Trade in services

Component 5: Trade in Services


The PACER Plus Agreement aims to make it easier for people and businesses from PACER Plus countries to provide services to customers in each other’s countries. Trade in Services refers to activities which are part of a country’s economy but are not concerned with producing or manufacturing goods.

Across many Pacific Islands, services form the most significant component of economic activity. Services are also a potential source of export diversity, an important element for small island states where manufacturing capacity is limited.

Each PACER Plus country has identified comprehensive Schedules of Commitments in various sectors. PACER Plus Obligations within these sectors for Trade in Services aim to influence governments in the following areas:    

  1. Commitment to provide market access
  2. National Treatment
  3. Rules about how trade is administered
  4. Licensing, qualification, competence
  5. Authorisation of service suppliers
  6. Payments and Transfers

By promoting trade in services, consumers in each country are offered increased depth in markets, with a potential for more choice and a better standard of services.

Commitment to provide market access
  • PACER Plus countries do not impose numerical restrictions on services and service suppliers from other PACER Plus countries
  • PACER Plus countries do not require services suppliers from other PACER Plus countries to use a particular legal form if they want to establish a presence.
National Treatment
  • PACER Plus requires governments and officials to treat services and service suppliers from other PACER Plus countries in accordance with the national treatment obligation. That is, services and service suppliers from other PACER Plus countries are entitled to treatment that is no less favourable than the treatments a country provides, in like circumstances, to its own domestic services and services suppliers.
Rules about how procedures relating to trade in services is administered
  • PACER Plus requires that, in respect of the sectors listed in its Schedule of Commitments, a country  administers its procedures that apply generally to trade in services in a reasonable, objective and impartial manner.  
Requirement for licensing, qualification, competence
  • Licensing requirements:  where a government requires people to hold a licence to pursue a particular profession or occupation
  • Qualification requirements:  rules that set out what qualifications are required for someone to pursue a particular profession or occupation (for example, the Law Practitioners Act 1989 requires a practitioner to have sufficient professional knowledge and experience and training in a common law jurisdiction).
  • Verification of competence:  if a professional (for example, a doctor or lawyer) from another PACER Plus country wants to provide services, their competency should be verified by reviewing their education or experience, and ensuring that they have the requisite licences or certifications in another country.
Authorisation of service suppliers
  • PACER Plus allows countries to require official authorisation before services can be provided.  For example, some countries require a licence to provide telecommunications services.
Payments and Transfers
  • Governments have agreed no to restrict international transfers and payments for current transactions in economic sectors listed in the Schedules of Commitments on services. There is an exception to this where countries are in serious balance of payments and external financial difficulties.
In sectors not identified in a country’s Schedules of Commitments, a range of obligations still apply for all PACER Plus countries:
  • Most favoured nation – governments treat services and service suppliers from no less favourably that the treatment to suppliers from other non-PACER Plus countries
  • Monopolies – obligations to ensure monopoly suppliers of services do not abuse their positions in a manner that interferes with trade and investment.
  • Recognising business names – permit service suppliers from other PACER Plus countries to use the business name that they ordinarily trade under.
  • Contact Points – officials from one country can easily get in touch with their counterpart in other countries, and obtain information about other countries’ practices via a Contact Point
  • Transparency - all PACER Plus countries have made a commitment to publishing their laws, regulations and procedures so that individuals and businesses can easily find out about them.
    • International Agreements – A list of international agreements that the country is a party to and that relate to trade in services (eg. International civil aviation agreements).
    • Licensing requirements – Application requirements, criteria, renewal processes, applicable fees, timeframes, appeals processes, procedures for monitoring and compliance.
    • Qualification requirements – Application requirements, criteria, renewal processes, procedures for verifying and assessing qualifications, applicable fees, timeframes for processing applications, appeals processes, procedures for appeals on decisions.
    • Authorisation requirements – Application requirements, any periodic renewal requirements, generally applicable terms and conditions, appeals and review process for decisions made.
Who is it relevant to?
  • The Services Chapter of the PACER Plus Agreement is relevant to any agency in a PACER Plus country that is involved in regulating the services sector. In most countries, this will cover a variety of agencies, including those that regulate professionals (e.g. doctors, lawyers, teachers) and utilities (e.g. telecommunications, electricity, water).
Exceptions to Services Obligations
  • PACER Plus has a number of exceptions that allow countries to justify actions that would otherwise be in breach of the obligations of the Services Chapter. These exceptions are set out in Chapter 11 of the PACER Plus Agreement.

The outcome of all these provisions will provide a dynamic area that looks to benefit from laid out provisions. Countries will enjoy a higher quality of services, leading to new market access and generating competitiveness on the global scale.