Unlike trade in goods whereby benefits can be calculated through tariff savings, trade in services focuses on the trading environment. FTAs seek to safeguard market access and ensure conducive conditions for service suppliers to thrive in.
FTAs support Trade in Services in 3 main ways:
1. Preferential Treatment
Singapore service suppliers enjoy preferential trade commitments from our FTA partners.
2. Predictable Operating Environment
Services commitments in FTAs lock in a certain minimum level of market access for our service suppliers. FTAs serve as an “insurance policy” to deter a trading partner from changing their laws to become more restrictive, even when government regimes change.
FTAs provide an opportunity for service suppliers to seek recourse should a trading partner choose to contravene its FTA commitments.
FTA partners are obliged to remove/reduce market access restrictions on:
FTA partners are obliged to accord treatment to services and service suppliers in a manner that is no less favourable than accorded to their own nationals.
FTA partners are obliged to ensure that general measures affecting trade in services are administered in a reasonable, objective and impartial manner.
Domestic Regulation disciplines apply to Qualification Requirements and Procedures, Technical Standards and Licensing Requirements. These measures should be based on objective and transparent criteria, should not be overly burdensome and should not in themselves restrict trade in services.
Example: Application procedures for licenses, qualification requirements for professionals
Most Favoured Nation Treatment
FTA partners are obliged to grant each other treatment no less favourable than what they grant to any other trading partner.
FTA partners are obliged to not require a service supplier of other FTA partners to establish or maintain a representative office or any form of enterprise, or to be resident, in its territory as a condition for the cross-border supply of a service.
FTA partners are obliged to make known all relevant measures affecting trade in services to each other within a reasonable period of time; through prompt publication, maintenance of enquiry points, and fair judicial review.
Mode 1: Cross-Border Supply
Consumer and Service Supplier remain in different countries. Only the service crosses the border. (E.g. A Singaporean doctor provides medical advice to a patient in a foreign country via e-mail/telephone.)
Mode 2: Consumption Abroad
Consumers making use of a service in another country. (E.g. Medical tourism. A foreign patient enters Singapore and receives treatment at a hospital located in Singapore.)
Also covered is the movement of consumer's property. (E.g. Sending medical equipment abroad for repair.)
Mode 3: Commercial Presence
Subsidiaries or branches which are set up in another country to provide services. (E.g. A Singaporean Medical Group sets up a hospital in a foreign country.)
Mode 4: Movement of Natural Persons
Individuals travelling from their own country to supply services in another country on a temporary basis. (E.g. A Singaporean doctor moves over to a foreign country to provide medical services to patients in that country.)
12 main categories (World Trade Organisation W/120 Services Sectoral Classification List)
Corresponding number of Central Product Classification [CPC]
CPC is a tool, Members may describe sectors by using other definitions.
Parties define the scope of commitments (i.e. sectors they apply to, limitations to commitments) in schedules
Services Chapter Lays out disciplines/rules for Parties
2 types of reservations
Annex I: Standstill reservation Enables FTA partner to preserve existing trade restricting measures. This means that it can only remove or loosen, and not tighten, current restrictions in future.
Annex II: Reservations for future flexibility FTA partner retains full discretion and flexibility to implement future trade restrictive measures for a particular service sector or government activity.