Benefitting from Access under Trade Agreements

1. Benefitting from Access under Trade Agreements S. H. Allyson Francis CARICOM Secretariat EPA Implementation Unit sfrancis@caricom.org sfrancis@hotmail.com

2. Outline • CARICOM • EPA (background & provisions) • Services • Provisions • Schedule for Management Consulting Services • Schedule for Services Related to Management Consulting services • Challenges, Opportunities, weaknesses & Strengths (COWS) • Supply-side, demand-side, implementation issues • Next steps

3. CARICOM Requirements Key Principles underpinning the CSME • Equal rights and treatment for all persons of Member States in the Market; • Nondiscrimination (Article 7) • Most Favored Nation Treatment (Article 8) Completion of the CSME includes: • the free movement of services • the unrestricted movement of capital • the free movement of selected categories of skills • the right of CARICOM nationals to set up business in any CARICOM country (the right of establishment). Removal of Discriminatory Restrictions to Provision of Services, Article 37(1)

4. CARICOM Requirements • Establishment of the Competent Authority • Free Movement Committee • Free Movement of Skills Department/Desk • National Accreditation Body • Implement relevant procedures at point of entry

5. CARICOM • Professional Associations in most States • National system not in place in most States for registration • Domestic regulations vary in Member States; • Need for convergence; • Registration • Accreditation • Mutual recognition

6. The EPA • Objectives • Reduction & eventual eradication of poverty through trade partnership; • Promoting regional integration, economic cooperation and good governance; • Promoting the integration of CF States into the world economy; • Support for increasing investment & private sector initiative; and • Strengthening relations taking into consideration levels of development and int’l obligations

7. Services trade Services are traded by four modes • Mode 1 - Cross-border trade (the supplier or the consumer do not move e.g. advisory services via the internet, providing drafts); • Mode 2 - Consumption abroad (the consumer moves to obtain the service e.g. tourism, non-national purchasing Consulting services paid from their home country); • Mode 3 - Commercial presence (the supplier establishes in the territory to supply a service e.g. branches); and • Mode 4 - Movement of natural persons (temporary movement of the supplier to provide a service e.g. consultancy services)

8. Services Title • Chapter 1 – General Provisions • Chapter 2 – Commercial Presence • Chapter 3 – Cross Border Supply of Services • Chapter 4 - Temporary Presence of Natural Persons for Business Purpose • Chapter 5 – Regulatory Framework (MR, Computer, Courier, Telecom, Financial, Int’l Maritime & Tourism) • Chapter 6 – Electronic Commerce • Chapter 7 - Cooperation

9. General Provisions • An arrangement for the progressive, reciprocal & asymmetric liberalization • Do not apply to subsidies • States retain the right to regulate & introduce new regulations to meet legitimate policy objectives • Do not apply to measures regarding citizenship, residence or employment • Measure must not be applied to nullify or impair benefits • Future liberalization no later than 5 yrs from date of entry into force

10. General Provisions (cont’d) • Bahamas & Haiti to schedule commitments no later than 6 months after signature (preferential treatment not applicable until) • Recognize the importance of Reg. Int. • Does not include activities in the exercise of governmental authority • Do not apply to activities such as mining, manufacturing, processing of nuclear materials, production of arms, audio-visual services, nat’l & int’l air transport etc.

11. Market Access (MA) • Parties shall accord treatment no less favorable than that provided for in the specific commitments • Measures not to be maintained unless specified- Limitations such as on • the number of commercial presences (quotas, monopolies, exclusive rights or other requirements such as ENT) • the total value of transactions or assets • the total number of operations or quantity of output • the participation of foreign capital • specific types of commercial presence

12. National Treatment (NT) Where there are MA commitments States shall grant treatment no less favorable than that accorded to their own like service provider (treatment will be considered less favorable if it modifies the conditions of competition in favor of the other party)

