                 GENERAL AGREEMENT ON TRADE IN SERVICES


PREAMBLE

PART I     SCOPE AND DEFINITION
      Article I   Scope and Definition

PART II    GENERAL OBLIGATIONS AND DISCIPLINES
      Article II  Most-Favoured-Nation Treatment
      Article III Transparency
      Article III bisDisclosure of Confidential Information
      Article IV  Increasing Participation of
                  Developing Countries
      Article V   Economic Integration
      Article V bisLabour Markets Integration Agreements
      Article VI  Domestic Regulation
      Article VII Recognition
      Article VIIIMonopolies and Exclusive Service
                  Suppliers
      Article IX  Business Practices
      Article X   Emergency Safeguard Measures
      Article XI  Payments and Transfers
      Article XII Restrictions to Safeguard the Balance
                  of Payments
      Article XIIIGovernment Procurement
      Article XIV General Exceptions
      Article XIV bisSecurity Exceptions
      Article XV  Subsidies

PART III   SPECIFIC COMMITMENTS

      Article XVI Market Access
      Article XVIINational Treatment
      Article XVIIIAdditional Commitments


PART IV    PROGRESSIVE LIBERALIZATION
      Article XIX Negotiation of Specific Commitments
      Article XX  Schedules of Specific Commitments
      Article XXI Modification of Schedules

PART V     INSTITUTIONAL PROVISIONS
      Article XXIIConsultation
      Article XXIIIDispute Settlement and Enforcement
      Article XXIVCouncil for Trade in Services
      Article XXV Technical Cooperation
      Article XXVIRelationship with Other International
                  Organizations

PART VI    FINAL PROVISIONS
      Article XXVIIDenial of Benefits 
      Article XXVIIIDefinitions
      Article XXIXAnnexes

Annex on Article II Exemptions
Annex on Movement of Natural Persons supplying Services under the Agreement
Annex on Financial Services
Annex on Telecommunications
Annex on Air Transport Services
Annex on Negotiations on Basic Telecommunications



                 GENERAL AGREEMENT ON TRADE IN SERVICES


Members,

      Recognizing the growing importance of trade in services for the growth 
and development of the world economy;

      Wishing to establish a multilateral framework of principles and rules 
for trade in services with a view to the expansion of such trade under 
conditions of transparency and progressive liberalization and as a means of 
promoting the economic growth of all trading partners and the development of 
developing countries;

      Desiring the early achievement of progressively higher levels of 
liberalization of trade in services through successive rounds of 
multilateral negotiations aimed at promoting the interests of all 
participants on a mutually advantageous basis and at securing an overall 
balance of rights and obligations, while giving due respect to national 
policy objectives;

      Recognizing the right of Members to regulate, and to introduce new 
regulations, on the supply of services within their territories in order to 
meet national policy objectives and, given asymmetries existing with respect 
to the degree of development of services regulations in different countries, 
the particular need of developing countries to exercise this right;

      Desiring to facilitate the increasing participation of developing 
countries in trade in services and the expansion of their service exports 
including, inter alia, through the strengthening of their domestic services 
capacity and its efficiency and competitiveness;

      Taking particular account of the serious difficulty of the least 
developed countries in view of their special economic situation and their 
development, trade and financial needs;

      Hereby agree as follows:



                                 PART I

                          SCOPE AND DEFINITION

                                Article I

                          Scope and Definition


1.    This Agreement applies to measures by Members affecting trade in 
services.

2.    For the purposes of this Agreement, trade in services is defined as 
the supply of a service:

      (a)  from the territory of one Member into the territory of any other 
           Member;

      (b)  in the territory of one Member to the service consumer of any 
           other Member;

      (c)  by a service supplier of one Member, through commercial presence 
           in the territory of any other Member;

      (d)  by a service supplier of one Member, through presence of natural 
           persons of a Member in the territory of any other Member.

3.    For the purposes of this Agreement:

      (a)  "measures by Members" means measures taken by:

           (i)    central, regional or local governments and authorities;  
                  and 

           (ii)   non-governmental bodies in the exercise of powers 
                  delegated by central, regional or local governments or 
                  authorities;

           In fulfilling its obligations and commitments under the 
           Agreement, each Member shall take such reasonable measures as may 
           be available to it to ensure their observance by regional and 
           local governments and authorities and non-governmental bodies 
           within its territory.

      (b)  "services" includes any service in any sector except services 
           supplied in the exercise of governmental authority.

      (c)  A service supplied in the exercise of governmental authority 
           means any service which is supplied neither on a commercial 
           basis, nor in competition with one or more service suppliers.



                                 PART II

                   GENERAL OBLIGATIONS AND DISCIPLINES

                               Article II

                     Most-Favoured-Nation Treatment


1.    With respect to any measure covered by this Agreement, each Member 
shall accord immediately and unconditionally to services and service 
suppliers of any other Member, treatment no less favourable than that it 
accords to like services and service suppliers of any other country.

2.    A Member may maintain a measure inconsistent with paragraph 1 provided 
that such a measure is listed in, and meets the conditions of, the Annex on 
Article II Exemptions.

3.    The provisions of this Agreement shall not be so construed as to 
prevent any Member from conferring or according advantages to adjacent 
countries in order to facilitate exchanges limited to contiguous frontier 
zones of services that are both locally produced and consumed.


                               Article III

                              Transparency


1.    Each Member shall publish promptly and, except in emergency 
situations, at the latest by the time of their entry into force, all 
relevant measures of general application, which pertain to or affect the 
operation of this Agreement.  International agreements pertaining to or 
affecting trade in services to which a Member is a signatory shall also be 
published.

2.    Where publication as referred to in paragraph 1 is not practicable, 
such information shall be made otherwise publicly available.

3.    Each Member shall promptly and at least annually inform the Council 
for Trade in Services of the introduction of any new, or any changes to 
existing, laws, regulations or administrative guidelines which significantly 
affect trade in services covered by its specific commitments under this 
Agreement.

4.    Each Member shall respond promptly to all requests for specific 
information, by any other Member, on any of its measures of general 
application or international agreements within the meaning of paragraph 1.  
Each Member shall also establish one or more enquiry points to provide 
specific information to other Members, upon request, on all such matters as 
well as those subject to the notification requirement in paragraph 3.  Such 
enquiry points shall be established within two years from the entry into 
force of the Agreement Establishing the MTO.  Appropriate flexibility with 
respect to the time-limit within which such enquiry points are to be 
established may be agreed upon for individual developing countries.  Enquiry 
points need not be depositories of laws and regulations.

5.    Any Member may notify to the Council for Trade in Services any 
measure, taken by any other  Member, which it considers affects the 
operation of this Agreement.


                             Article III bis

                 Disclosure of Confidential Information


      Nothing in this Agreement shall require any Member to provide 
confidential information, the disclosure of which would impede law 
enforcement, or otherwise be contrary to the public interest, or which would 
prejudice legitimate commercial interests of particular enterprises, public 
or private.


