Agreement Establishing the World Trade Organization
Annex 1B: General Agreement on Trade in Services
PART V: INSTITUTIONAL PROVISIONS
Article XXII: Consultation
1. Each Member shall accord sympathetic consideration to, and
shall afford adequate opportunity for, consultation regarding
such representations as may be made by any other Member with respect
to any matter affecting the operation of this Agreement. The Dispute
Settlement Understanding (DSU) shall apply to such consultations.
2. The Council for Trade in Services or the Dispute Settlement
Body (DSB) may, at the request of a Member, consult with any Member
or Members in respect of any matter for which it has not been
possible to find a satisfactory solution through consultation
under paragraph 1.
3. A Member may not invoke Article XVII, either under this Article
or Article XXIII, with respect to a measure of another Member
that falls within the scope of an international agreement between
them relating to the avoidance of double taxation. In case of
disagreement between Members as to whether a measure falls within
the scope of such an agreement between them, it shall be open
to either Member to bring this matter before the Council for Trade
in Services. 11 The Council shall refer the matter to arbitration. The decision of the arbitrator shall be final and binding on the Members.
Article XXIII: Dispute Settlement and Enforcement
1. If any Member should consider that any other Member fails to
carry out its obligations or specific commitments under this Agreement,
it may with a view to reaching a mutually satisfactory resolution
of the matter have recourse to the DSU.
2. If the DSB considers that the circumstances are serious enough
to justify such action, it may authorize a Member or Members to
suspend the application to any other Member or Members of obligations
and specific commitments in accordance with Article 22 of the
3. If any Member considers that any benefit it could reasonably
have expected to accrue to it under a specific commitment of another
Member under Part III of this Agreement is being nullified or
impaired as a result of the application of any measure which does
not conflict with the provisions of this Agreement, it may have
recourse to the DSU. If the measure is determined by the DSB to
have nullified or impaired such a benefit, the Member affected
shall be entitled to a mutually satisfactory adjustment on the
basis of paragraph 2 of Article XXI, which may include the modification
or withdrawal of the measure. In the event an agreement cannot
be reached between the Members concerned, Article 22 of the DSU
Article XXIV: Council for Trade in Services
1. The Council for Trade in Services shall carry out such functions
as may be assigned to it to facilitate the operation of this Agreement
and further its objectives. The Council may establish such subsidiary
bodies as it considers appropriate for the effective discharge
of its functions.
2. The Council and, unless the Council decides otherwise, its
subsidiary bodies shall be open to participation by representatives
of all Members.
3. The Chairman of the Council shall be elected by the Members.
Article XXV: Technical Cooperation
1. Service suppliers of Members which are in need of such assistance
shall have access to the services of contact points referred to
in paragraph 2 of Article IV.
2. Technical assistance to developing countries shall be provided
at the multilateral level by the Secretariat and shall be decided
upon by the Council for Trade in Services.
Article XXVI: Relationship with Other International
The General Council shall make appropriate arrangements for consultation
and cooperation with the United Nations and its specialized agencies
as well as with other intergovernmental organizations concerned
PART VI: FINAL PROVISIONS
Article XXVII: Denial of Benefits
A Member may deny the benefits of this Agreement:
(a) to the supply of a service, if it establishes that the service
is supplied from or in the territory of a non-Member or of a Member
to which the denying Member does not apply the WTO Agreement;
(b) in the case of the supply of a maritime transport service,
if it establishes that the service is supplied:
(i) by a vessel registered under the laws of a non-Member or
of a Member to which the denying Member does not apply the WTO
(ii) by a person which operates and/or uses the vessel in whole
or in part but which is of a non-Member or of a Member to which
the denying Member does not apply the WTO Agreement;
(c) to a service supplier that is a juridical person, if it establishes
that it is not a service supplier of another Member, or that it
is a service supplier of a Member to which the denying Member
does not apply the WTO Agreement.
