Voon, Tania --- "Balancing Regulatory Autonomy with Liberalisation of Trade in Services: An Analytical Assessment of Australia's Obligations under Preferential Trade Agreements" [2017] MelbJlIntLaw 17; (2017) 18(2) Melbourne Journal of International Law 373

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AN ANALYTICAL ASSESSMENT OF AUSTRALIA’S OBLIGATIONS UNDER PREFERENTIAL TRADE AGREEMENTS

I INTRODUCTION

There are likely to be substantial gains from liberalizing trade in services, immediately and in the longer term provided the regulatory framework is adequate.^[1]

Producers gain from access to a larger market and higher prices, and consumers gain because they get access to both a wider variety of goods and services and to lower-priced imported goods and services.^[2]

Trade liberalisation and sovereign regulatory autonomy are both important concepts to bear in mind — and to balance — in devising or evaluating a preferential trade agreement (‘PTA’), and especially one that encompasses services. The relationship between liberalisation of trade in services and regulatory autonomy is complex and not necessarily linear. Thus, increased trade liberalisation does not necessarily correspond with decreased regulation or decreased autonomy: ‘it is by now generally accepted that liberalization requires re-regulation or sometimes original regulation’.^[3] Nor is regulatory autonomy an absolute good. Too much autonomy allowed under a services PTA (or other international trade agreement) may leave less scope for the agreement to have a positive impact on development and national and global welfare, in accordance with its underlying goals. A key difficulty therefore lies in ensuring that a state such as Australia has sufficient autonomy to regulate in the public interest (for example, to promote public health or protect the environment), without undermining the trade liberalisation (and corresponding welfare) objectives of a given PTA, or creating scope for abuse of those objectives in the name of regulatory autonomy.

In the multilateral context, the services agreement of the World Trade Organization (the General Agreement on Trade in Services (‘GATS’))^[4] aims, through a ‘fine balance’, ‘to re-regulate domestic policy in order to establish competition and market access in service sectors without curtailing the freedom of members to regulate so as to meet national policy objectives’.^[5] This balance is captured in the preamble to the GATS:

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;^[6]

Bregt Natens has used a case study of the European Union to investigate the relationship between trade in services and regulatory autonomy.^[7] I adopt a comparable approach in this article, focusing on services aspects of Australia’s PTAs. Natens emphasises the importance of services trade to the global economy, as services facilitate economic growth,^[8] for example with ‘[t]ransport, logistics, finance, communication, other business, and professional services’ all being ‘prerequisites for global value chains’.^[9] He also points out the heightened difficulty of balancing liberalisation and autonomy in the context of trade in services due to the wide scope of services and their extensive regulation,^[10] which is often more difficult to identify, measure and assess than barriers to trade in goods such as tariffs.^[11]

Before turning to the substantive aspects of Australia’s PTAs on services, I note in Part II of this article that a number of areas are typically excluded from the scope of the core services chapter in Australia’s PTAs. In Part III, I explain changes in Australia’s approach to positive and negative lists in its PTAs over time, while also examining the inclusion of key services obligations in Australia’s PTAs: national treatment, most favoured nation (‘MFN’) treatment, local presence, and domestic regulation. In Part IV, I summarise Australia’s own services commitments in particular sectors (in positive list PTAs) and Australia’s listed non-conforming measures (in negative list PTAs), taking particular note of the unusual approach of Australia’s first services PTA: the Protocol on Trade in Services to the Australia New Zealand Closer Economic Relations — Trade Agreement (‘ANZCERTA Services Protocol’)^[12] concluded in 1988. In Part V, I address the ‘general exceptions’ included in Australia’s PTAs, as modelled on the general exceptions in GATS art XIV.

Although it is difficult to generalise from this brief survey, some patterns emerge. In particular, three services agreements appear to have played an important role in the development of Australia’s PTAs, with other PTAs following and building on them: first, the GATS, typically understood as a ‘positive list’ agreement in which only those sectors listed are bound by particular GATS obligations; secondly, the Australia–United States Free Trade Agreement (‘AUSFTA’),^[13] which adopts instead a ‘negative list’ approach according to which services and service sectors are covered by core obligations unless otherwise specified by the relevant party; and now, thirdly, the Trans-Pacific Partnership (‘TPP’),^[14] another negative list agreement that contains additional innovations and flexibilities. The use of TPP provisions in the amendments agreed to the Singapore–Australia Free Trade Agreement in 2016 (‘SAFTA’)^[15] suggests that the TPP may play an important role in future negotiations and treaties of Australia and other TPP countries (and, indeed, non TPP countries), even though the entry into force of the TPP in its current form now appears impossible. In the future, the Trade in Services Agreement (‘TiSA’) — under negotiation among 23 WTO members including the EU representing its 28 member states (led by Australia, the EU and the United States, but now facing uncertainty following the election of President Donald Trump) — may take up a fourth influential role in the development of services PTAs.

My examination of the provisions and annexes of Australia’s PTAs suggests that Australian negotiators have identified certain ‘sensitive’ areas and seek to protect Australia’s regulatory autonomy in those areas, with an eye to future sensitivities as well. Australia’s general shift towards negative rather than positive lists in its PTAs may be understood as an effort by Australia to encourage greater liberalisation among its trading partners in order to obtain further economic benefits from services trade, while the inclusion of strong non-conforming measures (‘NCMs’), exceptions and exclusions from the scope of the core services chapter simultaneously enables preservation of policy space by both parties. Australia’s awareness of community concerns about sectors such as social services appears to be reflected in the various mechanisms incorporated in Australia’s services chapters in PTAs to avoid or soften particular obligations.^[16] However, these concerns may be rooted in mercantilist impulses of the kind that PTAs and international trade law more generally are designed to overcome. Greater services liberalisation, with its attendant economic benefits, may require a scaling back of exceptions, exclusions and NCMs, the proliferation of which also raises questions in relation to GATS compatibility.

II SCOPE OF SERVICES CHAPTERS IN AUSTRALIA’S PTAS

Australia’s post-GATS PTAs follow GATS in excluding from (at least) the scope of their core services obligations: government procurement^[17] and services supplied in the exercise of governmental authority.^[18] These PTAs also exclude from their services chapters subsidies or grants.^[19] In contrast, although the GATS contains no specific subsidies disciplines,^[20] subsidies are not excluded from other GATS obligations such as non-discrimination.^[21] Australia’s only PTA predating the GATS is the ANZCERTA Services Protocol, which excludes government procurement and subsidies from the national treatment obligation^[22] and also does not apply to taxation measures.^[23] Australia’s other PTAs take a more nuanced approach to taxation measures, while providing that they do not apply to taxation measures except to the limited extent specified.^[24] Negative list PTAs generally apply national treatment and MFN treatment obligations under the core services chapter to taxation measures in some circumstances,^[25] while the 2016 amendments to SAFTA provide for only national treatment to apply to taxation measures.^[26] Some PTAs provide for rights and obligations to be imposed regarding taxation measures to the extent applicable under a WTO agreement^[27] and also in some instances under other PTA provisions (eg regarding investment).^[28]

These limitations on the scope of the core services chapter in Australia’s PTAs grant additional leeway to the parties in regulating services (although some other obligations may apply under separate chapters on government procurement etc). For example, government procurement may make up a large portion of services transactions in a given country. Governments may also be able to use taxation measures and subsidies as effective tools to achieve their regulatory goals in the services sector or potentially as tools of protectionism. The relatively limited variation among Australia’s PTAs in relation to these exclusions may suggest that Australia has no intention to remove them on the path to progressively greater liberalisation in services trade, such that they represent significant scope for regulatory autonomy (or to put it differently, protectionism and discrimination) in relation to government procurement, taxation and subsidies, even if the depth and breadth of services obligations increase.

III CORE SERVICES OBLIGATIONS IN AUSTRALIA’S PTAS

A Non-Discrimination, Market Access and Local Presence: Listing and Modes

In understanding Australia’s PTA obligations with respect to particular service sectors, we must first comprehend the concept of negative and positive listing approaches. The MFN rule in GATS art II adopts a typical negative list approach, whereby all measures covered by GATS are subject to the rule except to the extent that a WTO member has listed a relevant MFN exemption:

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.^[29]

In contrast, the market access and national treatment obligations under GATS adopt a positive list approach, whereby they apply only in the sectors listed in the relevant member’s GATS Schedule, and subject to any limitations listed in the Schedule:

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.^[30]

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.^[31]

Among Australia’s PTAs, as shown in Table 1, only the ANZCERTA Services Protocol entered into force before GATS, and it adopts what may be understood as the opposite approach: a negative list^[32] for market access^[33] and national treatment^[34] and a positive list for MFN.^[35] This agreement has been credited as the first PTA adopting a negative list approach for trade in services in the absence of an investment chapter, before both services and investment being taken up in the North American Free Trade Agreement.^[36] In contrast, like GATS, the Australia–Thailand Free Trade Agreement (‘TAFTA’), Agreement Establishing the ASEAN–Australia–New Zealand Free Trade Area (‘AANZFTA’), and Malaysia–Australia Free Trade Agreement (‘MAFTA’) all adopt a positive list approach for market access^[37] and national treatment,^[38] although they lack a traditional MFN obligation.^[39] Most other Australian PTAs adopt a negative list approach for MFN (where an MFN obligation is included),^[40] market access,^[41] and national treatment.^[42] The exception is the Free Trade Agreement between Australia and the People’s Republic of China (‘ChaFTA’), signed 17 June 2015, in which, unusually, Australia adopts a negative list approach^[43] and China adopts a positive list approach.^[44] As in the investment chapter of ChAFTA, the ChAFTA provision for review of the services chapter specifies that the ‘next round of the negotiation on trade in services’ is to be conducted ‘in the form of negative listing approach’.^[45] In March 2017 the parties indicated their intention to commence the services and investment reviews in 2017.^[46] The proposed approach for TiSA is also unusual in the context of Australian PTAs, but perhaps less so in the context of GATS; TiSA is proposed to adopt a negative list approach for MFN and a positive list approach for market access (both as in GATS) but moves to a negative list approach for national treatment.^[47]

The GATS provisions generally apply to all four modes of service supply (mode 1: cross border supply by a supplier into the consumer’s territory;^[48] mode 2: consumption by a consumer abroad;^[49] mode 3: commercial presence, ie local presence;^[50] mode 4: presence of natural persons, where the supplier rather than the consumer moves).^[51] GATS also includes annexes on specific sectors such as financial services and telecommunications. Some of Australia’s PTAs follow this four-mode approach.^[52] Several of Australia’s (especially newer, negative list focused) PTAs contain a core services chapter targeting ‘cross border’ trade in services^[53] (defined to include modes 1, 2 and 4 but not 3)^[54] while they and other Australian PTAs contain separate provisions or chapters regarding telecommunications,^[55] financial services,^[56] electronic commerce,^[57] and movement of natural persons.^[58]

The separation of mode 3 in many of Australia’s PTAs may indicate a greater level of comfort with modes 1, 2 and 4 of trading services (and particularly mode 1, which is most easily analogous to trade in goods (supply across borders)), leaving mode 3 to be dealt with as an investment as discussed further below. Sensitivities (connected with migration issues) that are reflected in limited GATS commitments with respect to mode 4^[59] can be separately addressed in a PTA chapter on movement of natural persons. Similarly, technicalities and sector specific concerns in relation to telecommunications, electronic commerce and financial services can also be separately addressed with dedicated PTA chapters.