                               Article IV

            Increasing Participation of Developing Countries


1.    The increasing participation of developing countries in world trade 
shall be facilitated through negotiated specific commitments, by different 
Members pursuant to Parts III and IV of this Agreement, relating to:

      (a)  the strengthening of their domestic services capacity and its 
           efficiency and competitiveness inter alia through access to 
           technology on a commercial basis;

      (b)  the improvement of their access to distribution channels and 
           information networks;  and

      (c)  the liberalization of market access in sectors and modes of 
           supply of export interest to them.

2.    Developed country Members, and to the extent possible other  Members, 
shall establish contact points within two years from the entry into force of 
the Agreement Establishing the MTO to facilitate the access of developing 
countries' service suppliers to information, related to their respective 
markets, concerning:

      (a)  commercial and technical aspects of the supply of services;

      (b)  registration, recognition and obtaining of professional 
           qualifications;  and

      (c)  the availability of services technology.

3.    Special priority shall be given to the least developed countries in 
the implementation of paragraphs 1 and 2 above.  Particular account shall be 
taken of the serious difficulty of the least-developed countries in 
accepting negotiated specific commitments in view of their special economic 
situation and their development, trade and financial needs.


                                Article V

                          Economic Integration


1.    This Agreement shall not prevent any of its Members from being a party 
      to or entering into an agreement liberalizing trade in services 
      between or among the parties to such an agreement, provided that such 
      an agreement:

      (a)  has substantial sectoral coverage[1], and 

      (b)  provides for the absence or elimination of substantially all 
           discrimination, in the sense of Article XVII, between or among 
           the parties, in the sectors covered under sub-paragraph (a), 
           through:

           (i)    elimination of existing discriminatory measures, and/or

           (ii)   prohibition of new or more discriminatory measures,

           either at the entry into force of that agreement or on the basis 
           of a reasonable time-frame, except for measures permitted under 
           Articles XI, XII, XIV and XIV bis.

2.    In evaluating whether the conditions under paragraph 1(b) are met, 
      consideration may be given to the relationship of the agreement to a 
      wider process of economic integration or trade liberalization among 
      the countries concerned. 

3.    (a)  Where developing countries are parties to an agreement of the 
           type referred to in paragraph 1, flexibility shall be provided 
           for regarding the conditions set out in paragraph 1, in 
           particular sub-paragraph (b), in accordance with the level of 
           development of the countries concerned, both overall and in 
           individual sectors and sub-sectors.
      
      (b)  Notwithstanding paragraph 6 below, in the case of an agreement of 
           the type referred to in paragraph 1 involving only developing 
           countries, more favourable treatment may be granted to juridical 
           persons owned or controlled by natural persons of the parties to 
           such an agreement.

4.    Any agreement referred to in paragraph 1 shall be designed to 
      facilitate trade between the parties to the agreement and shall not in 
      respect of any Member outside the agreement raise the overall level of 
      barriers to trade in services within the respective sectors or 
      sub-sectors compared to the level applicable prior to such an 
      agreement. 

5.    If, in the conclusion, enlargement or any significant modification of 
      any agreement under paragraph 1, a Member intends to withdraw or 
      modify a specific commitment inconsistently with the terms and 
      conditions set out in its schedule, it shall provide at least 90 days 
      advance notice of such modification or withdrawal and the procedure 
      set forth in paragraphs 2-4 of Article XXI shall apply.

6.    A service supplier of any other Member that is a juridical person 
      constituted under the laws of a party to an agreement referred to in 
      paragraph 1 shall be entitled to treatment granted under such 
      agreement, provided that it engages in substantive business operations 
      in the territory of the parties to such agreement. 

      
7.    (a)  Members which are parties to any agreement referred to in 
           paragraph 1 shall promptly notify any such agreement and any 
           enlargement or any significant modification thereto the Council 
           for Trade in Services. They shall also make available to the 
           Council such relevant information as may be requested by it.  The 
           Council may establish a working  party to examine such an 
           agreement or enlargement or modification thereto and to report to 
           the Council  on its consistency with this Article.

      (b)  Members which are parties to any agreement referred to in 
           paragraph 1 which is implemented on the basis of a time-frame 
           shall report periodically to the Council for Trade in Services on 
           its implementation. The Council may establish a working party to 
           examine such reports if it deems it necessary. 

      (c)  Based on the reports of the working parties referred to in 
           paragraphs (a) and (b), the Council may make recommendations to 
           the parties as it deems appropriate.

8.    A Member which is a party to any agreement referred to in paragraph 1 
may not seek compensation for trade benefits that may accrue to any other 
Member from such agreement.  


                              Article V bis
 
                  Labour Markets Integration Agreements


      This Agreement shall not prevent any of its Members from being a party 
to an agreement establishing full integration[2] of the labour markets 
between or among the parties to such an agreement, provided that such an 
agreement:

      (a)  exempts citizens of parties to the agreement from requirements 
           concerning residency and work permits;

      (b)  is notified to the Council for Trade in Services.


                               Article VI

                           Domestic Regulation
 

1.    In sectors where specific commitments are undertaken, each Member 
shall ensure that all measures of general application affecting trade in 
services are administered in a reasonable, objective and impartial manner.

2.    (a)  Each Member shall maintain or institute as soon as practicable 
           judicial, arbitral or administrative tribunals or procedures 
           which provide, at the request of an affected service supplier, 
           for the prompt review of, and where justified, appropriate 
           remedies for, administrative decisions affecting trade in 
           services.  Where such procedures are not independent of the 
           agency entrusted with the administrative decision concerned, the  
           Member shall ensure that they do in fact provide for an objective 
           and impartial review.

      (b)  The provisions of sub-paragraph (a) shall not be construed to 
           require a Member to institute such tribunals or procedures where 
           this would be inconsistent with its constitutional structure or 
           the nature of its legal system.

3.    Where authorization is required for the supply of a service on which a 
specific commitment has been made, the competent authorities of a Member 
shall, within a reasonable period of time after the submission of an 
application considered complete under domestic laws and regulations, inform 
the applicant of the decision concerning the application.  At the request of 
the applicant, the competent authorities of the Member shall provide, 
without undue delay, information concerning the status of the application.

4.    With a view to ensuring that measures relating to qualification 
requirements and procedures, technical standards and licensing requirements 
do not constitute unnecessary barriers to trade in services, the Council for 
Trade in Services shall, through appropriate bodies it may establish, 
develop any necessary disciplines.  Such disciplines shall aim to ensure 
that such requirements are, inter alia:

      (a)  based on objective and transparent criteria, such as competence 
           and the ability to  supply the service;

      (b)  not more burdensome than necessary to ensure the quality of the 
           service;

      (c)  in the case of licensing procedures, not in themselves a 
           restriction on the supply of the service.

5.    (a)  In sectors in which a Member has undertaken specific commitments, 
           pending the entry into force of disciplines developed in these 
           sectors pursuant to paragraph 4, the  Member shall not apply 
           licensing and qualification requirements and technical standards 
           that nullify or impair such specific commitments in a manner 
           which:

           (i)    does not comply with the criteria outlined in 
                  sub-paragraphs 4(a), (b) or (c);  and

           (ii)   could not reasonably have been expected of that Member at 
                  the time the specific commitments in those sectors were 
                  made.

