 in placement and supply of services of personnel, but modes 1 and 2 remain unbound. However, Japan has not expanded sectoral coverage to all of CPC 872. Japan has made new commitments on investigation services in modes 1, 2 and 3. Commitments in Related scientific and technical consulting services have not been expanded to four-digit level (CPC 8675) and commercial presence requirements (mde1 & 2) remain in surveying services for land in Japan.

XIV.Korea:revised offer;
  • R & D Services: decent

Korea has included research and development services on natural sciences (CPC 851) and interdisciplinary research and development services. In addition, modes 1 & 2 MA limitations on R&D services in the social sciences and humanities are to be removed.

  • Real Estate Services: decent

Korea has tabled new commitments on brokerage and appraisal services, with no mode 2 restrictions for real estate located abroad. Modes 1 and 4 remain unbound. We hope this will create new opportunities in the country.

  • Rental and Leasing Services without Operators: decent

We are pleased that Korea has removed mode 1-2 MA restrictions on services relating to ships (CPC 83103) and has added “Other: leasing or rental services concerning personal or household goods.”

  • Other business services: good

In addition to existing commitments in advertising, market research, management consulting (now at 3-digit level), project management, composition and purity testing and analysis, technical inspection, consulting related to agriculture and animal husbandry, services incidental to forestry (excluding aerial fire fighting and disinfection), consulting services related to fishing, packaging, printing, convention agency, stenography & translation and interpretation services (all of which have removed mode 1-2 MA restrictions), Korea has added services incidental to mining, services incidental to manufacturing & placement services of personnel, surface surveying & mapmaking (excluding cadastral survey & maps), maintenance and repair of equipment, publishing (except newspapers and periodicals) and specialty design services..