The Australian PTAs containing core services chapters that exclude mode 3 include an additional (negative list) obligation with regard to local presence, first exemplified in the AUSFTA:

Neither Party may require a service supplier of the other Party 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.^[60]

This obligation builds on the GATS, which imposes various disciplines on residency requirements and registration requirements (eg domestic regulation obligations under art VI:5), particularly if discriminatory and in the face of full commitments under mode 1 (ie national treatment obligations under art XVII).^[61]

Before the AUSFTA, the ANZCERTA Services Protocol took a slightly different approach, providing a more restricted obligation in relation to local presence requirements that draws on language from the chapeau of the General Agreement on Tariffs and Trade (‘GATT’) art XX and GATS art XIV:

Notwithstanding that such measures may be consistent with Articles 4, 5, 6 and 7 of this Protocol, neither Member State shall introduce any measure, including a measure requiring the establishment or commercial presence by a person of the other Member State in its territory as a condition for the provision of a service, that constitutes a means of arbitrary or unjustifiable discrimination against persons of the other Member State or a disguised restriction on trade between them in services.^[62]

The Agreement between Australia and Japan for an Economic Partnership (‘JAEPA’) also applies a local presence prohibition to all modes of supply apart from mode 3 (commercial presence),^[63] which by definition requires local presence.

Australia’s PTAs also deal in different ways with the overlapping nature of services and investment, in the sense that the supply of services through mode 3 (commercial presence) normally involves foreign investment. This link is important^[64] because of the large proportion of trade in services that occurs via mode 3: according to a 2009 WTO Secretariat estimate mode 3 accounts for ‘approximately 55–60 per cent of all services trade falling under the GATS’, while foreign direct investment (‘FDI’) in services accounts for ‘about two-thirds of FDI inflows worldwide’.^[65] For Australia, data for 2014–2015 shows most majority foreign owned affiliates operating in the services sector.^[66] The link between investment and mode 3 services trade is more pronounced in Australia’s PTAs than in the WTO agreements because of the inclusion of significant investment obligations in most of these PTAs, and particularly where investor–state dispute settlement (‘ISDS’) is included. In contrast, the WTO’s Agreement on Trade-Related Investment Measures (‘TRIMS Agreement’)^[67] is confined to merchandise trade and contains only minimal investment protections such as a national treatment requirement with respect to trade related investment measures.^[68]

Under MAFTA, certain investment provisions in ch 12 (including the minimum standard of treatment and expropriation) ‘apply, mutatis mutandis, to’ mode 3 services, ‘but only to the extent that any such measure relates to a covered investment and an obligation under this Chapter, regardless of whether such a service sector is scheduled in a Party’s Schedule of Specific Services Commitments’.^[69] AANZFTA adopts a similar approach, while also allowing ISDS in respect of mode 3 services supply.^[70] In contrast, the SAFTA amendments agreed in 2016 explicitly state, ‘[f]or greater certainty’, that nothing in the services chapter is subject to ISDS.^[71] The TPP explicitly excludes from ch 10 (on Cross Border Trade in Services) ‘the supply of a service in the territory of a Party by a covered investment’ (that is, the supply of a service through mode 3 (commercial presence),^[72] to the extent that this amounts to a covered investment).^[73]

Table 1: Non-Discrimination, Market Access and Local Presence in Australia’s PTAs

In my view, a negative list approach is inherently more liberalising than a positive list approach because everything is covered unless otherwise specified.^[74] In theory, a negative or positive list approach could be used to achieve the same outcomes, and the negotiating dynamics and bargains reached may affect the resulting liberalisation more than the listing approach.^[75] The distinction between negative and positive lists is also admittedly somewhat artificial, since a listing of sectors covered typically also includes limitations, conditions or reservations to that coverage.^[76] However, behavioural analysis tentatively suggests that factors such as framing effects and status quo bias may make negative lists more conducive to liberalisation.^[77] More importantly, a negative list is more likely to cover ‘new’ services, as technology develops (unless a reservation covering future NCMs is allowed), whereas a positive list may not;^[78] in that sense a negative list approach is automatically progressive.

Under the GATS, for example, some WTO members have undertaken commitments for services sectors that lack specific sub-sector categories under the commonly used GATS classification (such as 2.E ‘Communication Services: Other’ and 4.E ‘Distribution Services: Other’),^[79] meaning that future communication or distribution services not mentioned in other categories would be covered. The proper interpretation and application of a given PTA (or GATS Schedule) may also sometimes enable coverage of unspecified services in a positive list setting. In China — Measures Affecting Trading Rights and Distribution Services for Certain Publications and Audiovisual Entertainment Products, the Appellate Body held that China’s commitment in respect of the distribution of sound recordings extended to electronic distribution;^[80] a different approach to the evolution of GATS commitments could have led to a gradual reduction in the scope of commitments, particularly in dynamic sectors such as telecommunications and other technology related services.^[81]

Australia’s overall move away from a positive list approach and towards a negative list approach can be understood in principle as increasing the liberalising effect of Australia’s PTAs in relation to services. However, the premise of a negative list may encourage negotiators to list more exempted measures than they otherwise might, in order to avoid accidentally making greater commitments than intended in particular sectors. Thus, in particular cases, a negative list approach may end up being less liberalising than a positive list approach;^[82] that is the risk of endless NCMs.

Australia appears to have a clear preference for negative listing (modified in TiSA in response to other parties’ preferences),^[83] and its experience with this approach makes it easier for it to apply such an approach.^[84] For other countries without treaty practice embracing the negative list, the review necessary to allow the listing of NCMs can be significant and burdensome, particularly for developing countries.^[85] However, by encouraging PTA partners to engage in such an exercise, Australia may pursue several benefits in connection with transparency. To begin with, listing Australia’s NCMs (such as those mentioned below) provides a basis for pointing to areas of concern for the Australian community that are explicitly carved out of the agreement or of particular obligations (increasing the chances of community acceptance of the agreement). Moreover, a list of NCMs of PTA partners, particularly an extensive list, can provide a basis for Australia to seek further liberalisation in subsequent reviews of the PTA or new PTAs encompassing the same parties (much as the process of ‘tariffication’ — that is, conversion of import quotas to tariffs — in the Uruguay Round was said to provide a clearer basis for progressive reduction of tariffs in future rounds).^[86] The same applies to Australia: the list of NCMs may be usefully whittled down over time to facilitate international trade in services for the overall benefit of Australian consumers and service suppliers, where certain NCMs are not considered necessary for the protection of regulatory autonomy.

B Domestic Regulation

Australia’s PTAs address the different components of the domestic regulation provisions in GATS art VI in different ways, including in some cases through broader transparency provisions in a separate chapter on transparency (which is also covered separately in GATS art III). Below I show the extent to which Australia’s PTAs maintain four key aspects of GATS art VI, as summarised in Table 2. To some degree the extent of alignment with GATS corresponds with whether the PTA takes a positive list approach to the national treatment and market access obligations, as in the GATS (see above Table 1). Those PTAs tend to follow GATS in limiting certain obligations to sectors or services in relation to which the relevant party has made ‘specific commitments’ (ie national treatment, market access or additional commitments). That approach makes less sense for negative list PTAs, since they do not generally have explicit commitments to particular sectors or services. Since the domestic regulation obligations are not generally limited to particular sectors or services in negative list PTAs, those PTAs have sometimes adopted alternative means of ensuring regulatory flexibility in the face of these procedural requirements, such as subjecting them to listed NCMs.

Beginning with the positive list PTAs, the ANZCERTA Services Protocol does not contain the GATS art VI provisions, having been concluded in 1988 (well before the GATS entered into force in 1995). However, the ANZCERTA Services Protocol does contain general obligations concerning licensing and certification,^[87] transparency,^[88] and notification.^[89]

TAFTA incorporates GATS art VI:1, 2, 3, 5 and 6 by way of reference.^[90] The other positive list PTAs tend to mirror the wording of GATS art VI. Article VI:1 provides that, ‘[i]n 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’.^[91] This general requirement can be understood as being parallel to GATT art X:3(a), which requires each WTO Member to ‘administer in a uniform, impartial and reasonable manner all its laws, regulations, decisions and rulings of the kind described in paragraph 1 of this Article’, being ‘[l]aws, regulations, judicial decisions and administrative rulings of general application’ pertaining to matters such as customs valuation, tariffs, taxes, restrictions on imports or exports, or affecting sale, distribution, transportation etc.^[92]

AANZFTA and MAFTA (also positive list PTAs) adopt the GATS art VI:1 wording,^[93] meaning that the requirement of reasonable, objective and impartial administration applies only to measures of general application, and only to sectors in which the relevant member has made specific commitments (ie national treatment or market access commitments). Somewhat strangely, ChAFTA also adopts this language,^[94] even though Australia (unlike China) has a negative list approach to national treatment and market access under ChAFTA. Presumably, for Australia under ChAFTA, the requirement of reasonable, objective and impartial administration applies to measures of general application in any service sector that has not been completely eliminated in Australia’s NCMs lists in Annex IIIA or IIIB.