      (b)  In determining whether a Member is in conformity with the 
           obligation under paragraph 5(a) above, account shall be taken of 
           international standards of relevant international 
           organizations[3] applied by that Member.

6.    In sectors where specific commitments regarding professional services 
are undertaken, each Member shall provide for adequate procedures to verify 
the competence of professionals of any other Member.


                               Article VII

                               Recognition


1.     For the purposes of the fulfilment, in whole or in part, of its 
standards or criteria for the authorization, licensing or certification of 
services suppliers, and subject to the requirements of paragraph 3 below, a 
Member may recognize the education or experience obtained, requirements met, 
or licenses or certifications granted in a particular country.  Such 
recognition, which may be achieved through harmonization or otherwise, may 
be based upon an agreement or arrangement with the country concerned or may 
be accorded autonomously.

2.    A Member that is a party to an agreement or arrangement referred to in 
paragraph 1, whether existing or future, shall afford adequate opportunity 
for other interested Members to negotiate their accession to such an 
agreement or arrangement or to negotiate comparable ones with it.  Where a 
Member accords recognition autonomously, it shall afford adequate 
opportunity for any other Member to demonstrate that education, experience, 
licenses, or certifications obtained or requirements met in its territory 
should be recognized.

3.    A Member shall not accord recognition in a manner which would 
constitute a means of discrimination between countries in the application of 
its standards or criteria for the authorization, licensing or certification 
of services suppliers, or a disguised restriction on trade in services.

4.    Each Member shall:

      (a)  within 12 months from the date on which the Agreement 
           Establishing the MTO takes effect for it, inform the Council for 
           Trade in Services of its existing recognition measures and state 
           whether such measures are based on agreements or arrangements of 
           the type referred to in paragraph 1;  

      (b)  promptly inform the Council for Trade in Services as far in 
           advance as possible of the opening of negotiations on an 
           agreement or arrangement referred to in paragraph 1 in order to 
           provide adequate opportunity to any other Member to indicate 
           their interest in participating in the negotiations before they 
           enter a substantive phase;

      (c)  promptly inform the Council for Trade in Services when it adopts 
           new recognition measures or significantly modifies existing ones 
           and state whether the measures are based on an agreement or 
           arrangement referred to in paragraph 1.

5.    Wherever appropriate, recognition should be based on multilaterally 
agreed criteria.  In appropriate cases, Members shall work in co-operation 
with relevant intergovernmental and non-governmental organizations towards 
the establishment and adoption of common international standards and 
criteria for recognition and common international standards for the practice 
of relevant services trades and professions.

                                    
                              Article VIII

               Monopolies and Exclusive Service Suppliers

1.    Each Member shall ensure that any monopoly supplier of a service in 
its territory does not, in the supply of the monopoly service in the 
relevant market, act in a manner inconsistent with that Member's obligations 
under Article II and specific commitments.

2.    Where a Member's monopoly supplier competes, either directly or 
through an affiliated company, in the supply of a service outside the scope 
of its monopoly rights and which is subject to that Member's specific 
commitments, the Member shall ensure that such a supplier does not abuse its 
monopoly position to act in its territory in a manner inconsistent with such 
commitments.

3.    The Council for Trade in Services may, at the request of a Member 
which has a reason to believe that a monopoly supplier of a service of any 
other Member is acting in a manner inconsistent with paragraph 1 or 2 above, 
request the Member establishing, maintaining or authorizing such supplier to 
provide specific information concerning the relevant operations.

4.    If, after the entry into force of the Agreement Establishing the MTO, 
a Member grants monopoly rights regarding the supply of a service covered by 
its specific commitments, that Member shall make such notification to the 
Council for Trade in Services no later than three months before the intended 
implementation of the grant of monopoly rights and the provisions of 
paragraphs 2, 3 and 4 of Article XXI shall apply.

5.    The provisions of this Article shall also apply to cases of exclusive 
service suppliers, where a Member, formally or in effect, (a) authorizes or 
establishes a small number of service suppliers and (b) substantially 
prevents competition among those suppliers in its territory.


                               Article IX

                           Business Practices


1.    Members recognize that certain business practices of service 
suppliers, other than those falling under Article VIII, may restrain 
competition and thereby restrict trade in services.

2.    Each Member shall, at the request of any other Member, enter into 
consultations with a view to eliminating practices referred to in paragraph 
1.  The Member addressed shall accord full and sympathetic consideration to 
such a request and shall cooperate through the supply of publicly available 
non-confidential information of relevance to the matter in question.  The 
Member addressed shall also provide other information available to the 
requesting Member, subject to its domestic law and to the conclusion of 
satisfactory agreement concerning the safeguarding of its confidentiality by 
the requesting Member.


                                Article X

                      Emergency Safeguards Measures


1.    There shall be multilateral negotiations on the question of emergency 
safeguard measures based on the principle of non-discrimination.  The 
results of such negotiations shall enter into effect on a date not later 
than three years from the entry into force of the Agreement Establishing the 
MTO.

2.    In the period before the entry into effect of the results of the 
negotiations referred to in paragraph 1, any Member may, notwithstanding the 
provisions of paragraph 1 of Article XXI, notify the Council on Trade in 
Services of its intention to modify or withdraw a specific commitment after 
a period of one year from the date on which the commitment enters into 
force;  provided that the Member shows cause to the Council that the 
modification or withdrawal cannot await the lapse of the three-year period 
provided for in paragraph 1 of Article XXI.

3.    The provisions of paragraph 2 shall cease to apply three years after 
the entry into force of the Agreement Establishing the MTO.


                               Article XI

                         Payments and Transfers


1.    Except under the circumstances envisaged in Article XII, a Member 
shall not apply restrictions on international transfers and payments for 
current transactions relating to its specific commitments.

2.    Nothing in this Agreement shall affect the rights and obligations of 
the members of the International Monetary Fund under the Articles of 
Agreement of the Fund, including the use of exchange actions which are in 
conformity with the Articles of Agreement, provided that a Member shall not 
impose restrictions on any capital transactions inconsistently with its 
specific commitments regarding such transactions, except under Article XII 
or at the request of the Fund.



                               Article XII

            Restrictions to Safeguard the Balance of Payments


1.    In the event of serious balance-of-payments and external financial 
difficulties or threat thereof, a Member may adopt or maintain restrictions 
on trade in services on which it has undertaken specific commitments, 
including on payments or transfers for transactions related to such 
commitments.  It is recognized that particular pressures on the balance of 
payments of a Member in the process of economic development or economic 
transition may necessitate the use of restrictions to ensure, inter alia, 
the maintenance of a level of financial reserves adequate for the 
implementation of its programme of economic development or economic 
transition.

2.    The restrictions referred to in paragraph 1 above:

      (a)  shall not discriminate among Members;

      (b)  shall be consistent with the Articles of Agreement of the 
           International Monetary Fund;

      (c)  shall avoid unnecessary damage to the commercial, economic and 
           financial interests of any other Member;
 
      (d)  shall not exceed those necessary to deal with the circumstances 
           described in paragraph 1;

      (e)  shall be temporary and be phased out progressively as the 
           situation specified in paragraph 1 improves.