13. Most-Favored Nation Treatment (MFN) • The EC shall accord treatment no less favorable than the most favorable accorded to third country with whom they conclude & agreement with after signature of the EPA • CF shall accord treatment no less favorable than the most favorable accorded to any major trading economy – (major trading economy is any country with more than 1% world share in merchandise trade or group with more that 1.5%)

14. Temporary Presence of Natural Persons for Business Purposes • Key Personnel – National employed by a legal entity responsible for setting up or the proper control (all sectors liberalised under mode 3) • Business visitors – must be in a senior position, do not engage in direct transaction with the gen. public & do not receive payment from a source in the host • Intra-corporate transfers – must have been employed or partners for at least 1year, transferred on a temporary basis • Managers (directing, supervising auth. to recruit or dismiss or recom.) • Specialists (must possess uncommon knowledge)

15. Temporary Presence of Natural Persons (cont.) Graduate trainees – national employed by a legal entity for at least 1 year, possess a university degree, temporarily transferred for career development & training in business techniques or methods (recipient co. may be required to submit training programme) For all sectors liberalised under mode 3

16. Business Service Sellers (BSS) Representatives of a service supplier seeking temporary entry to negotiate the sale of services or entering into agreements to sell services • For all sector liberalized • Temporary entry for 90days • Do not engage in making direct sales to the public • Do not receive remuneration from a source in the host State For all sectors liberalised under modes 1, 2 & 3

17. Contractual Services Suppliers National employed by a legal entity, with no commercial presence in the other territory, have concluded a bona fide contract requiring temporary presence to fulfill

18. Conditions for CSS • Must have a registered business or an employee of a juridical person • Must possess a university degree or equivalent and professional qualifications (except fashion model chef de cuisine & entertainment); • Must first obtain a service contract must not exceed a period of twelve months; • Must have been an employee of the juridical person for at least 1 year immediately preceding application;

19. Conditions for CSS (cont.) • Must possess at least three years professional experience; • Remuneration only for the contract; and • Subject to Economic Needs Test (ENT) - The main criteria will be the assessment of the relevant market situation in the Member State or the region where the service is to be provided, including with respect to the number of, the impact on, existing services suppliers

20. Independent Professional National, self-employed with no commercial presence in the other territory, have concluded a bona fide contract requiring temporary presence to fulfill

21. Conditions for IP • Self employed • Must possess a university degree or equivalent and professional qualifications; • Must first obtain a service contract must not exceed a period of twelve months; • Must have at least 6 years professional experience at the date of application; • Subject to Economic Needs Test (ENT) - The main criteria will be the assessment of the relevant market situation in the Member State or the region where the service is to be provided, including with respect to the number of, the impact on, existing services suppliers

22. Other Provisions • Short Term visitors for business purposes • Research and Design; Marketing research; Training seminars; Trade Fairs; Sales; Purchasing; Provided they are not engaged in selling their services to the general public; do not receive remuneration in the territory of temporary stay, not to engage through a contract outside of the territory of temporary stay; Temporary stay up to 90 days

23. Qualifications 'qualifications' means diplomas, certificates and other evidence (of formal qualification) issued by an authority designated pursuant to legislative, regulatory or administrative provisions and certifying successful completion of professional training.

24. Mutual Recognition (MR) Nothing in this Title shall prevent the Parties from requiring that natural persons must possess the necessary qualifications and/or professional experience specified in the territory where the service is supplied, for the sector of activity concerned. Professional bodies encouraged to Jointly develop & provide recommendations on MR of criteria applied re authorisation, licensing, operation and certification Negotiations to start no later than 3 years after entry into force of the Agreement

25. MR (cont.) Start with accounting, architecture, engineering & tourism Recommendations to be reviewed by the Joint Committee for consistency If consistent negotiate through comp. auth a MRA Consistent with GATS Art. VII – , shall not be in a manner which constitutes a means of discrim. between countries in its application & shall afford oppor. for other interested Mem to negot. CF- EU Trade & Development Committee to review progress every 2 years

26. Procedures Where a specific commitment has been made & authorization is required, the competent authorities of the Parties shall, within a reasonable period of time after the submission of an application considered complete inform the applicant of the decision concerning the application. The Parties shall maintain or institute judicial, arbitral or administrative tribunals or procedures which provide, at the request of an affected investor or service supplier, for a prompt review of, and where justified, appropriate remedies for, administrative decisions.