Among the negative list PTAs, the Australia–Chile Free Trade Agreement (‘ACIFTA’), JAEPA, TPP and the SAFTA amendments agreed in 2016 adopt the GATS art VI:1 language, but without the restriction to sectors in which specific commitments are made,^[95] which is logical as that reference makes more sense for positive list PTAs. However, all SAFTA’s domestic regulation obligations are subject to the NCMs listed in Annexes 4–I and 4–II,^[96] with the TPP taking an analogous approach.^[97] The ANZCERTA Services Protocol contains no obligation corresponding to GATS art VI:1 (which, as noted above, did not exist when the Protocol was concluded). The Korea–Australia Free Trade Agreement (‘KAFTA’) contains a broader obligation to this effect in the transparency chapter.^[98] The AUSFTA contains specific obligations of reasonable, objective and impartial administration of measures in the telecommunications^[99] and financial services^[100] settings. The AUSFTA transparency chapter imposes on each party a more limited general obligation to provide notice and an opportunity to present arguments to administrative agencies ‘[w]ith a view to administering its laws, regulations, procedures, and administrative rulings of general application ... in a consistent, impartial and reasonable manner’.^[101]

The second key aspect of GATS art VI is the requirement in art VI:2 (not limited to sectors in which commitments have been made) to ‘maintain or institute as soon as practicable judicial, arbitral or administrative tribunals or procedures’ to allow for prompt review and remedies for ‘administrative decisions affecting trade in services’.^[103] All of Australia’s PTAs apart from the ANZCERTA Services Protocol contain the same or a similar requirement, in either their services chapter^[104] or their transparency chapter.^[105] However, SAFTA 2016’s obligation is not to establish such tribunals or procedures but to apply any such tribunals or procedures on a non-discriminatory basis:

Each Party shall ensure that its judicial, arbitral or administrative tribunals or procedures which provide for the prompt review of, and where justified, appropriate remedies for, administrative decisions affecting trade in services are open on a non-discriminatory basis to a service supplier of the other Party.^[106]

Again, this obligation is subject to the NCMs in annexes 4–I and 4–II.^[107] GATS art VI:3 provides:

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.^[108]

Australia’s positive list PTAs (TAFTA, AANZFTA and MAFTA, as well as ChAFTA) follow GATS art VI:3 in imposing such procedural requirements where ‘authorization is required for the supply of a service on which a specific commitment has been made’.^[109] As for the negative list PTAs, the AUSFTA and KAFTA follow the GATS language subject to Annex II NCMs.^[110] ACIFTA and JAEPA contain similar obligations without the restriction to services in relation to which a specific commitment has been made.^[111] These provisions also add procedural elements such as requirements to provide written reasons for a decision not to grant an application^[112] and to identify additional information required to complete an incomplete application.^[113] The TPP and SAFTA 2016 contain further procedural elements but subject to NCMs in both annexes.^[114]

Under GATS art VI:5 (pending the entry into force of disciplines that were expected to be developed by the Council for Trade in Services under art VI:4), a WTO member must not ‘apply licensing and qualification requirements and technical standards that nullify or impair’ specific commitments made by that member in a manner that ‘could not reasonably have been expected of that Member at the time the specific commitments ... were made’ and does not comply with one or more of these criteria from GATS art VI:4:

GATS art VI:5(b) adds that, in determining whether a member complies with this obligation, ‘account shall be taken of international standards of relevant international organizations applied by that Member’. Footnote 3 adds that such organisations are ‘international bodies whose membership is open to the relevant bodies of at least all Members of the WTO’.

Australia’s positive list PTAs (TAFTA, AANZFTA and MAFTA, as well as ChAFTA) all adopt provisions aligned with GATS arts VI:5 and VI:6.^[115] However, apart from ACIFTA,^[116] Australia’s negative list PTAs limit the obligation, so that parties must only ‘endeavour’ to ensure rather than being obliged to ensure compliance with the specified criteria.^[117] This change in the language may reflect the fact that this obligation is not, in negative list PTAs, restricted to any particular service or service sector.

The TPP and SAFTA 2016 not only refer to a ‘right to regulate’ (whatever that means) but also remove the criterion of ‘not more burdensome than necessary’, which may be seen as analogous to art 2.2 of the WTO’s Agreement on Technical Barriers to Trade (‘TBT Agreement’):^[118]

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, while recognising the right to regulate and to introduce new regulations on the supply of services in order to meet its policy objectives, each Party shall endeavour to ensure that any such measures that it adopts or maintains are:

Finally, TPP and SAFTA 2016 make this obligation subject to the NCMs listed in either annex.^[119] TPP and SAFTA 2016 are Australia’s only negative list PTAs that include the GATS reference to the relevance of international standards in determining compliance with this obligation.^[120]

These changes, particularly in the TPP and the SAFTA 2016, may reflect a growing understanding of the potential breadth and uncertainty of a no ‘more burdensome than necessary to ensure the quality of the service’ requirement,^[121] as well as the criteria regarding objectivity and restrictions on the supply of a service. The multi-layered approach of SAFTA 2016 to this problem — invoking the NCMs lists in both annexes with respect to all domestic regulation obligations and removing the obligation regarding the burden of such measures — may represent a concerted effort to preserve regulatory autonomy, particularly in relation to sensitive service sectors such as health and education. However:

In order for regulations to achieve their perceived objectives, certain conditions need to be met. In particular, the adverse social impact of an unregulated market should be higher than the risks associated with ‘regulatory failure’ on the part of the governments and administrations involved. The latter cannot simply be assumed to be impartial advocates of the public interest ... and to have more accurate information and foresight than private individuals or groups. The regulatory process ... is subject to vested interests lobbying for influence. ... Inventors and innovators, consumers and taxpayers typically play second fiddle.^[122]

WTO jurisprudence suggests these overlapping protections of policy space may unnecessarily undermine the purpose of the domestic regulation obligations (and trade liberalisation in general), for example to prevent unduly burdensome regulation that stifles competition and innovation, privileging incumbents. To date, the WTO Appellate Body has never found a violation of the requirement in TBT Agreement art 2.2 that technical regulations not be ‘more trade restrictive than necessary to fulfil a legitimate objective, taking account of the risks non-fulfilment would create’, instead adopting a deferential approach to this provision, in contrast to its analysis under TBT Agreement art 2.1 with respect to discriminatory measures.^[123] Although these results would not determine or necessarily even influence the outcome under Australia’s services PTAs, they indicate the potential for appropriate analysis and understanding of government regulatory approaches in interpreting and applying obligations of proportionality such as GATS art VI:4(b).

IV AUSTRALIA’S SERVICES COMMITMENTS AND NON-CONFORMING MEASURES

A ANZCERTA Services Protocol: Annex

Australia’s first ‘positive list’ entailed commitments to the MFN obligation for sectors inscribed in the Annex to the ANZCERTA Services Protocol.^[124] Yet this Annex serves two purposes: both to apply the MFN obligation to listed sectors^[125] (pursuant to a positive list approach) and to apply — through additional descriptions under the listed sectors — limitations and conditions to not only the MFN obligation but also (pursuant to a negative list approach) the national treatment and market access obligations.^[126] This approach has led to unusual developments through progressive negotiation. Over time, Australia has removed certain sectors from the Annex, consequently removing not only the corresponding limitations and conditions on national treatment/market access commitments but also the MFN obligation with respect to those sectors. These revisions appear to have taken place on two occasions, as shown in Table 3.

The most recent revision of the Annex was effected by a letter that is publicly available, in which the Australian Minister for Trade and Investment advises the New Zealand Minister of Trade that the Australian government ‘is removing from the Annex to the Protocol the inscription “Broadcasting and Television: Limits on foreign ownership as set out in the Broadcasting Services Act 1992” with effect from the date of this letter’.^[127] The letter attaches a copy of the amended Annex, which removes not only the specified inscription regarding limits on foreign ownership, but the sector ‘Broadcasting and Television’ itself (while retaining the separate sector of ‘Broadcasting and Television (short wave and satellite broadcasting)’).

As shown in Table 3, as Australia has gradually reduced the list of sectors inscribed in the Annex, the limitations and conditions on its market access and national treatment commitments have decreased, but at the same time the sectors covered by the MFN obligation have also decreased. This may be an unintended quirk arising from the use of the Annex as both a positive and negative list, in contrast to several of Australia’s other PTAs, which adopt a negative list approach to MFN, national treatment and market access, and also in contrast to the GATS, which contains separate schedules of MFN exemptions (pursuant to a negative list approach) and national treatment/market access commitments (pursuant to a positive list approach). The unusual example of the ANZCERTA Services Protocol may caution against combining annexes or other lists of negative and positive list commitments (notwithstanding the blurring of the two approaches as acknowledged above), given the potential for unwittingly (or deliberately) reducing commitments over time instead of engaging in progressive liberalisation of trade in services.

The significance of this development in the ANZCERTA Services Protocol may be minimised from the perspective that the market access and national treatment obligations are sufficient to protect foreign services and service suppliers, such that once these obligations apply in full, the MFN obligation is no longer needed as a ‘second best’ protection. However, most PTAs (and most WTO agreements, including the GATS) recognise the MFN obligation as an important independent protection rather than one that is superfluous where general national treatment and market access obligations apply.

Rather than referring to foreign investment policy in the Annex as a limitation on national treatment or market access, the text of the ANZCERTA Services Protocol itself specifies that the ‘provisions of this Protocol shall apply subject to the foreign investment policies of the Member States’.^[128] Similar provisions are included in other ways in other Australian PTAs, as discussed further below.

B Positive Lists: Commitments, Limitations and Conditions

Apart from the ANZCERTA Services Protocol, Australia’s three PTAs adopting positive lists follow the GATS approach, namely a schedule of commitments to accord national treatment and market access.^[129] TAFTA, AANZFTA and MAFTA also adopt a structure similar to GATS schedules, so that the schedules look quite similar, except that the TAFTA schedule is not divided into columns for market access, national treatment and additional commitments. As noted above, unlike GATS, these three PTAs contain no MFN obligation and therefore no list of MFN exemptions.