3.    In determining the incidence of such restrictions, Members may give 
priority to the supply of services which are more essential to their 
economic or development programmes.  However, such restrictions shall not be 
adopted or maintained for the purpose of protecting a particular service 
sector.

4.    Any restrictions adopted or maintained under paragraph 1 of this 
Article, or any changes therein, shall be promptly notified to the General 
Council.

5.    (a)  Members applying the provisions of this Article shall consult 
           promptly with the  Committee on Balance-of-Payments Restrictions 
           on restrictions adopted under this Article.

      (b)  The Ministerial Conference shall establish procedures[4] for 
           periodic consultations with the objective of enabling such 
           recommendations to be made to the Member concerned as it may deem 
           appropriate.

      (c)  Such consultations shall assess the balance-of-payment situation 
           of the Member concerned and the restrictions adopted or 
           maintained under this Article, taking into account, inter alia, 
           such factors as:

           (i)    the nature and extent of the balance-of-payments and the 
                  external financial difficulties;

           (ii)   the external economic and trading environment of the 
                  consulting Member;

           (iii)  alternative corrective measures which may be available.

      (d)  The consultations shall address the compliance of any 
           restrictions with paragraph 2, in particular the progressive 
           phase out of restrictions in accordance with paragraph 2(e).

      (e)  In such consultations, all findings of statistical and other 
           facts presented by the International Monetary Fund relating to 
           foreign exchange, monetary reserves and balance of payments, 
           shall be accepted and conclusions shall be based on the 
           assessment by the Fund of the balance-of-payments and the 
           external financial situation of the consulting Member.

6.    If a Member which is not a member of the International Monetary Fund 
wishes to apply the provisions of this Article, the Ministerial Conference 
shall establish review and any other procedures necessary.


                              Article XIII

                         Government Procurement


1.    Articles II, XVI and XVII shall not apply to laws, regulations or 
requirements governing the procurement by governmental agencies of services 
purchased for governmental purposes and not with a view to commercial resale 
or with a view to use in the supply of services for commercial sale.

2.    There shall be multilateral negotiations on government procurement in 
services under this Agreement within two years from the entry into force of 
the Agreement Establishing the MTO.



                               Article XIV

                           General Exceptions

      Subject to the requirement that such measures are not applied in a 
manner which would constitute a means of arbitrary or unjustifiable 
discrimination between countries where like conditions prevail, or a 
disguised restriction on trade in services, nothing in this Agreement shall 
be construed to prevent the adoption or enforcement by any Member of 
measures: 

      (a)  necessary to protect public morals or to maintain public 
      order;[5]

      (b)  necessary to protect human, animal or plant life or health;

      (c)  necessary to secure compliance with laws or regulations which are 
           not inconsistent with the provisions of this Agreement including 
           those relating to:

           (i)    the prevention of deceptive and fraudulent practices or to 
                  deal with the effects of a default on services contracts;

           (ii)   the protection of the privacy of individuals in relation 
                  to the processing and dissemination of personal data and 
                  the protection of confidentiality of individual records 
                  and accounts;

           (iii)  safety;

      (d)  inconsistent with Article XVII, provided that the difference in 
           treatment is aimed at ensuring the equitable or effective[6] 
           imposition or collection of direct taxes[7] in respect of 
           services or service suppliers of other Members;

      (e)  inconsistent with Article II, provided that the difference in 
           treatment is the result of an agreement on the avoidance of 
           double taxation or provisions on the avoidance of double taxation 
           in any other international agreement or arrangement by which the 
           Member is bound.

                             Article XIV bis

                           Security Exceptions


1.    Nothing in this Agreement shall be construed:

      (a)  to require any Member to furnish any information, the disclosure 
           of which it considers contrary to its essential security 
           interests; or

      (b)  to prevent any Member from taking any action which it considers 
           necessary for the protection of its essential security interests:

           (i)    relating to the supply of services as carried out directly 
                  or indirectly for the purpose of provisioning a military 
                  establishment;

           (ii)   relating to fissionable and fusionable materials or the 
                  materials from which they are derived;

            (iii) taken in time of war or other emergency in international 
                  relations;  or

      (c)  to prevent any Member from taking any action in pursuance of its 
           obligations under the United Nations Charter for the maintenance 
           of international peace and security.

2.    The Council for Trade in Services shall be informed to the fullest 
extent possible of measures taken under paragraphs 1(b) and (c) and of their 
termination.


                               Article XV

                                Subsidies


1.    Members recognize that, in certain circumstances, subsidies may have 
distortive effects on trade in services.  Members shall enter into 
negotiations with a view to developing the necessary multilateral 
disciplines to avoid such trade distortive effects.[8]  The negotiations 
shall also address the appropriateness of countervailing procedures.  Such 
negotiations shall recognize the role of subsidies in relation to the 
development programmes of developing countries and take into account the 
needs of Members, particularly developing country Members, for flexibility 
in this area.  For the purpose of such negotiations, Members shall exchange 
information concerning all subsidies related to trade in services that they 
provide to their domestic service suppliers.

2.    Any Member which considers that it is adversely affected by a subsidy 
of another Member may request consultations with that Member on such 
matters.  Such requests shall be accorded sympathetic consideration.
                                PART III

                          SPECIFIC COMMITMENTS

                               Article XVI

                              Market Access


1.    With respect to market access through the modes of supply identified 
in Article I, each Member shall accord services and service suppliers of any 
other Member treatment no less favourable than that provided for under the 
terms, limitations and conditions agreed and specified in its schedule.[9]

2.    In sectors where market access commitments are undertaken, the 
measures which a Member shall not maintain or adopt either on the basis of a 
regional subdivision or on the basis of its entire territory, unless 
otherwise specified in its schedule, are defined as:

      (a)  limitations on the number of service suppliers whether in the 
           form of numerical quotas, monopolies, exclusive service suppliers 
           or the requirements of an economic needs test;

      (b)  limitations on the total value of service transactions or assets 
           in the form of numerical quotas or the requirement of an economic 
           needs test;

      (c)  limitations on the total number of service operations or on the 
           total quantity of service output expressed in terms of designated 
           numerical units in the form of quotas or the requirement of an 
           economic needs test;[10]

      (d)  limitations on the total number of natural persons that may be 
           employed in a particular service sector or that a service 
           supplier may employ and who are necessary for, and directly 
           related to, the supply of a specific service in the form of 
           numerical quotas or the requirement of an economic needs test;

      (e)  measures which restrict or require specific types of legal entity 
           or joint venture through which a service supplier may supply a 
           service;  and

      (f)  limitations on the participation of foreign capital in terms of 
           maximum percentage limit on foreign shareholding or the total 
           value of individual or aggregate foreign investment.



                              Article XVII

                           National Treatment

1.    In the sectors inscribed in its schedule, and subject to any 
conditions and qualifications set out therein, each Member shall accord to 
services and service suppliers of any other Member, in respect of all 
measures affecting the supply of services, treatment no less favourable than 
that it accords to its own like services and service suppliers.[11]

2.    A Member may meet the requirement of paragraph 1 by according to 
services and service suppliers of any other Member, either formally 
identical treatment or formally different treatment to that it accords to 
its own like services and service suppliers.