27. Cooperation Cooperate by providing support through technical assistance, training & capacity building: Improve ability to gather information on & meet regulations & standards of the EU; Improve export capacity particularly marketing of tourism & cultural services, SMEs; Facilitate interaction & dialogue;

28. Cooperation (cont.) Address quality & standards needs under the agreement & domestic & regional markets. Also ensure participation in the development & adoption of sustainable tourism standards; Developing & implementing regulatory regimes; and Mechanisms for promoting investment & joint ventures & enhancing the capacities of IPA

29. EU Commitments The EU have scheduled their reservations in four different sections Cross-border supply of services; Commitments on Establishment (Commercial Presence); Reservations on Contractual Service Suppliers (CSS) & Independent Professionals (IP)- Reservations on Key Personnel and Graduate Trainees.

30. Cross-border provision Horizontal limitations on acquisition of land and real estate by foreign investors

31. Commercial Presence Commitments Commercial presence (Mode 3) Horizontal limitations • Limitations on acquisition of land and real estate by foreign investors in 19 Member states • Limitations on the type of establishment includes limitation on the treatment accorded to branches or agencies established in a Member State by a third country company, also, residency & nationality conditions in the composition of the board of directors

32. Commercial presence horizontal limitations (Cont.) • EC reserve their right to prohibit or regulate the acquisition of a juridical person for overriding reasons of general interest in so far as they comply with Community law and international obligations. • Prior authorization; and • Limitation on foreign participation

33. Movement of Natural Persons Those measures (e.g. need to obtain a license, need to register with the Registrar of Companies, universal service obligations, need to obtain recognition of qualifications in regulated sectors, need to pass specific examinations, including language examinations, non-discriminatory requirement that certain activities may not be carried out in environmental protected zones or areas of particular historic and artistic interest), even if not listed, apply in any case to service suppliers of the other Party.

34. Key Personnel & Graduate Trainees • 2 Member States, BG & HU require ENT for Graduate Trainees); • The number of ICT must not exceed 10%(BG), Unbound HU; • Restriction for Managing Directors and Auditors include - Residency requirement, trade permit, specific authorization (AT, FI, FR, RO, SE) • EU directives on mutual recognition of diplomas only apply to EU nationals.

35. Key Personnel & Graduate Trainees (Cont.) • EU directives on mutual recognition of diplomas only apply to EU nationals. The right to practise a regulated professional service in one Member State does not grant the right to practise in another Member State – (In order for third-country nationals to obtain EC-wide recognition of their qualifications, it is necessary to negotiate a Mutual Recognition Agreement)

36. Key Personnel & Graduate Trainees (Cont.) • Commitments on key personnel and graduate trainees do not apply in cases where the intent or effect of their temporary presence is to interfere with or otherwise affect the outcome of any labour/management dispute or negotiation

37. Contractual Service Suppliers (CSS) The EU made commitments in 29 sectors For the EC 10 commitments enter into force in 2011 For Bulgaria & Romania 2014 EC directives on mutual recognition of diplomas only apply to nationals of EU Member States. The right to practise a regulated professional service in one Member State does not grant the right to practise in another Member State. (In order for third-country nationals to obtain EC-wide recognition of their qualifications, it is necessary a Mutual Recognition Agreement to be negotiated)

38. Areas of access for CARIFORUM CSS in the EU Legal advisory services in respect of international public law and foreign law Accounting and bookkeeping services Taxation advisory services Architectural services Urban planning and landscape architecture services Engineering services Integrated Engineering services Medical and dental services Veterinary services Midwives services