Some commitments that Australia has made in these three PTAs that are not found in its GATS schedule are with respect to:

Some common limitations and conditions on Australia’s services obligations under these three PTAs are with respect to:

Australia’s most recently concluded PTAs — the TPP and the amendments to SAFTA agreed in 2016 — adopt a different approach, facilitating comparisons with GATS commitments. Even though these agreements adopt a negative list approach for the MFN, market access and national treatment obligations (which are therefore subject to specified NCMs as discussed below), the relevant negative list annexes also include an Appendix A setting out Australia’s ‘market access improvements’ in comparison with Australia’s GATS commitments (that is, in a positive list manner).^[130] Appendix A nevertheless forms part of the negative list approach by virtue of a reservation or NCM that specifies for market access with respect to all service sectors:

Australia reserves the right to adopt or maintain any measure at the regional level of government that is not inconsistent with Australia’s obligations under Article XVI of GATS.

For the purposes of this entry, Australia’s Schedule of Specific Commitments is modified as set out in Appendix A.^[131]

The GATS commitments are also subject to change, as the reservation is specified to include commitments made under GATS art XVI ‘after the date of entry into force of this Agreement’.^[132] As with Australia’s more positive list PTAs, the market access improvements include additional coverage of telecommunications and environmental services.

C Negative Lists: Non-Conforming Measures

Australia’s seven PTAs employing negative lists for the MFN, market access and national treatment obligations are, as shown above in Table 1: AUSFTA, ACIFTA, KAFTA, JAEPA, ChAFTA (although China adopts a positive list approach to all three obligations), the 2016 agreed SAFTA amendments, and the TPP. These lists are in theory more easily comparable, given that they should all include measures imposed by Australia that do not conform to these three core services obligations. However, the complexity of the descriptions and their separation into different schedules makes comparisons more difficult.

The AUSFTA can be seen as establishing the new model of negative lists for Australia’s PTAs, which subsequent PTAs have tended to follow. The AUSFTA provides, in relation to measures that do not conform with the obligations regarding national treatment (art 10.2), MFN treatment (art 10.3), market access (art 10.4) and local presence (art 10.5) in respect of cross border trade in services (mode 1):

2 Articles 10.2, 10.3, 10.4, and 10.5 do not apply to any measure that a Party adopts or maintains with respect to sectors, sub-sectors, or activities as set out in its Schedule to Annex II.^[133]

The lists of NCMs in Australia’s PTAs are typically common to the services and investment chapters. That is, for example, Annexes I and II referred to above contain NCMs in connection with both services and investment obligations under the AUSFTA. The significance of the different annexes is also common to the two areas. Thus, the above wording means with respect to Annex I that: (i) existing NCMs of local government are exempt even if not specifically listed as NCMs; (ii) amendments to NCMs are covered only to the extent that they do not decrease the conformity of the measures (known as a ‘standstill’ mechanism); and (iii) amendments that enhance the conformity of NCMs are covered, and subsequent amendments cannot return to a lower degree of conformity (a ‘ratchet’ mechanism). In addition, a party may list in Annex II ‘sectors’, ‘sub-sectors’ or ‘activities’ in which NCMs are exempt, without the need to list them and regardless of whether they exist at the time the treaty is concluded. The standstill and ratchet mechanisms do not apply to measures falling within the scope of the areas listed in Annex II. Annex II thus provides a much greater degree of flexibility to parties and less trade liberalising effects.

These seven ‘negative list’ PTAs include certain key areas of interest from the perspective of regulatory autonomy, as set out in Table 4.

As shown in Table 4, some of the listing approaches are not always consistent, for example as to whether particular NCMs are listed in Annex I or Annex II (or their equivalents). However, apart from this distinction they are often similar in scope and content. For example, the typical Annex II type NCM listing for social services applies to non-conformity with national treatment, MFN treatment and local presence provisions as well as certain investment obligations (regarding performance requirements and senior management) and reads:

Australia reserves the right to adopt or maintain any measure with respect to the provision of law enforcement and correctional services, and the following services to the extent that they are social services established or maintained for a public purpose: income security or insurance, social security or insurance, social welfare, public education, public training, health, and child care.^[137]

A footnote to this provision in the most recent two PTAs specifies, ‘[f]or greater certainty’, that ‘measures adopted or maintained with respect to the provision of services covered by this entry include measures for the protection of personal information relating to health and children’.^[138] An additional footnote to this provision in some newer PTAs specifies ‘[f]or the avoidance of doubt’ that such services include ‘any measure with respect to: the collection of blood and its components; the distribution of blood and blood related products, including plasma derived products; plasma fractionation services; and the procurement of blood and blood related products and services’.^[139] Rather than a footnote, KAFTA contains instead a separate entry for such blood related matters, specifying existing legislation with respect to ‘Australia’s policy on blood self-sufficiency’.^[140]

The typical Annex II type NCM listing for tobacco, alcoholic beverages and firearms applies to non-conformity with the market access obligation for distribution services and states: ‘Australia reserves the right to adopt or maintain any measure with respect to wholesale and retail trade services of tobacco products, alcoholic beverages, or firearms’.^[141] Extensive provisions regarding broadcasting tend to relate to matters such as ‘transmission quotas for local content’ and ‘[s]ubsidies or grants for investment in Australian cultural activity where eligibility for the subsidy or grant is subject to local content or production requirements’.^[142] NCMs with respect to the MFN obligation apply to ‘preferential co-production arrangements for film and television productions’.^[143] Foreign investment limits are sometimes specifically included with respect to national treatment in the newspapers sector.^[144] NCMs with respect to culture are sometimes linked to those with respect to indigenous matters, such as in the SAFTA amendments agreed in 2016:

Australia reserves the right to adopt or maintain any measure with respect to the creative arts, Indigenous traditional cultural expressions and other cultural heritage.^[145]

The general indigenous-focused listing applies to all sectors and to market access, national treatment, local presence, and investment obligations concerning performance requirements and senior management, including with respect to services:

Australia reserves the right to adopt or maintain any measure according preferences to any Indigenous person or organisation or providing for the favourable treatment of any Indigenous person or organisation in relation to acquisition, establishment or operation of any commercial or industrial undertaking in the service sector.^[146]

The various NCM listings for foreign investment policies are broad and note several different legislative components of ‘Australia’s foreign investment framework’, which imposes notification and approval requirements on foreign investments above certain thresholds (eg AUD252 million) in sectors such as telecommunications and in other sectors above higher thresholds (eg AUD1.094 million).^[147]

As discussed below, some of Australia’s PTAs contain exceptions regarding other international agreements. Moreover, Australia’s Annex 4–II of the 2016 agreed SAFTA amendments contains a general reservation for all sectors with respect to the MFN obligation in the services and investment chapters under which ‘Australia reserves the right to adopt or maintain any measure that accords more favourable treatment to the service suppliers or investors of non Parties under any bilateral or multilateral international agreement in force on, or signed prior to’, SAFTA 2016’s entry into force.^[148] That description could extend to pre-existing PTAs, the WTO agreements, and bilateral investment treaties (‘BITs’) (AUSFTA contains a similar NCM listing in Australia’s Annex II).^[149] A footnote to this provision confirms that it extends to ‘subsequent review or amendment’ of such an agreement, including ‘any existing or future protocol’ to the ANZCERTA Services Protocol.^[150] ACIFTA,^[151] KAFTA,^[152] JAEPA^[153] and ChAFTA^[154] adopt a similar approach, as does the TPP, which also adds a reference to measures according more favourable treatment ‘to any service supplier or investor of a Pacific Island Forum member state under any international agreement’ whether signed or in force before or after the TPP.^[155]

In addition to those types of NCMs summarised in Table 4, some common listings apply to:

V EXCEPTIONS TO SERVICES OBLIGATIONS

In this Part I examine common exceptions in Australia’s PTAs, pursuant to which states party may derogate from their services obligations subject to certain conditions. As I have focused on the ‘cross border trade in services’ and ‘trade in services’ chapters of Australia’s FTAs rather than the chapters specific to financial services, telecommunications services, or movement of natural persons, I do not analyse exceptions in the PTAs that are specific to financial services,^[159] telecommunications services,^[160] or movement of natural persons.^[161] All of Australia’s PTAs, as well as the GATS, contain security exceptions,^[162] exceptions regarding the disclosure of confidential information,^[163] and ‘general exceptions’.^[164] Australia’s PTAs tend to follow the relevant GATS provisions with respect to these matters. I focus here on the general exceptions and related extensions to the GATS provisions in the PTAs, before turning to some additional exceptions regarding international agreements.

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:

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.

Most Australian PTAs simply incorporate GATS art XIV, mutatis mutandis, into the agreement. However, some variation exists. AANZFTA, in addition to incorporating GATS art XIV,^[166] adds an exception (subject to chapeau type language) for ‘measures necessary to protect national treasures or specific sites of historical or archaeological value, or measures necessary to support creative arts of national value’.^[167] A footnote defines ‘creative arts’ broadly to include ‘the performing arts’, ‘visual arts and craft, literature, film and video, language arts, creative on line content, indigenous traditional practice and contemporary cultural expression, and digital interactive media and hybrid art work’, among other details.^[168] The reference to ‘national treasures’ is reminiscent of GATT art XX(f), which refers to measures ‘imposed for the protection of national treasures of artistic, historic or archaeological value’.

While following the general structure of GATS art XIV, the ANZCERTA Services Protocol general exceptions add measures necessary ‘to prevent disorder or crime’^[169] or ‘to prevent unfair, deceptive, or misleading practices’^[170] (without such measures having to be necessary to secure compliance with laws relating to these matters). The general exceptions also incorporate a security exception^[171] and an exception regarding international agreements as noted below.