3.    Formally identical or formally different treatment shall be considered 
to be less favourable if it modifies the conditions of competition in favour 
of services or service suppliers of the Member compared to like services or 
service suppliers of any other  Member.


                              Article XVIII

                         Additional Commitments


      Members may negotiate commitments with respect to measures affecting 
trade in services not subject to scheduling under Articles XVI or XVII, 
including those regarding qualifications, standards or licensing matters.  
Such commitments shall be inscribed in a Member's schedule.



                                 PART IV

                       PROGRESSIVE LIBERALIZATION

                               Article XIX

                  Negotiation of  Specific Commitments


1.    In pursuance of the objectives of this Agreement, Members shall enter 
into successive rounds of negotiations, beginning not later than five years 
from the date of entry into force of the Agreement Establishing the MTO and 
periodically thereafter, with a view to achieving a progressively higher 
level of liberalization.  Such negotiations shall be directed to the 
reduction or elimination of the adverse effects on trade in services of 
measures as a means of providing effective market access.  This process 
shall take place with a view to promoting the interests of all participants 
on a mutually advantageous basis and to securing an overall balance of 
rights and obligations.  

2.    The process of liberalization shall take place with due respect for 
national policy objectives and the level of development of individual 
Members, both overall and in individual sectors.  There shall be appropriate 
flexibility for individual developing countries for opening fewer sectors, 
liberalizing fewer types of transactions, progressively extending market 
access in line with their development situation and, when making access to 
their markets available to foreign service suppliers, attaching to it 
conditions aimed at achieving the objectives referred to in Article IV.

3.    For each round, negotiating guidelines and procedures shall be 
established.  For the purposes of establishing such guidelines, the Council 
for Trade in Services shall carry out an assessment of trade in services in 
overall terms and on a sectoral basis with reference to the objectives of 
the Agreement, including those set out in paragraph 1 of Article IV.  
Negotiating guidelines shall establish modalities for the treatment of 
liberalization undertaken autonomously by Members since previous 
negotiations, as well as for the special treatment of the least-developed 
countries under the provisions of paragraph 3 of Article IV.

4.    The process of progressive liberalization shall be advanced in each 
such round through bilateral, plurilateral or multilateral negotiations 
directed towards increasing the general level of specific commitments 
undertaken by Members under this Agreement.


                               Article XX

                    Schedules of Specific Commitments


1.    Each Member shall set out in a schedule the specific commitments it 
undertakes under Part III of this Agreement.  With respect to sectors where 
such commitments are undertaken, each schedule shall specify:

      (a)  terms, limitations and conditions on market access;

      (b)  conditions and qualifications on national treatment;

      (c)  undertakings relating to additional commitments;

      (d)  where appropriate the time-frame for implementation of such 
           commitments;  and

      (e)  date of entry into force of such commitments.

2.    Measures inconsistent with both Articles XVI and XVII shall be 
inscribed in the column relating to Article XVI.  In this case the 
inscription will be considered to provide a condition or qualification to 
Article XVII as well.

3.    Schedules of specific commitments shall be annexed to this Agreement 
and form an integral part thereof.



                               Article XXI

                        Modification of Schedules


1.    (a)  A Member (hereafter in this Article referred to as the "modifying 
           Member") may modify or withdraw any commitment in its schedule, 
           at any time after three years have elapsed from the date on which 
           that commitment entered into force, in accordance with the 
           provisions of this Article.

      (b)  A modifying Member shall notify its intent to modify or withdraw 
           a commitment pursuant to this Article to the Council for Trade in 
           Services no later than three months before the intended date of 
           implementation of the modification or withdrawal.

2.    (a)  At the request of any Member whose benefits under this Agreement 
           may be affected (hereafter "an affected Member") by a proposed 
           modification or withdrawal notified under paragraph 1(b), the 
           modifying Member shall enter into negotiations with a view to 
           reaching agreement on any necessary compensatory adjustment.  In 
           such negotiations and agreement, the Members concerned shall 
           endeavour to maintain a general level of mutually advantageous 
           commitments not less favourable to trade than that provided for 
           in schedules of specific commitments prior to such negotiations. 

      (b)  Compensatory adjustments shall be made on a most-favoured-nation 
           basis. 

3.    (a)  If agreement is not reached between the modifying Member and any 
           affected Member before the end of the period provided for 
           negotiations, such affected Member may refer the matter to 
           arbitration.  Any affected Member that wishes to enforce a right 
           that it may have to compensation must participate in the 
           arbitration. 

      (b)  If no affected Member has requested arbitration, the modifying 
           Member shall be free to implement the proposed modification or 
           withdrawal.

4.    (a)  The modifying Member may not modify or withdraw its commitment 
           until it has made compensatory adjustments in conformity with the 
           findings of the arbitration.

      (b)  If the modifying Member implements its proposed modification or 
           withdrawal and does not comply with the findings of the 
           arbitration, any affected Member that participated in the 
           arbitration may modify or withdraw substantially equivalent 
           benefits in conformity with those findings.  Notwithstanding 
           Article II, such a modification or withdrawal may be implemented 
           solely with respect to the modifying Member.

5.    The Council for Trade in Services shall establish procedures for 
rectification or modification of schedules of commitments.  Any Member which 
has modified or withdrawn scheduled commitments under this Article shall 
modify its schedule according to such procedures.




                                 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 Understanding on Rules and Procedures 
Governing the Settlement of Disputes 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.[12]  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 Understanding on Rules and Procedures Governing the 
Settlement of Disputes.

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 such obligations and specific 
commitments in accordance with Section  22 (Compensation and the Suspension 
of Concessions) of the Understanding on Rules and Procedures Governing the 
Settlement of Disputes.

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 Understanding on Rules and 
Procedures Governing the Settlement of Disputes. 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, Section  22 (Compensation and the Suspension 
of Concessions) of the Understanding on Rules and Procedures Governing the 
Settlement of Disputes shall apply.




                              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.  The 
Council shall establish its own rules of procedure.


                               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 MTO Secretariat and shall be decided upon by the 
Council for Trade in Services.


                              Article XXVI

           Relationship with Other International Organizations


      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 
with services.



                                 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 the territory of a non-Member, or in the territory 
           of a Member to which the denying Member does not apply this 
           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 
                  this Agreement, and

           (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 this 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 this 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 Member;

      (d)  "commercial presence" means any type of business or professional 
           establishment, including through

           (i)    the constitution, acquisition or maintenance of a 
                  juridical person, or

           (ii)   the creation or maintenance of a branch or a 
                  representative office, 

           within the territory of a Member for the purpose of supplying a 
           service.

      (e)  "sector" of a service means,

           (i)    with reference to a specific commitment, one or more, or 
                  all, sub-sectors of that service, as specified in a 
                  Member's schedule, 

           (ii)   otherwise, the whole of that service sector, including all 
                  of its sub-sectors;

      (f)  "service of another Member" means a service which is supplied,

           (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;[13]

      (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 person;

      (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 or accession to this 
                       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

                  1.   natural persons of that Member, or

                  2.   juridical persons of that other Member identified 
                       under sub-paragraph (i);

      (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.