39. Areas of access for CARIFORUM CSS in the EU (cont’d) 11.Services provided by nurses, physiotherapists and paramedical personnel 12. Computer and related services 13. Research and development services Advertising services Market Research and Opinion Polling Management consulting services Services related to management consulting Technical testing and analysis services Related scientific and technical consulting services Maintenance and repair of equipment

40. Areas of access for CARIFORUM CSS in the EU (cont’d) 21. Chef de cuisine services 22. Fashion model services 23. Translation and interpretation services 24. Site investigation work 25. Higher education services (only privately-funded services) 26. Environmental services 27. Travel agencies and tour operators' services 28. Tourist guides services 29. Entertainment services other than audiovisual services

41. Independent Professionals (IP) Market access was granted in 11 sectors. Legal advisory services in respect of international public law and foreign law (i.e. non-EU law) Architectural services Urban planning and landscape architecture services Engineering services Integrated Engineering services Computer and related services Research and development services Market Research and Opinion Polling Management consulting services Services related to management consulting Translation and interpretation services

42. CARIFORUM Commitments GATS structure – does not include The Bahamas & Haiti • Takes into account regional integration progress and sensitivities of individual states/sub-groupings • Key personnel & Graduate trainee where there is a mode 3 commitment, subj. to an ENT – Main criterion is availability of persons with the requisite skills in the local labour market (mode 4) or an assessment of the relevant market situation ie. number of & impact on existing service suppliers

43. CARIFORUM Horizontal commitments • Treatment may be reserved with respect to subsidies or grants • Mode 3 – requirements for incorporation, registration & limitation on the acquisition of land • Mode 4 – Unbound except for Key Personnel & graduate trainees not available locally

44. Movement of Natural Persons In those sectors in which economic needs tests (ENTs) are applied for Mode 4, the main criterion will be availability of persons with the requisite skills in the local labour market. With regard to other modes of supply, the main criteria for ENTs will be the assessment of the relevant market situation where the service is to be provided, with respect to the number of, and the impact on, existing service suppliers.

45. Management consulting Services

46. Classification of Management Consulting Services (UNCPC) 86501 - General management consulting services 86502 - Financial management consulting services (except business tax) 86503 - Marketing management consulting services 86504 - Human resources management consulting services 86505 - Production management consulting services 86506 - Public relations services 86509 - Other management consulting services

47. Classification of Services Relating to Management Consulting • 86601 Project management services other than for construction • 86602 Arbitration and conciliation services • 86609 Other management services n.e.c.

48. EU Commitments in Management consulting services • Modes 1), 2) & 3) None • CSS & IP - CY, DE, EE, EL, FR, IE, LV, LU, MT, NL, PT, SI, SE, UK: None. • ES, IT, PL: Economic needs test for IPs • BE: Economic needs test, except for CSS when the annual wage is above the amount defined by the relevant laws and regulations. • DK: Economic needs test except for CSS stays of up to three months • AT, BG, CZ, FI, HU, LT, RO, SK: Economic needs test.

49. EU Commitments in Services related to Management Consulting • Modes 1) & 2) None • Mode 3 - HU: Unbound for arbitration and conciliation services • CSS & IP - CY, DE, EE, EL, FR, IE, LV, LU, MT, NL, PT, SI, SE, UK: None • ES, IT, PL: Economic needs test for IPs • BE: Economic needs test, except for CSS when the annual wage is above the amount defined by the relevant laws and regulations. • DK: Economic needs test except for CSS stays of up to three months • AT, BG, CZ, FI, HU, LT, RO, SK: Economic needs test.

50. CARIFORUM Commitments in Management Consulting • ATG, BRB, BEL, DMA, DOM, GUY, JAM, KNA, LCA, VCT, GRD (Except 86506 - Public relations services) • SUR (Except86509 - Other management consulting services) • TTO (CPC 86503 - Marketing management consulting services)