The ANZCERTA Services Protocol also adds a gloss to the national treatment obligation, which in retrospect appears something like the gloss that the WTO Appellate Body has added to the non-discrimination obligation in TBT Agreement art 2.1 (that is, a detrimental impact on imports that stems exclusively from a legitimate regulatory distinction is not discrimination contrary to art 2.1).^[172] The WTO Appellate Body has cited the absence of a general exceptions provision in the TBT Agreement corresponding to GATT art XX/GATS art XIV as one reason for introducing this gloss on TBT Agreement art 2.1^[173] and as a reason for not introducing it into the national treatment obligation in GATT art III:4 or the MFN obligation in GATT art I:1.^[174] The Appellate Body has adopted a similar approach, albeit in obiter dicta, in excluding regulatory distinctions and the TBT Agreement ‘gloss’ from both likeness and less favourable treatment under GATS arts II:1 (MFN) and XVII (national treatment).^[175]

Moving away from the Appellate Body approach to less favourable treatment under General Agreement on Tariffs and Trade 1994 and GATS, the ANZCERTA Services Protocol allows differential treatment provided that it ‘is no greater than that necessary for prudential, fiduciary, health and safety or consumer protection reasons’.^[176] That restriction operates in addition to, rather than in the place of, the general exceptions clause. An even broader exception applies under TAFTA, again in addition to the incorporation of GATS art XIV:^[177]

Nothing in this Chapter shall prevent a Party from maintaining and introducing measures to regulate service sectors within its territory, provided that such measures are applied on a non-discriminatory basis without the intention to nullify or impair the benefits accruing to the other Party under the terms of this Chapter.^[178]

More recently, in addition to the general exceptions provisions in SAFTA and the TPP, a footnote specifies that ‘whether treatment is accorded in “like circumstances”’ in relation to national treatment or MFN treatment ‘depends on the totality of the circumstances, including whether the relevant treatment distinguishes between services or service suppliers on the basis of legitimate public welfare objectives’.^[179] Rather than ‘doubling up’ on the general exceptions (as the Appellate Body’s reasoning might suggest), this kind of qualification acknowledges that legitimate policy objectives exist beyond those enumerated in GATS art XIV or the corresponding PTA provisions, and therefore that the general exceptions provisions may be insufficient to protect all legitimate regulation.

As regards taxation measures and taxation agreements (which are addressed in GATS art XIV(d)–(e)), Australia’s PTAs have different approaches to exceptions, in addition to the limitations on scope as discussed in Part II of this article. The ANZCERTA Services Protocol is distinct from the others as it does not apply to any taxation measures, as noted above. The other Australian PTAs do apply to taxation measures to some extent and therefore have a number of exceptions. Australia’s positive list PTAs (apart from the ANZCERTA Services Protocol and SAFTA) provide exceptions for existing non-conforming tax measures, the continuation or prompt renewal of such measures, and amendments to such measures that do not decrease the level of conformity.^[180] ACIFTA adds to these an exception for the adoption of a non-conforming tax measure that is substantially similar to an existing non-conforming tax measure of the other party.^[181] These PTAs and also SAFTA provide an exception of some kind for measures allowed under GATS art XIV(d) (without regard to its limitation to direct taxes): that is, measures aimed at ensuring the equitable or effective imposition or collection of taxes.^[182]

Most Australian PTAs contain an exception (often MFN specific) for double taxation agreements^[183] and/or a statement that double taxation agreements prevail to the extent of any inconsistency.^[184] More narrowly, TAFTA provides that the double taxation agreement between Australia and Thailand prevails to the extent of any inconsistency.^[185] More unusually, JAEPA specifies that the dispute settlement procedures provided under ch 19 do not apply to the national treatment provisions in the trade in services chapter with respect to a measure falling ‘within the scope of an international agreement between the Parties relating to the avoidance of double taxation’.^[186] Finally, in the TPP but not the SAFTA, an exception applies to taxation measures by Singapore that are not ‘more trade restrictive than necessary to address Singapore’s public policy objectives arising out of its specific constraints of space’.^[187]

GATS arts V and V bis provide exceptions from GATS obligations for economic integration agreements and labour markets integration agreements respectively, in a manner broadly comparable to GATT art XXIV (as discussed further below). These exceptions determine the GATS consistency of PTAs, as discussed in Part VI of this article below. Only some of Australia’s PTAs include exceptions that might be understood as corresponding in part to these GATS exceptions. For example, under ChAFTA, an MFN exception applies to differential treatment ‘in accordance with any free trade agreement or multilateral international agreement in force or signed prior to the date’ of ChAFTA’s entry into force.^[188] That description appears directed to PTAs (including those with an investment chapter) and the WTO agreements, but would not appear to cover a BIT. In contrast, Australia’s negative list PTAs include existing international agreements including BITs in their Annex II type NCM lists, as discussed above. The ANZCERTA Services Protocol includes as part of its general exceptions measures necessary ‘in pursuance of obligations under international agreements’,^[189] which could arguably provide an MFN exception for existing and even future agreements covering trade and/or investment as well as other kinds of agreements.

Some Australian PTAs provide an exception with respect to ‘actions authorised by the Dispute Settlement Body of the WTO’^[190] or (in the case of the TPP) ‘authorised by the Dispute Settlement Body of the WTO or ... taken as a result of a decision by a dispute settlement panel under a free trade agreement to which the Party taking action and the Party against which the action is taken are party’.^[191] Several Australian PTAs also contain more general provisions (not positive exceptions) regarding their relationship to other international agreements in general^[192] or particular kinds of agreements, such as the WTO agreements^[193] or multilateral environmental agreements.^[194]

VI WTO CONSISTENCY OF AUSTRALIA’S PTAS ON SERVICES

I have elsewhere raised questions about the GATS compatibility of the approach to international mobile roaming favoured as between Australia and New Zealand^[195] and now reflected in the TPP text.^[196] Those questions relate to an apparent MFN violation not clearly exempted under GATS or other PTAs. Similar questions could arise in relation to the various deviations from GATS in Australia’s PTAs as outlined in this article. In order to comply with Australia’s GATS obligations, any treatment Australia provides under a PTA that is more favourable than treatment accorded under GATS must fall within the parameters of the exception for economic integration in GATS art V or for labour markets integration agreements in GATS art V bis (or conceivably a general exception in GATS art XIV). Otherwise, the more favourable treatment is likely to violate the MFN obligation in GATS art II, which is a negative list obligation. Australia has listed an MFN exemption only with respect to audiovisual services^[197] and not more generally (or with respect to its BITs).^[198]

Notwithstanding the apparent reluctance of WTO members to raise complaints under the WTO dispute settlement system regarding PTAs, a third country could conceivably invoke the MFN rule to demand the more favourable treatment under a PTA to the extent that it falls outside the GATS exceptions. Such a claim would be enhanced by the WTO Appellate Body’s stringent interpretation of the corresponding exception for PTAs in GATT art XXIV.^[199] Based on the Appellate Body Report in Turkey — Restrictions on Imports of Textile and Clothing Products (‘Turkey — Textiles’) (with respect to GATT art XXIV:1), more favourable treatment might be exempted under GATS art V:1 only if introduced at the formation of the relevant PTA and if necessary for that formation.^[200] In addition, GATS art V:4 (similarly to GATT art XXIV:5) specifies that an agreement exempt under GATS art V: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 subsectors compared to the level applicable prior to such an agreement.

Furthermore, any less favourable treatment under Australia’s PTAs than under GATS^[201] (or even under other PTAs)^[202] may also raise concerns regarding GATS compatibility. For example, an NCM that is listed under a PTA but not under GATS might not comply with GATS. As discussed above, while some Australian PTAs (eg the 2016 amendments agreed to SAFTA and the TPP) define certain NCMs with reference to GATS obligations,^[203] others such as the AUSFTA include NCMs lists that are not explicitly restricted by GATS compatibility.^[204] The coverage of the MFN obligation in the ANZCERTA Services Protocol has reduced in some respects over time, as discussed in Part IVA of this article. Some Australian FTAs do not even contain an MFN obligation, as illustrated in Table 1 above. Several Australian FTAs contain sweeping reservations with respect to other agreements including other PTAs, as noted earlier.^[205] As explained in Part V of this article, AANZFTA and the ANZCERTA Services Protocol add to the list of general exceptions recognised in GATS art XIV.

All these reductions in the levels of preferential treatment in Australia’s PTAs risk undermining Australia’s reliance on GATS art V:1, which exempts a PTA provided that it:

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 [payments and transfers], XII [restrictions to safeguard the balance of payments], XIV [general exceptions] and XIVbis [security exceptions].^[206]

Just as a third country might use GATS plus or GATS minus provisions to challenge an Australian PTA’s compliance with GATS art V:1, so too might one of Australia’s PTA partners use the WTO dispute settlement system to enforce compliance with GATS commitments notwithstanding their relaxation in the relevant PTA. The Appellate Body in Peru — Additional Duty on Imports of Certain Agricultural Products took a restrictive approach to inter se agreements between WTO Members (modifying their WTO obligations as between themselves). The Appellate Body noted the conditions specified in Turkey — Textiles^[207] and stated that the references in GATT art XXIV:4 ‘to facilitating trade and closer integration are not consistent with an interpretation of Article XXIV as a broad defence for measures in FTAs that roll back on Members’ rights and obligations under the WTO covered agreements’.^[208] That sentiment would seem even more applicable to the GATS, which refers in several places to progressive liberalisation of services,^[209] including in the preamble, as noted at the start of this article.

VII CONCLUSION

The analysis of Australia’s services PTAs in this article makes clear the different mechanisms that Australia has used to preserve regulatory autonomy with respect to trade in services. These include: excluding areas from the scope of the core services chapter (in particular government procurement, taxation, subsidies, and the exercise of governmental authority); limiting the content of core obligations, such as through changing ‘hard’ obligations to ‘best endeavours’ type obligations with respect to domestic regulation, and explicitly recognising a right to regulate in this regard; listing limitations to commitments in positive list PTAs and NCMs in negative list PTAs (whether in Annex I (subject to standstill and ratchet requirements) or Annex II (providing more flexibility for future regulatory change) or their equivalents); and incorporating general exceptions in both positive and negative list PTAs, whether or not such exceptions overlap with limitations on commitments or specified NCMs. Social services in general, including health and education services, are well protected in both positive list PTAs (as conditions on obligations) and negative list PTAs (as NCMs). NCMs in Australia’s modern PTAs extend specifically to regional regulation, indigenous peoples, culture, tobacco, alcohol, firearms, gambling, foreign investment policy, Qantas, CSL, and Telstra. Exceptions now tend to apply to other pre-existing international agreements, for example allowing what might otherwise amount to MFN violations to the extent reflected in a PTA (or, in some but not all cases, a BIT).