                              Article XXIX

                                 Annexes

      The Annexes to this Agreement are an integral part of this Agreement. 

                   ANNEX ON ARTICLE II EXEMPTIONS


Scope

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 entry into force of the 
Agreement Establishing the MTO shall be dealt with under paragraph 3 of 
Article IX of that Agreement.


Review

3.    The Council for Trade in Services shall review all exemptions granted 
for a period of more than 5 years.  The first such review shall take place 
no more than 5 years after the entry into force of the Agreement 
Establishing the MTO.

4.    The Council for Trade in Services in a review shall:

      (a)  examine whether the conditions which created the need for the 
           exemption still prevail;  and 

      (b)  determine the date of any further review.


Termination

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 the 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.



                ANNEX ON MOVEMENT OF NATURAL PERSONS
               SUPPLYING SERVICES UNDER THE AGREEMENT
                                  

1.    The Annex applies to measures affecting natural persons who are 
service suppliers of a Member, and to natural persons of a Member who are 
employed by a service supplier of a Member, in respect of the supply  of a 
service for which specific commitments relating to entry and temporary stay 
of such natural persons have been undertaken.

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 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.[14]


                     ANNEX ON FINANCIAL SERVICES


1.    Scope and Definition

1.1   This annex applies to measures affecting the supply of financial 
services.  Reference to the supply of a financial service in the Annex shall 
mean the supply of a service as defined in paragraph 2 of Article I of the 
Agreement.  

1.2   For the purposes of paragraph 3(b) of Article I of the Agreement, 
"services supplied in the exercise of governmental authority" means the 
following:

      1.2.1activities conducted by a central bank or monetary authority or 
           by any other public entity in pursuit of monetary or exchange 
           rate policies;

      1.2.2activities forming part of a statutory system of social security 
           or public retirement plans;  and

      1.2.3other activities conducted by a public entity for the account or 
           with the guarantee or using the financial resources of the 
           Government.

1.3   For the purposes of paragraph 3(b) Article I of the Agreement, if a 
Member allows any of the activities referred to in paragraph 1.2.2 or 1.2.3 
to be conducted by its financial service suppliers in competition with a 
public entity or a financial service supplier, "services" shall include such 
activities.

1.4   Article I:3(c) of the Agreement shall not apply to services covered by 
this Annex.

2.    Domestic Regulation

2.1   Notwithstanding any other provisions of the Agreement, a Member shall 
not be prevented from taking measures for prudential reasons, including for 
the protection of investors, depositors, policy holders or persons to whom a 
fiduciary duty is owed by a financial service supplier, or to ensure the 
integrity and stability of the financial system.  Where such measures do not 
conform with the provisions of the Agreement, they shall not be used as a 
means of avoiding the Member's commitments or obligations under the 
Agreement.  

2.2   Nothing in the Agreement shall be construed to require a Member to 
disclose information relating to the affairs and accounts of individual 
customers or any confidential or proprietary information in the possession 
of public entities.

3.    Recognition

3.1   A Member may recognize prudential measures of any other country in 
determining how the Member's measures relating to financial services shall 
be applied.  Such recognition, which may be achieved through harmonization 
or otherwise, may be based upon an agreement or arrangement with the country 
concerned or may be accorded autonomously.

3.2   A Member that is a party to such an agreement or arrangement referred 
to in paragraph 3.1, whether future or existing, shall afford adequate 
opportunity for other interested Members to negotiate their accession to 
such agreements or arrangements, or to negotiate comparable ones with it, 
under circumstances in which there would be equivalent regulation, 
oversight, implementation of such regulation, and, if appropriate, 
procedures concerning the sharing of information between the parties to the 
agreement or arrangement.  Where a Member accords recognition autonomously, 
it shall afford adequate opportunity for any other Member to demonstrate 
that such circumstances exist.

3.3   Where a Member is contemplating according recognition to prudential 
measures of any other country, paragraph 4(b) of Article VII of the 
Agreement shall not apply.

4.    Dispute Settlement

4.1   Panels for disputes on prudential issues and other financial matters 
shall have the necessary expertise relevant to the specific financial 
service under dispute.

5.    Definitions

For the purposes of this Annex:

5.1   A financial service is any service of a financial nature offered by a 
financial service supplier of a Member.  Financial services include all 
insurance and insurance-related services, and all banking and other 
financial services (excluding insurance).  Financial services include the 
following activities:

      Insurance and insurance-related services

      (a)  Direct insurance (including co-insurance):

           (i)    life

           (ii)   non-life

      (b)  Reinsurance and retrocession;

      (c)  Insurance intermediation, such as brokerage and agency;

      (d)  Services auxiliary to insurance, such as consultancy, actuarial, 
           risk assessment and claim settlement services.

      Banking and other financial services (excluding insurance)

      (e)  Acceptance of deposits and other repayable funds from the public;

      (f)  Lending of all types, including consumer credit, mortgage, 
           credit, factoring and financing of commercial transaction;

      (g)  Financial leasing;

      (h)  All payment and money transmission services, including credit, 
           charge and debit cards, travellers cheques and bankers drafts;

      (i)  Guarantees and commitments;

      (j)  Trading for own account or for account of customers, whether on 
           an exchange, in an over-the-counter market or otherwise, the 
           following:

           (i)    money market instruments (including cheques, bills, 
                  certificates of deposits);

           (ii)   foreign exchange;

           (iii)  derivative products including, but not limited to, futures 
                  and options;

           (iv)   exchange rate and interest rate instruments, including 
                  products such as swaps, forward rate agreements;

           (v)    transferable securities;

           (vi)   other negotiable instruments and financial assets, 
                  including bullion.

      (k)  Participation in issues of all kinds of securities, including 
           underwriting and placement as agent (whether publicly or 
           privately) and provision of services related to such issues;

      (l)  Money broking;

      (m)  Asset management, such as cash or portfolio management, all forms 
           of collective investment management, pension fund management, 
           custodial, depository and trust services;

      (n)  Settlement and clearing services for financial assets, including 
           securities, derivative products, and other negotiable 
           instruments;

      (o)  Provision and transfer of financial information, and financial 
           data processing and related software by suppliers of other 
           financial services;

      (p)  Advisory, intermediation and other auxiliary financial services 
           on all the activities listed in sub-paragraphs (e) to (o), 
           including credit reference and analysis, investment and portfolio 
           research and advice, advice on acquisitions and on corporate 
           restructuring and strategy.

5.2   A financial service supplier means any natural or juridical person of 
a Member wishing to supply or supplying financial services but the term 
"financial service supplier" does not include a public entity.

5.3   "Public entity" means:

      5.3.1a government, a central bank or a monetary authority, of a 
           Member, or an entity owned or controlled by a Member, that is 
           principally engaged in carrying out governmental functions or 
           activities for governmental purposes, not including an entity 
           principally engaged in supplying financial services on commercial 
           terms;  or

      5.3.2a private entity, performing functions normally performed by a 
           central bank or monetary authority, when exercising those 
           functions.