Article XXVIII: Definitions
For the purpose of this Agreement:
(a) "measure" means any measure by a Member, whether
in the form of a law, regulation, rule, procedure, decision, administrative
action, or any other form;
(b) "supply of a service" includes the production,
distribution, marketing, sale and delivery of a service;
(c) "measures by Members affecting trade in services"
include measures in respect of
(i) the purchase, payment or use of a service;
(ii) the access to and use of, in connection with the supply
of a service, services which are required by those Members to
be offered to the public generally;
(iii) the presence, including commercial presence, of persons
of a Member for the supply of a service in the territory of another
(d) "commercial presence" means any type of business
or professional establishment, including through
(i) the constitution, acquisition or maintenance of a juridical
(ii) the creation or maintenance of a branch or a representative
within the territory of a Member for the purpose of supplying
(e) "sector" of a service means,
(i) with reference to a specific commitment, one or more, or
all, subsectors of that service, as specified in a Member's Schedule,
(ii) otherwise, the whole of that service sector, including
all of its subsectors;
(f) "service of another Member" means a service which
(i) from or in the territory of that other Member, or in the
case of maritime transport, by a vessel registered under the laws
of that other Member, or by a person of that other Member which
supplies the service through the operation of a vessel and/or
its use in whole or in part; or
(ii) in the case of the supply of a service through commercial
presence or through the presence of natural persons, by a service
supplier of that other Member;
(g) "service supplier" means any person that supplies
a service; 12
(h) "monopoly supplier of a service" means any person,
public or private, which in the relevant market of the territory
of a Member is authorized or established formally or in effect
by that Member as the sole supplier of that service;
(i) "service consumer" means any person that receives
or uses a service;
(j) "person" means either a natural person or a juridical
(k) "natural person of another Member" means a natural
person who resides in the territory of that other Member or any
other Member, and who under the law of that other Member:
(i) is a national of that other Member; or
(ii) has the right of permanent residence in that other Member,
in the case of a Member which:
1. does not have nationals; or
2. accords substantially the same treatment to its permanent
residents as it does to its nationals in respect of measures affecting
trade in services, as notified in its acceptance of or accession
to the WTO Agreement, provided that no Member is obligated to
accord to such permanent residents treatment more favourable than
would be accorded by that other Member to such permanent residents.
Such notification shall include the assurance to assume, with
respect to those permanent residents, in accordance with its laws
and regulations, the same responsibilities that other Member bears
with respect to its nationals;
(l) "juridical person" means any legal entity duly
constituted or otherwise organized under applicable law, whether
for profit or otherwise, and whether privately-owned or governmentally-owned,
including any corporation, trust, partnership, joint venture,
sole proprietorship or association;
(m) "juridical person of another Member" means a juridical
person which is either:
(i) constituted or otherwise organized under the law of that
other Member, and is engaged in substantive business operations
in the territory of that Member or any other Member; or
(ii) in the case of the supply of a service through commercial
presence, owned or controlled by:
(n) a juridical person is:
(i) "owned" by persons of a Member if more than 50
per cent of the equity interest in it is beneficially owned by
persons of that Member;
(ii) "controlled" by persons of a Member if such persons
have the power to name a majority of its directors or otherwise
to legally direct its actions;
(iii) "affiliated" with another person when it controls,
or is controlled by, that other person; or when it and the other
person are both controlled by the same person; and
(o) "direct taxes" comprise all taxes on total income,
on total capital or on elements of income or of capital, including
taxes on gains from the alienation of property, taxes on estates,
inheritances and gifts, and taxes on the total amounts of wages
or salaries paid by enterprises, as well as taxes on capital appreciation.
Article XXIX: Annexes
The Annexes to this Agreement are an integral part of this Agreement.
Annex on Article II Exemptions
1. This Annex specifies the conditions under which a Member, at
the entry into force of this Agreement, is exempted from its obligations
under paragraph 1 of Article II.
2. Any new exemptions applied for after the date of entry into
force of the WTO Agreement shall be dealt with under paragraph
3 of Article IX of that Agreement.
3. The Council for Trade in Services shall review all exemptions
granted for a period of more than five years. The first such review
shall take place no more than five years after the entry into
force of the WTO Agreement.
4. The Council for Trade in Services in a review shall:
5. The exemption of a Member from its obligations under paragraph
1 of Article II of the Agreement with respect to a particular
measure terminates on the date provided for in the exemption.
6. In principle, such exemptions should not exceed a period of
10 years. In any event, they shall be subject to negotiation in
subsequent trade-liberalizing rounds.