Australia’s apparent preference for negative list services PTAs may assist in enhancing transparency and the potential for increasing liberalisation, particularly in relation to new services and new technologies. However, that potential may be undermined by overuse of the tools just mentioned (exclusion of large areas from the scope of services chapters, general exceptions overlaid with specific NCMs, and weakening of obligations with reference to best endeavours). An increasing focus on ‘policy space’ also risks potential conflicts with Australia’s WTO obligations under the GATS. The value of a negative list may also be diluted if the two parties adopt different approaches, as in ChAFTA. Similarly, the use of a hybrid approach in TiSA (to accommodate the preferences of other negotiating parties) may not be ideal (although it has arguably worked in the GATS). Structural problems may be avoided by ensuring separate annexes are used instead of using the same annex to list both exemptions for a negative list obligation and inscriptions for a positive list obligation (as in the ANZCERTA Services Protocol). Just as the GATS and the AUSFTA appeared to provide a focal point for Australia’s services PTAs, the TPP may be set to do the same, and subsequently the TiSA. Given the compromises made by Australia in these negotiations, the TiSA hybrid listing approach should not be automatically applied to future Australian PTAs; nor the substantive services provisions of the TPP and TiSA without considered reflection on a case by case basis (particularly given the withdrawal of the US from the TPP).

This article has briefly addressed investment issues in the context of their treatment in Australia’s services PTAs. The overlap between services and investment is a crucial aspect of Australia’s trade and investment framework, which must be carefully resolved, for example by removing mode 3 services from the core services chapter, as under the TPP, or otherwise through exceptions and NCMs or similar mechanisms. However, the precise mechanism used will be important. Allowing the investment chapter to do all the work once done by GATS with respect to mode 3 services may provide clarity but will also make the content of the investment chapter all the more significant, including as regards ISDS. The investment chapter may be less well equipped to preserve regulatory autonomy than the services chapter in Australia’s PTAs. For example, not all Australian PTAs and BITs include general exceptions akin to GATT art XX/GATS art XIV, whereas Australia’s PTAs do all include general exceptions of this kind with respect to trade in services.^[210] These exceptions may be particularly important in relation to matters that arise in the future and are not specified in footnotes or NCMs because they do not yet exist.

^[*] PhD (Cambridge); LLM (Harvard); Grad Dip Intl L, LLB (Hons), BSc (Melbourne); AMusA; Professor, Melbourne Law School, University of Melbourne; Email tania.voon@unimelb.edu.au. Parts of this article are scheduled for publication in ch 3 of Andrew D Mitchell, Elizabeth Sheargold and Tania Voon, Regulatory Autonomy in International Economic Law: The Evolution of Australian Policy on Trade and Investment (Edward Elgar, 2017). This article forms part of independent research funded by the Australian Research Council pursuant to the Discovery Project scheme (project ID DP130100838). For helpful comments on earlier drafts I thank Rudolf Adlung, Andrew D Mitchell, Peter Gallagher, Elizabeth Sheargold, Ana María Palacio Valencia, and the two anonymous referees, and for research assistance I thank Pei Xuan Liu. This article expresses my personal opinions as an academic. Any errors or omissions are mine.

^[1] Brian Copeland and Aaditya Mattoo, ‘The Basic Economics of Services Trade’ in Aaditya Mattoo, Robert M Stern and Gianni Zanini (eds), A Handbook of International Trade in Services (Oxford University Press, 2008) 84, 128.

^[3] Markus Krajewski, ‘Domestic Regulation and Services Trade: Lessons from Regional and Bilateral Free Trade Agreements’ in Pierre Sauvé and Martin Roy (eds), Research Handbook on Trade in Services (Edward Elgar, 2016) 216, 216. See also Aaditya Mattoo and Pierre Sauvé, ‘The Preferential Liberalization of Services Trade: Economic Insights’ in Pierre Sauvé and Anirudh Shingal (eds), The Preferential Liberalization of Trade in Services: Comparative Regionalism (Edward Elgar, 2014) 37, 45.

^[4] Marrakesh Agreement Establishing the World Trade Organization, opened for signature 15 April 1994, 1867 UNTS 3 (entered into force 1 January 1995) annex 1B (‘General Agreement on Trade in Services’) (‘GATS’).

^[5] Jan Wouters and Dominic Coppens, ‘GATS and Domestic Regulation: Balancing the Right to Regulate and Trade Liberalization’ in Kern Alexander and Mads Andenas (eds), The World Trade Organization and Trade in Services (Martinus Nijhoff, 2008) 207, 210.

^[7] Bregt Natens, Regulatory Autonomy and International Trade in Services: The EU under GATS and RTAs (Edward Elgar, 2016) 12.

^[8] Ibid 7. See also International Monetary Fund (‘IMF’), ‘World Bank and WTO, Making Trade an Engine of Growth for All: The Case for Trade and for Policies to Facilitate Adjustment’ (Policy Paper, IMF, World Bank and WTO, 23–24 March 2017) [70].

^[12] Protocol on Trade in Services to the Australia New Zealand Closer Economic Relations-Trade Agreement, signed 18 August 1988, [1998] ATS 20 (entered into force 1 January 1989) (‘ANZCERTA Services Protocol’).

^[13] Australia–United States Free Trade Agreement, signed 18 May 2004, [2005] ATS 1 (entered into force 1 January 2005) (‘AUSFTA’).

^[14] Trans-Pacific Partnership, text released following legal review 26 January 2016, signed 4 February 2016, [2016] ATNIF 2 (not in force) (‘TPP’).

^[15] Singapore–Australia Free Trade Agreement, signed 17 February 2003, [2003] ATS 16 (entered into force 28 July 2003), as amended from 24 February 2006, 13 February 2007, 11 October 2007 and 2 September 2011 (‘SAFTA’); Agreement to Amend the Singapore–Australia Free Trade Agreement, signed 13 October 2016 (entered into force 1 December 2017) (‘SAFTA 2016’).

^[16] With respect to the low level of GATS commitments in health and social services, see Rudolf Adlung, ‘The GATS Negotiations: Implications for Health and Social Services’ (2003) 38 Intereconomics 147 (‘Social Services’).

^[17] GATS art XIII:1; Australia–Thailand Free Trade Agreement, signed 5 July 2004, [2004] ATS 2 (entered into force 1 January 2005) art 803.2(c) (‘TAFTA’); AUSFTA art 10.1.4(b); Australia–Chile Free Trade Agreement, signed 30 July 2008, [2009] ATS 6 (entered into force 6 March 2009) art 9.2.3(b) (‘ACIFTA’); Agreement Establishing the ASEAN–Australia–New Zealand Free Trade Area, signed 27 February 2009, [2010] ATS 1 (entered into force 1 January 2010), as amended by the First Protocol to Amend the Agreement Establishing the ASEAN–Australia–New Zealand Free Trade Area, signed 26 August 2014, [2015] ATS 14 (entered into force 1 October 2015) ch 8 art 1.4(a) (‘AANZFTA’); Malaysia–Australia Free Trade Agreement, signed 22 May 2012, [2013] ATS 4 (entered into force 1 January 2013) art 8.1.4(b) (‘MAFTA’); Korea–Australia Free Trade Agreement, signed 8 April 2014, [2014] ATS 43 (entered into force 12 December 2014) art 7.1.3(b) (‘KAFTA’); Agreement between Australia and Japan for an Economic Partnership, signed 8 July 2014, [2014] ATS 43 (entered into force 15 January 2015) art 9.1.2(b) (‘JAEPA’); Free Trade Agreement between the Government of Australia and the Government of the People’s Republic of China, signed 17 June 2015, [2015] ATS 15 (entered into force 20 December 2015) art 8.1.2(b) (‘ChAFTA’); TPP art 10.2.3(b); SAFTA 2016 ch 7 art 2.3(d).

^[18] GATS art I:3(b); TAFTA art 803.2(b); AUSFTA art 10.1.4(e); ACIFTA art 9.2.3(d); AANZFTA ch 8 art 1.4(c); MAFTA art 8.1.4(a); KAFTA art 7.1.5; JAEPA art 9.1.2(e); ChAFTA art 8.1.2(c); TPP art 10.2.3(c); SAFTA 2016 ch 7 art 2.3(c).

^[19] TAFTA art 803.2(a); AUSFTA art 10.1.4(d); ACIFTA art 9.2.3(c); AANZFTA ch 8 art 1.4(b); MAFTA art 8.1.4(c); KAFTA art 7.1.3(c); JAEPA art 9.1.2(c); ChAFTA art 8.1.2(d); TPP art 10.2.3(d); SAFTA 2016 ch 7 art 2.3(b).

^[21] See, eg, WTO, Trade in Services, Guidelines for the Scheduling of Specific Commitments under the General Agreement on Trade in Services (GATS), WTO Doc S/L/92 (28 March 2001) (Explanatory Note) [16] (‘Scheduling Guidelines’); Rudolf Adlung, ‘Export Policies and the General Agreement on Trade in Services’ (2015) 18 Journal of International Economic Law 487, 501; Markus Krajewski, ‘Public Services and Trade Liberalization: Mapping the Legal Framework’ (2003) 6 Journal of International Economic Law 341, 361. Australia also recognises the existence of national treatment disciplines for subsidies, for example by scheduling ‘unbound’ for research and development subsidies under mode 3: GATS, Australia: Schedule of Specific Commitments, WTO Doc GATS/SC/6 (15 April 1994) 2 (horizontal commitments).

^[24] TAFTA art 1607.1; AUSFTA art 22.3.1; ACIFTA art 22.3.1; AANZFTA ch 15 art 3.1; MAFTA art 18.3.1; KAFTA art 22.3.1; JAEPA art 1.8.1; ChAFTA art 16.4.2; TPP art 29.4.2; SAFTA 2016 ch 17 art 3.2.