5.4   "Agreement" means the Articles of the General Agreement on Trade in 
Services, this Sectoral Annex on Financial Services and the schedule of each 
Party with respect to financial services.


                 SECOND ANNEX ON FINANCIAL SERVICES


1.    Notwithstanding Article II of the General Agreement on Trade in 
Services and paragraphs 1 and 2 of the Annex on Article II Exemptions, a 
Member may, during a period of 60 days beginning four months after the date 
of entry into force of the Agreement Establishing the MTO, list in that 
Annex measures relating to Financial Services which are inconsistent with 
paragraph 1 of Article II of the Agreement.

2.    Notwithstanding Article XXI of the General Agreement on Trade in 
Services, a Member may, during a period of 60 days beginning four months 
after the date of entry into force of the Agreement Establishing the MTO, 
improve, modify or withdraw all or part of the commitments on Financial 
Services inscribed in its schedule.

3.    The Council for Trade in Services shall establish any procedures 
necessary for the application of paragraphs 1 and 2.
                     ANNEX ON TELECOMMUNICATIONS


1.    Objectives

1.1   Recognizing the specificities of the telecommunications services 
sector and, in particular, its dual role as a distinct sector of economic 
activity and as the underlying transport means for other economic 
activities, the Members have agreed to the following Annex with the 
objective of elaborating upon the provisions of the Agreement with respect 
to measures affecting access to and use of public telecommunications 
transport networks and services.  Accordingly, this Annex provides notes and 
supplementary provisions to the Agreement.

2.    Scope

2.1   This Annex shall apply to all measures of a Member that affect access 
to and use of public telecommunications transport networks and services.[15]

2.2   This Annex shall not apply to measures affecting the cable or 
broadcast distribution of radio or television programming. 

2.3   Nothing in this Annex shall be construed:

      2.3.1to require a Member to authorize a service supplier of any other 
           Member to establish, construct, acquire, lease, operate, or 
           supply telecommunications transport networks or services, other 
           than as provided for in its schedule;  or

      2.3.2to require a Member (or to require a Member to oblige service 
           suppliers under its jurisdiction) to establish, construct, 
           acquire, lease, operate or supply telecommunications transport 
           networks or services not offered to the public generally.

3.    Definitions

      For the purposes of this Annex:

3.1   Telecommunications means the transmission and reception of signals by 
any electromagnetic means.

3.2   Public telecommunications transport service means any 
telecommunications transport service required, explicitly or in effect, by a 
Member to be offered to the public generally.  Such services may include, 
inter alia, telegraph, telephone, telex, and data transmission typically 
involving the real-time transmission of customer-supplied information 
between two or more points without any end-to-end change in the form or 
content of the customer's information.

3.3   Public telecommunications transport network means the public 
telecommunications infrastructure which permits telecommunications between 
and among defined network termination points.

3.4   Intra-corporate communications means telecommunications through which 
a company communicates within the company or with or among its subsidiaries, 
branches and, subject to a  Member's domestic laws and regulations, 
affiliates.  For these purposes, "subsidiaries", "branches" and, where 
applicable, "affiliates" shall be as defined by each Party Member.  
"Intra-corporate communications" in this Annex excludes commercial or 
non-commercial services that are supplied to companies that are not related 
subsidiaries, branches or affiliates, or that are offered to customers or 
potential customers.

3.5   Any reference to a paragraph or subparagraph of this Annex includes 
all subdivisions thereof.

4.    Transparency

4.1   In the application of Article III of the Agreement, each Member shall 
ensure that relevant information on conditions affecting access to and use 
of public telecommunications transport networks and services is publicly 
available, including: tariffs and other terms and conditions of service; 
specifications of technical interfaces with such networks and services; 
information on bodies responsible for the preparation and adoption of 
standards affecting such access and use; conditions applying to attachment 
of terminal or other equipment; and notifications, registration or licensing 
requirements, if any.

5.    Access to and use of Public Telecommunications Transport Networks and 
      Services

5.1   Each Member shall ensure that any service supplier of any other Member 
is accorded access to and use of public telecommunications transport 
networks and services on reasonable and non-discriminatory terms and 
conditions, for the supply of a service included in its schedule.  This 
obligation shall be applied, inter alia, through paragraphs 5.2 through 5.6 
below.[16]

5.2   Each Member shall ensure that service suppliers of any other Member 
have access to and use of any public telecommunications transport network or 
service offered within or across the border of that  Member, including 
private leased circuits, and to this end shall ensure, subject to paragraphs 
5.5 and 5.6, that such suppliers are permitted:

      5.2.1to purchase or lease and attach terminal or other equipment which 
           interfaces with the network and which is necessary to supply a 
           supplier's services;

      5.2.2to interconnect private leased or owned circuits with public 
           telecommunications transport networks and services or with 
           circuits leased or owned by another service supplier; and

      5.2.3to use operating protocols of the service supplier's choice in 
           the supply of any service, other than as necessary to ensure the 
           availability of telecommunications transport networks and 
           services to the public generally.

5.3   Each Member shall ensure that service suppliers of any other Member 
may use public telecommunications transport networks and services for the 
movement of information within and across borders, including for 
intra-corporate communications of such service suppliers, and for access to 
information contained in data bases or otherwise stored in machine-readable 
form in the territory of any Member.  Any new or amended measures of a 
Member significantly affecting such use shall be notified and shall be 
subject to consultation, in accordance with relevant provisions of the 
Agreement.

5.4   Notwithstanding the preceding paragraph, a Member may take such 
measures as are necessary to ensure the security and confidentiality of 
messages, subject to the requirement that such measures are not applied in a 
manner which would constitute a means of arbitrary or unjustifiable 
discrimination or a disguised restriction on trade in services.

5.5   Each Member shall ensure that no condition is imposed on access to and 
use of public telecommunications transport networks and services other than 
as necessary:

      5.5.1to safeguard the public service responsibilities of suppliers of 
           public telecommunications transport networks and services, in 
           particular their ability to make their networks or services 
           available to the public generally;

      5.5.2to protect the technical integrity of public telecommunications 
           transport networks or services; or

      5.5.3to ensure that service suppliers of any other Member do not 
           supply services unless permitted pursuant to commitments in a 
           Member's schedule.

5.6   Provided that they satisfy the criteria set out in paragraph 5.5, 
conditions for access to and use of public telecommunications transport 
networks and services may include:

      5.6.1restrictions on resale or shared use of such services;

      5.6.2a requirement to use specified technical interfaces, including 
           interface protocols, for inter-connection with such networks and 
           services;

      5.6.3requirements, where necessary, for the inter-operability of such 
           services and to encourage the achievement of the goals set out in 
           paragraph 7.1;

      5.6.4type approval of terminal or other equipment which interfaces 
           with the network and technical requirements relating to the 
           attachment of such equipment to such networks;

      5.6.5restrictions on inter-connection of private leased or owned 
           circuits with such networks or services or with circuits leased 
           or owned by another service supplier; or

      5.6.6notification, registration and licensing.

