./.WORLD TRADE
ORGANIZATIONS/CSS/W/57
14 March 2001
(01-1414)
Council for Trade in Services
Special SessionOriginal:  English/
French
COMMUNICATION FROM CANADA
Initial Negotiating Proposal on Distribution Services
The attached communication has been received from the delegation of Canada with the
request that it be circulated to Members of the Council for Trade in Services.
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1. Canada reserves the right to modify this pro posal at any time. This proposal does not prejudge
Canada’s position on other service sectors, nor any future offer on this or other sectors. This proposal
should be read in conjunction with the principles and objectives as outlined in Canada’s initial
negotiating proposal.
A. INTRODUCTION
2. Distribution services constitute the principal link in the supply chain between producers and
consumers. The performance of this sector has a direct influence on the range of goods and services
available to businesses and consumers at competitive prices.
3. In the GATS sectoral services classification list, distribution services include commission
agents’ services, wholesale trade services, retailing services, franchising and other.
4. The distribution services sector, particularly wholesale and retail, accounts for a large share of
economic activity in both developed and developing countries — often in the range of between 10 to
20 percent of GDP. It is a sector that is characterized by high labour intensity.
5. Small- and medium-sized businesses (SMEs) are particularly active in the retail sector. Trade
in distribution services, especially for wholesale and retail, has traditionally been characterized by
commercial presence and undertaken by larger firms. However, advances in electronic commercehave created new trading opportunities for SMEs to engage in cross-border delivery of distribution
services. The efficient operation of distribution services depends on other services such as
transportation services.
6. Distribution services are often highly regulated. While the GATS affirms Member rights to
regulate, it also obliges Members to be transparent about their regulations. Canada encouragesMembers to increase their regulatory transparency in the area of distribution services.
7. Canada notes the importance of industry associations in the distribution services sector in
helping to maintain and better inform domestic regulatory practices where consumer, social and
business issues are concerned. In this respect, Canada notes the importance of strengthening such
associations, particularly in developing countries and least-developed countries.S/CSS/W/57
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8. Canada’s commitments in this sector are significant. Under the distribution services that we
have scheduled, Canada has listed very few limitations.
B. PROPOSAL
9. In the GATS negotiations, Canada believes that Members should:
• improve the quality and quantity of specific commitments in their schedules for
distribution services to at least the Canadian level;
• improve the level of transparency for distribution services with respect to domestic
regulation;
• secure improved mode 3 commitments, particularly with regard to the type of
corporate entities that firms can establish abroad; and
• secure commitments for cross-border trade that are not limited by commercial
presence requirements.
10. Canada supports facilitating greater liberalization by allowing Members to phase-in
commitments over a specified period. Although a method for phasing in commitments will have to be
agreed upon, Canada supports further exploration of this matter in this sector.
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