^[25] AUSFTA art 22.3.4(a)–(b); ACIFTA art 22.3.4(a)–(b); KAFTA art 22.3.2(b)–(c); JAEPA art 1.8.2(c)–(d); TPP art 29.4.6(a)–(b).

^[28] AANZFTA ch 15 art 3.2(b)–(c); MAFTA art 18.3.2(b)–(c); SAFTA 2016 ch 17 art 3.3.

^[32] The negative list approach is effected through a general annex removing certain services from the scope of the agreement: ANZCERTA Services Protocol art 2.4: ‘Except as otherwise provided in particular Articles, this Protocol shall not apply to the provision within or into the territory of one Member State of the services inscribed by that Member State in the Annex until such time as such services inscribed by it have been removed from the Annex in accordance with Article 10 of this Protocol’.

^[36] Aaditya Mattoo and Pierre Sauvé, ‘Services’ in Jean-Pierre Chauffour and Jean-Christophe Maur (eds), Preferential Trade Agreement Policies for Development: A Handbook (World Bank, 2011) 235, 251; North American Free Trade Agreement, signed 17 December 1992, 32 ILM 289 (entered into force 1 January 1994).

^[39] AANZFTA provides for a consultative process in relation to most favoured nation (‘MFN’) treatment: ch 8 art 7.

^[40] AUSFTA arts 10.3, 10.6; ACIFTA arts 9.4, 9.7; KAFTA arts 7.3, 7.6; JAEPA arts 9.5, 9.7; TPP arts 10.4, 10.7.1, 10.7.2; SAFTA 2016 ch 7 arts 5, 7.1, 7.2.

^[41] AUSFTA arts 10.4, 10.6; ACIFTA arts 9.5, 9.7; KAFTA arts 7.4, 7.6; JAEPA arts 9.3, 9.7; TPP arts 10.5, 10.7.1, 10.7.2; SAFTA 2016 ch 7 arts 3, 7.1, 7.2.

^[42] AUSFTA arts 10.2, 10.6; ACIFTA arts 9.3, 9.7; KAFTA arts 7.2.1, 7.6; JAEPA arts 9.4.1, 9.7; TPP arts 10.3.1, 10.7.1, 10.7.2; SAFTA 2016 ch 7 arts 4, 7.1, 7.2.

^[47] Australian Government, Department of Foreign Affairs and Trade, Trade in Services Agreement (TiSA) Scheduling Approach <http://dfat.gov.au/trade/agreements/trade-in-services-agreement/Pages/tisa-scheduling-approach.aspx> , archived at <https://perma.cc/D4B2-QT23>; Wikileaks, Trade in Services Agreement Core Text (1 July 2015) 4 <https://wikileaks.org/tisa/core/>, archived at <https://perma.cc/TV3L-TGMT> (24 April 2015 draft text).

^[48] GATS art I:2(a): supply of a service ‘from the territory of one Member into the territory of any other Member’.

^[49] Ibid art I:2(b): supply of a service ‘in the territory of one Member to the service consumer of any other Member’.

^[50] Ibid art I:2(c): supply of a service ‘by a service supplier of one Member, through commercial presence in the territory of any other Member’.

^[51] Ibid art I:2(d): supply of a service ‘by a service supplier of one Member, through presence of natural persons of a Member in the territory of any other Member’.

^[52] TAFTA art 802(i); AANZFTA ch 8 art 2(s); MAFTA art 8.2(o); JAEPA art 9.2(n); ChAFTA art 8.2(x).

^[53] AUSFTA ch 10; ACIFTA ch 9; KAFTA ch 7; TPP ch 10; SAFTA 2016 ch 7.

^[54] AUSFTA art 10.14.1; ACIFTA art 9.1(d); KAFTA art 7.13; TPP art 10.1; SAFTA 2016 ch 7 art 1.

^[55] AUSFTA ch 12; MAFTA ch 9; ACIFTA ch 11; AANZFTA ch 8 annex on telecommunications; KAFTA ch 9; JAEPA ch 10; TPP ch 13; SAFTA ch 10. Cf ChAFTA art 8.19.

^[56] AUSFTA ch 13; MAFTA ch 8 annex on financial services; ACIFTA ch 12; AANZFTA ch 8 annex on financial services; KAFTA ch 8; JAEPA ch 11; ChAFTA annex 8–B; TPP ch 11; SAFTA ch 9.

^[57] TAFTA ch 11; AUSFTA ch 16; ACIFTA ch 16; AANZFTA ch 10; MAFTA ch 15; KAFTA ch 15; JAEPA ch 13; ChAFTA ch 12; SAFTA ch 14; TPP ch 14.

^[58] TAFTA ch 10; AANZFTA ch 9; MAFTA ch 10; KAFTA ch 10; JAEPA ch 12; ChAFTA ch 10; SAFTA ch 11. See also ACIFTA ch 13; TPP ch 12.

^[59] Presence of Natural Persons (Mode 4), WTO Doc S/C/W/301 (15 September 2009) (Background Note by the Secretariat) [74]; Regulatory Issues in Sectors and Modes of Supply, WTO Doc S/WPDR/W/48 (13 June 2012) (Note by the Secretariat) [282]–[283] (‘Regulatory Issues’).

^[60] AUSFTA art 10.5. See also ACIFTA art 9.6; KAFTA art 7.5; TPP art 10.6; SAFTA 2016 ch 7 art 6.

^[64] See generally Rudolf Adlung, ‘International Rules Governing Foreign Direct Investment in Services: Investment Treaties versus the GATS’ (2016) 17 Journal of World Investment & Trade 47; Martín Molinuevo, Protecting Investment in Services: Investor–State Arbitration versus WTO Dispute Settlement (Kluwer Law International, 2012).

^[65] Regulatory Issues, WTO Doc S/WPDR/W/48 (13 June 2012) [269]. See also United Nations Conference on Trade and Development, World Investment Report 2015: Reforming International Investment Governance, UN Doc UNCTAD/WIR/2015 (2015) 12.

^[67] Marrakesh Agreement Establishing the World Trade Organization, opened for signature 15 April 1994, 1867 UNTS 3 (entered into force 1 January 1995) annex 1A (‘Agreement on Trade-Related Investment Measures’) (‘TRIMS Agreement’).

^[72] TPP art 10.1 (definition of ‘cross border trade in services or cross border supply of services’).

^[73] Cf Comprehensive Economic Trade Agreement, European Union–Canada, signed 30 October 2016 (entered into force 21 September 2017) (‘CETA’) art 9.1: definition of ‘cross border trade in services or cross border supply of services’ to cover only modes 1 and 2. CETA has entered into force provisionally. See also the discussion in Natens, above n 7, 325.

^[75] Rudolf Adlung and Hamid Mamdouh, ‘How to Design Trade Agreements in Services: Top Down or Bottom-Up?’ (2014) 48 Journal of World Trade 191, 216. See also Tomer Broude and Shai Moses, ‘The Behavioural Dynamics of Positive and Negative Listing in Services Trade Liberalization: A Look at the Trade in Services Agreement (TiSA) Negotiations’ in Pierre Sauvé and Martin Roy (eds), Research Handbook on Trade in Services (Edward Elgar, 2016) 385, 411.

^[76] Broude and Moses, above n 75, 392, referring to Adlung and Mamdouh, above n 75.

^[79] Services Sectoral Classification List, WTO Doc MTN.GNS/W/120 (10 July 1991) (Note by the Secretariat) 4.

^[80] Appellate Body Report, China — Measures Affecting Trading Rights and Distribution Services for Certain Publications and Audiovisual Entertainment Products, WTO Doc WT/DS363/AB/R, AB-2009-3 (21 December 2009, adopted 19 January 2010) [396]–[397], [408] (‘China — Publications and Audiovisual Products’).

^[81] See Tania Voon, ‘Introductory Note to WTO Appellate Body Report: China – Measures Affecting Trading Rights and Distribution Services for Certain Publications and Audiovisual Entertainment Products’ (2010) 49 International Legal Materials 516, 517.

^[82] Mattoo and Sauvé, ‘Services’, above n 36, 252; Broude and Moses, above n 75, 398.

^[83] See Daniel Pruzin, ‘Punke Cites Positive Movement in Geneva Talks on Services, ITA’, International Trade Daily (online), 27 September 2012 <http://news.bna.com> , referring to the EU preference for a positive list; Broude and Moses, above n 75, 409, referring to the compromise proposed by the co-leaders Australia, the EU and the US.

^[86] See, eg, John H Jackson, The World Trading System: Law and Policy of International Economic Relations (MIT Press, 2^nd ed, 1997) 140.

^[91] See generally Andrew Mitchell and Tania Voon, ‘Reasonableness, Impartiality and Objectivity’ in Aik Hoe Lim and Bart De Meester (eds), WTO Domestic Regulation and Services Trade: Putting Principles into Practice (Cambridge University Press, 2014) 65.

^[92] Marrakesh Agreement Establishing the World Trade Organization, opened for signature 15 April 1994, 1867 UNTS 3 (entered into force 1 January 1995) annex 1A (‘General Agreement on Tariffs and Trade 1994’) art X:1.

^[95] ACIFTA 9.8.1; JAEPA art 9.8.1; TPP art 10.8.1; SAFTA ch 7 art 11.1.

^[102] As noted in Part III(A) above, in relation to services, ChAFTA adopts a positive list approach for China and a negative list approach for Australia. However, its domestic regulation provisions are the same for both parties and adopt the general model of Australia’s positive list PTAs.

^[103] GATS art VI:2(a).

^[104] TAFTA art 807; AANZFTA ch 8 art 12.2; JAEPA art 9.8.2; ChAFTA art 8.13.2(a).

^[105] AUSFTA art 20.5.1; ACIFTA art 19.6.1; MAFTA art 17.6.1; KAFTA art 19.4.1; TPP art 26.4.1.

^[106] SAFTA 2016 ch 7 art 11.2.

^[107] Ibid ch 7 art 7.3.

^[108] GATS art VI:3 (emphasis added).

^[109] AANZFTA ch 8 art 10.5; MAFTA art 8.9.5; ChAFTA art 8.13.3. See also TAFTA art 807.

^[110] AUSFTA art 10.7.1; KAFTA art 7.7.1.

