WORLD TRADE
ORGANIZATIONS/CSS/W/45
14 March 2001
(01-1289)
Council for Trade in Services
Special SessionOriginal:  English
COMMUNICATION FROM THE EUROPEAN COMMUNITIES
AND THEIR MEMBER STATES
GATS 2000:  Temporary Movement of Service Suppliers
The attached communication has been received from the delegation of the European
Communities and their Member States with the request that it be circulated to Members of theCouncil for Trade in Services.
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I. INTRODUCTION
1. The objective of this present Communication is to propose for reflection and discussion a
series of elements which could constitute potential areas for additional commitments and regulatorydisciplines for existing and new market access Mode 4 commitments.
2. Direct contact between the consumer and the supplier is often essential for the efficient
supply of services. The profound structural changes that have taken place in post-industrial
economies, have fuelled an increased demand for highly skilled service suppliers. The growing
dynamism of global markets means a shorter reaction time-span to problem-solving, which frequentlycalls for the immediate availability of services supp liers. This is exacerbated by the need to adapt to
the requirements of new technologies, management structures and the advent of a global economy.
The development of high-speed lower-cost trans port services and communication networks reinforces
the trend towards increased temporary presence abroad, rendering the temporary movement of natural
persons even more important a mode of delivery. In particular, firms operating internationally,
including in the implementation of services contracts, need to transfer expertise internationally
through the temporary relocation of specialists, professionals and contractual service suppliers.
3. It is important to point out at the outset of the GATS 2000 Negotiations that the temporary
movement of service suppliers in the framework of GATS is a very delicate subject for all participants
reflecting the importance all attach to the objective of regulating the presence of foreigners on their
territory.
4. This Communication is to be read in the context of the Marrakech Annex on “Movement of
Natural Persons”, which establishes that “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”. The Annex also establishes
that “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 toprotect 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”.S/CSS/W/45
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5. While taking account of the wider sensitivities, the European Communities and their Member
State1 consider that broader and deeper commitments under mode 4 would improve the capacity of all
countries to compete in trade in services, and would, combined with improvements in other modes,
expand the choice of operating strategies for economic actors.
6. Mode 4 liberalisation has so far been based mostly on a horizontal approach. The EU
recognises some benefit to a sectoral approach based on more specific categories of skilled personnel
activities. Nonetheless, prior to explore further this avenue, the EU would consider it logical first to
build and improve on the existing horizontal approach. Nevertheless, this will require careful study.
7. In particular, the EU believes that Members should reflect on the opportunity to elaborate
appropriate additional horizontal disciplines related to the temporary movement of service suppliers.
Improved regulatory disciplines, as well as clarified and harmonised definitions should aim at better
practical applicability of mode 4 commitments. To gether with potential additional commitments, it
should be possible to establish a predictable, harmonised and transparent system with the overall
objective of allowing the necessary mobility of service suppliers on a temporary basis without
compromising immigration policy.
II. ANALYSIS
8. Specifically, under mode 4 commitments, definitions of terms such as personnel,
administrators, managers, specialists, executives, senior personnel and professionals are often neither
clear nor consistent between different country schedules. Therefore, they can be subject to arbitrary
and discriminatory application by regulatory authorities. Vague terms and definitions lay the ground
for administrative discretion. This is particularly relevant as Mode 4 commitments are applied in a
very decentralised manner by, for example, employment, consular or immigration authorities. Theseproblems bring about considerable implementation issues and create serious difficulties for economic
operators. There is also a risk for potential dispute settlement cases.
9. Labour market tests are a market access related category of limitations that requires particular
attention. In most instances, unspecified labour mark et tests practically fulfil the role of a permanent
safeguard measure. The EU is of the view that an unspecified labour market test is, for the most part,equivalent to an unbound.
Areas for Reflection
Members should reflect on the following aspects related to mode 4
10. Harmonisation of the definitions and/or description of the Mode 4 categories including in the
context of intra-corporate transferees. A discussi on could be launched on the opportunity to ensure
that GATS Members agree on common terms and definitions for intra-corporate transferees,
executives, managers specialists and contractual service providers. This harmonisation effort couldtake into account, as far as relevant, the work already carried out by other international organisations.
Common definitions could potentially form the basis of a model schedule.
11. The specification of unspecified labour market tests from future commitments so as to ensure
effective application of mode 4 liberalisation. The elaboration of a common code of practice for
economic needs tests with the objective to render them more specific and transparent, define theirapplication criteria, make them non-discriminatory and impose a due process procedure could be
highly desirable.
                                                     
1 Later referred to as the European Union (EU).S/CSS/W/45
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12. Building on GATS Article III:4, with a view to achieving greater transparency the conditions
under which service providers may temporarily enter and stay in the territory of Members should be
regulated appropriately and clearly, setting out their rights and obligations and ensuring that they have
access to this information and that there are mechanis ms in place to see that it is applied fairly. This
could imply, amongst others, provisions to facilitate the swift adoption of decisions on individualapplications to temporarily enter and stay as service provider both in the interest of the enterprise
delivering the service and the person concerned, on the basis of objective and verifiable criteria and
the development of clear, simple and predictable application procedures.
13. General policies on access to information would greatly enhance transparency. For example
national information points (e.g. websites) could be created and maintained which could contain a
complete set of information relating to the admission of natural persons providing services and giving
contact details of national authorities competent to receive applications for relevantpermits/applications.
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