5.7   Notwithstanding the preceding paragraphs of this section, a developing 
Member may, consistent with its level of development, place reasonable 
conditions on access to and use of public telecommunications transport 
networks and services necessary to strengthen its domestic 
telecommunications infrastructure and service capacity and to increase its 
participation in international trade in telecommunications services.  Such 
conditions shall be specified in the Member's schedule.

6.    Technical Co-operation

6.1   Members recognize that an efficient, advanced telecommunications 
infrastructure in countries, particularly developing countries, is essential 
to the expansion of their trade in services.  To this end, Members endorse 
and encourage the participation, to the fullest extent practicable, of 
developed and developing countries and their suppliers of public 
telecommunications transport networks and services and other entities in the 
development programmes of international and regional organizations, 
including the International Telecommunication Union, the United Nations 
Development Programme, and the International Bank for Reconstruction and 
Development.


6.2   Members shall encourage and support telecommunications co-operation 
among developing countries at the international, regional and sub-regional 
levels.

6.3   In co-operation with relevant international organizations, Members 
shall make available, where practicable, to developing countries information 
with respect to telecommunications services and developments in 
telecommunications and information technology to assist in strengthening 
their domestic telecommunications services sector.

6.4   Members shall give special consideration to opportunities for the 
least developed countries to encourage foreign suppliers of 
telecommunications services to assist in the transfer of technology, 
training and other activities that support the development of their 
telecommunications infrastructure and expansion of their telecommunications 
services trade.

7.    Relation to International Organizations and Agreements

7.1   Members recognize the importance of international standards for global 
compatibility and inter-operability of telecommunication networks and 
services and undertake to promote such standards through the work of 
relevant international bodies, including the International Telecommunication 
Union and the International Organization for Standardization.

7.2   Members recognize the role played by intergovernmental and 
non-governmental organizations and agreements in ensuring the efficient 
operation of domestic and global telecommunications services, in particular 
the International Telecommunication Union.  Members shall make appropriate 
arrangements, where relevant, for consultation with such organizations on 
matters arising from the implementation of this Annex.

                                  





                   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 made or obligation assumed under this 
Agreement shall not reduce or affect a Member's obligations under bilateral 
or multilateral agreements that are in effect at the entry into force of the 
Agreement Establishing the MTO.

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 commitments have been assumed by the concerned Members 
and where dispute settlement procedures in bilateral and other multilateral 
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.

6.    Definitions:

      (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 line 
           maintenance.

      (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 conditions.

      (c)  "computer reservation system (CRS) services" mean services 
           provided by computerised 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.
          ANNEX ON NEGOTIATIONS ON BASIC TELECOMMUNICATIONS


1.    Notwithstanding paragraph 1 of Article II of the GATS and paragraph 2 
of the Annex on Article II Exemptions, Article II and the Annex on Article 
II Exemptions, including the requirement to list in the Annex any measure 
inconsistent with most-favoured-nation treatment that a Member will 
maintain, shall enter into force for basic telecommunications only on:

      (a)  the date of implementation of the results of the negotiations 
           mandated by the Ministerial Decision on Negotiations on Basic 
           Telecommunications;  or,

      (b)  should the negotiations not succeed, on the date of the final 
           report of the Negotiating Group on Basic Telecommunications.

2.    Paragraph 1 above shall not apply to any specific commitment on basic 
telecommunications which is inscribed in a Member's schedule.

3.    References  to the dates cited under paragraphs 1(a) and (b) above are 
contained in paragraph 5 of the Ministerial Decision on Negotiations on 
Basic Telecommunications.


1. This condition is understood in terms of number of sectors, volume of 
trade affected and modes of supply. In order to meet this condition, 
agreements should not provide for the a priori exclusion of any mode of 
supply.

2. Typically, such integration provides citizens of the parties concerned 
with a right of  free entry to the employment markets of the parties and 
includes measures concerning conditions of pay, other conditions of 
employment and social benefits.

3. The term "relevant international organizations" refers to international 
bodies whose membership is open to the relevant bodies of at least all 
Members of the MTO.

4. It is understood that the procedures under paragraph 5 shall be the same 
as the GATT 1994 procedures.

5. The public order exception may be invoked only where a genuine and 
sufficiently serious threat is posed to one of the fundamental interests of 
society.

6. Measures that are aimed at ensuring the equitable or effective imposition 
or collection of direct taxes include measures taken by a Member under  its 
taxation system which:

      -    apply to non-resident service suppliers in recognition of the 
           fact that the tax obligation of non-residents is determined with 
           respect to taxable items sourced or located in the Member's 
           territory;  or

      -    apply to non-residents in order to ensure the imposition or 
           collection of taxes in the Member's territory;  or

      -    apply to non-residents or residents in order to prevent the 
           avoidance or evasion of taxes, including compliance measures;  or

      -    apply to consumers of services supplied in or from the territory 
           of another Member in order to ensure the imposition or collection 
           of taxes on such consumers derived from sources in the Member's 
           territory;  or

      -    distinguish service suppliers subject to tax on worldwide taxable 
           items from other service suppliers, in recognition of the 
           difference in the nature of the tax base between them;  or

      -    determine, allocate or apportion income, profit, gain, loss, 
           deduction or credit of resident persons or branches, or between 
           related persons or branches of the same person, in order to 
           safeguard the Member's tax base.

      Tax terms or concepts in Article XIV(d) and in this footnote are 
determined according to tax definitions and concepts, or equivalent or 
similar definitions and concepts, under the domestic law of the Member 
taking the measure.


7. For the purpose of this Agreement "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.


8. A future work programme shall determine how and in what time-frame 
negotiations on the multilateral disciplines will be conducted.

9. If a Member undertakes a market access commitment in relation to the 
supply of a service through the mode of supply referred to in paragraph 2(a) 
of Article I and if the cross-border movement of capital is an essential 
part of the service itself, that Member is thereby committed to allow such 
movement of capital.  If a Member undertakes a market access commitment in 
relation to the supply of a service through the mode of supply referred to 
in paragraph 2(c) of Article I, it is thereby committed to allow related 
transfers of capital into its territory.

10. Sub-paragraph 2(c) does not cover measures of a Member which limit 
inputs for the supply of services.

11. Specific commitments assumed under this Article shall not be construed 
to require any Member to compensate for any inherent competitive 
disadvantages which result from the foreign character of the relevant 
services or service suppliers.

12. With respect to agreements on the avoidance of double taxation which 
exist at the time of entry into force of the Agreement Establishing the MTO, 
such a matter may be brought before the Council for Trade in Services only 
with the consent of both parties to the agreement.

13. 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.


14. Interpretative Note:  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.

15. This paragraph is understood to mean that each Member shall ensure that 
the obligations of this Annex are applied with respect to suppliers of 
public telecommunications transport networks and services by whatever 
measures are necessary.

16. The term "non-discriminatory" is understood to refer to 
most-favoured-nation and national treatment as defined in the Agreement, as 
well as to reflect sector-specific usage of the term to mean "terms and 
conditions no less favourable than those accorded to any other user of like 
public telecommunications transport networks or services under like 
circumstances".  



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