7. A Member shall notify the Council for Trade in Services at
the termination of the exemption period that the inconsistent
measure has been brought into conformity with paragraph 1 of Article
II of the Agreement.
Lists of Article II Exemptions
[The agreed lists of exemptions under paragraph 2 of Article II
appear as part of this Annex in the treaty copy of the WTO Agreement.]
Annex on Movement of Natural Persons Supplying Services
under the Agreement
1. This Annex applies to measures affecting natural persons who
are service suppliers of a Member, and natural persons of a Member
who are employed by a service supplier of a Member, in respect
of the supply of a service.
2. The Agreement shall not apply to measures affecting natural
persons seeking access to the employment market of a Member, nor
shall it apply to measures regarding citizenship, residence or
employment on a permanent basis.
3. In accordance with Parts III and IV of the Agreement, Members
may negotiate specific commitments applying to the movement of
all categories of natural persons supplying services under the
Agreement. Natural persons covered by a specific commitment shall
be allowed to supply the service in accordance with the terms
of that commitment.
4. The Agreement shall not prevent a Member from applying measures
to regulate the entry of natural persons into, or their temporary
stay in, its territory, including those measures necessary to
protect the integrity of, and to ensure the orderly movement of
natural persons across, its borders, provided that such measures
are not applied in such a manner as to nullify or impair the benefits
accruing to any Member under the terms of a specific commitment.
Annex on Air Transport Services
1. This Annex applies to measures affecting trade in air transport
services, whether scheduled or non-scheduled, and ancillary services.
It is confirmed that any specific commitment or obligation assumed
under this Agreement shall not reduce or affect a Member's obligations
under bilateral or multilateral agreements that are in effect
on the date of entry into force of the WTO Agreement.
2. The Agreement, including its dispute settlement procedures,
shall not apply to measures affecting:
(a) traffic rights, however granted; or
(b) services directly related to the exercise of traffic rights,
except as provided in paragraph 3 of this Annex.
3. The Agreement shall apply to measures affecting:
(a) aircraft repair and maintenance services;
(b) the selling and marketing of air transport services;
(c) computer reservation system (CRS) services.
4. The dispute settlement procedures of the Agreement may be invoked
only where obligations or specific commitments have been assumed
by the concerned Members and where dispute settlement procedures
in bilateral and other multilateral agreements or arrangements
have been exhausted.
5. The Council for Trade in Services shall review periodically,
and at least every five years, developments in the air transport
sector and the operation of this Annex with a view to considering
the possible further application of the Agreement in this sector.
(a) "Aircraft repair and maintenance services" mean
such activities when undertaken on an aircraft or a part thereof
while it is withdrawn from service and do not include so-called
(b) "Selling and marketing of air transport services"
mean opportunities for the air carrier concerned to sell and market
freely its air transport services including all aspects of marketing
such as market research, advertising and distribution. These activities
do not include the pricing of air transport services nor the applicable
(c) "Computer reservation system (CRS) services" mean
services provided by computerized systems that contain information
about air carriers' schedules, availability, fares and fare rules,
through which reservations can be made or tickets may be issued.
(d) "Traffic rights" mean the right for scheduled and
non-scheduled services to operate and/or to carry passengers,
cargo and mail for remuneration or hire from, to, within, or over
the territory of a Member, including points to be served, routes
to be operated, types of traffic to be carried, capacity to be
provided, tariffs to be charged and their conditions, and criteria
for designation of airlines, including such criteria as number,
ownership, and control.
Continue with the Annex 1B
11 With respect to agreements on the avoidance of double
taxation which exist on the date of entry into force of the WTO Agreement, such a matter may be brought before the Council for Trade in Services only with the consent of both parties to such
12 Where the service is not supplied directly by a juridical person but through other forms of commercial presence such as
a branch or a representative office, the service supplier (i.e.
the juridical person) shall, nonetheless, through such presence
be accorded the treatment provided for service suppliers under
the Agreement. Such treatment shall be extended to the presence
through which the service is supplied and need not be extended
to any other parts of the supplier located outside the territory
where the service is supplied.
13 The sole fact of requiring a visa for natural persons
of certain Members and not for those of others shall not be regarded
as nullifying or impairing benefits under a specific commitment.