^[111] ACIFTA art 9.8.3(b); JAEPA art 9.8.6(b).

^[112] ACIFTA art 9.8.3(b)(iv); JAEPA art 9.8.6(b)(v).

^[113] JAEPA art 9.8.6(b)(iii). See also JAEPA art 9.8.6(b)(iv).

^[114] TPP arts 10.8.4, 10.8.8; SAFTA 2016 ch 7 arts 7.3, 11.4.

^[115] TAFTA art 807; AANZFTA ch 8 arts 10.3, 10.4; MAFTA arts 8.9.3, 8.9.4, 8.9.6; ChAFTA arts 8.13.5, 8.13.6.

^[116] ACIFTA art 9.8.2.

^[117] AUSFTA art 10.7.2; KAFTA art 7.7.2; JAEPA art 9.8.4.

^[118] Marrakesh Agreement Establishing the World Trade Organization, opened for signature 15 April 1994, 1867 UNTS 3 (entered into force 1 January 1995) annex 1A (‘Agreement on Technical Barriers to Trade’) (‘TBT Agreement’); TPP art 10.8.2 (emphasis added). See also SAFTA 2016 ch 7 art 11.6.

^[119] TPP art 10.8.8; SAFTA 2016 ch 7 art 7.3.

^[120] TPP art 10.8.3; SAFTA 2016 ch 7 art 11.7.

^[121] In respect of accountancy, WTO members modified this obligation to a requirement that relevant measures be ‘not more trade restrictive than necessary to fulfil a legitimate objective’, aligning more closely with the language of TBT Agreement art 2.2 as discussed below: Disciplines on Domestic Regulation in the Accountancy Sector Adopted by the Council for Trade in Services on 14 December 1998, WTO Doc S/L/64 (17 December 1998, adopted 14 December 1998) [2].

^[122] Adlung, ‘Social Services’, above n 16, 148–9.

^[123] See generally Tania Voon, Andrew Mitchell and Catherine Gascoigne, ‘Consumer Information, Consumer Preferences and Product Labels under the TBT Agreement’ in Tracey Epps and Michael J Trebilcock (eds), Research Handbook on the WTO and Technical Barriers to Trade (Edward Elgar, 2013) 454.

^[124] ANZCERTA Services Protocol art 6, annex.

^[125] Ibid art 6.

^[126] Ibid art 2.4; annex: ‘Where an activity is described further, the exemption in terms of Article 2.4 of this Protocol applies to the description only’.

^[127] Letter from Andrew Robb, Minister for Trade and Investment, Australia to Tim Groser, Minister of Trade, New Zealand, 20 April 2015 <http://dfat.gov.au/trade/agreements/anzcerta/Documents/notification-letter-for-nz-on-cer-services-protocol.pdf> , archived at <https://perma.cc/Q3FS-NZ2G>.

^[128] ANZCERTA Services Protocol art 2.2.

^[129] TAFTA annex 8; AANZFTA annex 3; MAFTA annex 3.

^[130] SAFTA 2016 annex 4–II(A) (Australia) appendix A; TPP annex II (Australia) appendix A.

^[131] SAFTA 2016 annex 4–II(A) (Australia) 4 (emphasis added); TPP annex II (Australia) 4 (emphasis added).

^[132] SAFTA 2016 annex 4–II(A) (Australia) 4; TPP annex II (Australia) 4.

^[133] AUSFTA art 10.6 (emphasis added).

^[136] SAFTA 2016 annexes 4–I and 4–II broadly correspond with AUSFTA annexes I and II respectively.

^[137] AUSFTA annex II (Australia) 4.

^[138] SAFTA 2016 annex 4–II(A) (Australia) 8 n 6; TPP annex II (Australia) 8 n 6.

^[139] ChAFTA annex IIIB (Australia) 1038 n 25. See also JAEPA annex 7 (Australia) [2.8] n 6; SAFTA 2016 annex 4–II(A) (Australia) 8 n 7. See also TPP annex II (Australia) 8 n 7. A side letter applies under AUSFTA with respect to blood related products and services, which is focused on the government procurement chapter rather than the cross border trade in services chapter.

^[140] KAFTA annex II (Australia).

^[141] AUSFTA annex II (Australia).

^[142] Ibid annex II (Australia).

^[143] Ibid.

^[144] Ibid annex I (Australia).

^[145] SAFTA 2016 annex 4–II(A) (Australia) (footnotes omitted). See also TPP annex II (Australia).

^[146] SAFTA 2016 annex 4–II(A) (Australia). See also TPP annex II (Australia) 3.

^[147] SAFTA 2016 annex 4–I(A) (Australia).

^[148] Ibid annex 4–II(A) (Australia).

^[149] AUSFTA annex II (Australia).

^[150] SAFTA 2016 annex 4–II(A) (Australia) 18 n 18.

^[151] ACIFTA annex II (Australia).

^[152] KAFTA annex II (Australia).

^[153] JAEPA annex 7 (Australia).

^[154] ChAFTA annex III(B) (Australia).

^[155] TPP annex II (Australia) 19.

^[156] See, eg, AUSFTA annex I (Australia) 1, annex II (Australia) 2; KAFTA annex I (Australia) introductory note, annex II (Australia); JAEPA annex 6 (Australia) pt 1 s 1 [6], annex 7 (Australia) pt 1 s 2 [3]; ChAFTA annex IIIA (Australia) pt 1 s 1 introductory notes [3], annex IIIB (Australia) 1; TPP annex I (Australia) 2, annex II (Australia) 4. See also above nn 130–131 and corresponding text; SAFTA 2016 annex 4–I(A) (Australia) introductory notes [1], annex 4–II(A) (Australia) 4.

^[157] See, eg, KAFTA annex I (Australia); JAEPA annex 6 (Australia); ChAFTA annex III (Australia); TPP annex I (Australia); SAFTA 2016 annex 4–I (Australia).

^[158] See, eg, JAEPA annex 7 (Australia); TPP annex II (Australia) 15; SAFTA 2016 annex 4–II (Australia) 15.

^[159] See, eg, TAFTA art 1606 (Prudential Measures); ACIFTA art 12.8 (Treatment of Certain Information); MAFTA ch 8 annex on financial services art 7; ChAFTA ch 8 annex 8–B (Financial Services) art 3.

^[160] See, eg, SAFTA 2016 ch 10 art 18.

^[161] See, eg, TAFTA art 803.4.

^[162] GATS art XIV bis; ANZCERTA Services Protocol art 18(a); TAFTA art 1602; AUSFTA art 22.2; ACIFTA art 22.2; AANZFTA ch 15 art 2; MAFTA art 18.2; KAFTA art 22.2; JAEPA art 1.10; ChAFTA art 16.3; TPP art 29.2; SAFTA 2016 ch 17 art 2.

^[163] GATS art III bis; ANZCERTA Services Protocol art 13.3; TAFTA art 1603; AUSFTA art 22.4.1; ACIFTA art 22.5.2; AANZFTA ch 8 art 13; MAFTA art 21.4; KAFTA art 22.4; JAEPA art 1.7.2; ChAFTA art 16.1.1; TPP art 29.7; SAFTA 2016 ch 7 art 10.

^[164] GATS art XIV; ANZCERTA Services Protocol art 18; TAFTA art 1601.2; AUSFTA art 22.1.2; ACIFTA art 22.1.2; AANZFTA ch 15 art 1.2; MAFTA art 18.1.2; KAFTA art 22.1.2; JAEPA art 1.9.2; ChAFTA art 16.2.2; TPP art 29.1.3; SAFTA 2016 ch 7 art 16.

^[165] GATS art XIV (emphasis added) (footnotes omitted).

^[166] AANZFTA ch 15 art 1.2.

^[167] Ibid art 1.4.

^[168] Ibid ch 15 art 1 n 2.

^[169] ANZCERTA Services Protocol art 18(b).

^[170] Ibid art 18(d).

^[171] Ibid art 18(a).

^[172] See, eg, Appellate Body Report, United States — Measures Affecting the Production and Sale of Clove Cigarettes, WTO Doc WT/DS406/AB/R, AB-2012-1 (4 April 2012) [215].

^[173] See, eg, ibid [109].

^[174] Appellate Body Reports, European Communities — Measures Prohibiting the Importation and Marketing of Seal Products, WTO Docs WT/DS400/AB/R, WT/DS401/AB/R, AB-2014-1, AB-2014-2 (22 May 2014, adopted 18 June 2014) [5.125].

^[175] Appellate Body Report, Argentina — Measures Relating to Trade in Goods and Services, WTO Doc WT/DS453/AB/R, AB-2015-8 (14 April 2016, adopted 9 May 2016) [6.106], [6.111], [6.112], [6.115], [6.121].

^[176] ANZCERTA Services Protocol art 5.2(a).

^[177] TAFTA art 1601.2.

^[178] Ibid art 803.3.

^[179] TPP ch 10, 4 n 2; SAFTA 2016 ch 7, 4 n 3. A corresponding footnote appears in the investment chapters as well: TPP ch 9, 6 n 14; SAFTA 2016 ch 8, 5 n 8.

^[180] AUSFTA art 22.3.4(d)–(f); ACIFTA art 22.3.4(e)–(g); KAFTA art 22.3.3(b)–(d); JAEPA art 1.8.3(a)–(c); ChAFTA art 16.4.4(b); TPP art 29.4.6(e)–(g).

^[181] ACIFTA art 22.3.4(h).

^[182] Ibid art 22.3.4(i); AUSFTA art 22.3.4(g); KAFTA art 22.3.3(e); JAEPA art 1.8.3(d); ChAFTA art 16.4.4(c); TPP art 29.4.6(h); SAFTA ch 17 art 3.3.

^[183] AUSFTA art 22.3.4(c); ACIFTA art 22.3.4(d); AANZFTA ch 15 art 3.6; MAFTA art 18.3.7; KAFTA art 22.3.3(a); ChAFTA art 16.4.4(a); TPP art 29.4.6(d).

^[184] AUSFTA art 22.3.2(a); ACIFTA art 22.3.2; AANZFTA ch 15 art 3.5; MAFTA art 18.3.4; KAFTA art 22.3.6; JAEPA art 1.8.4; ChAFTA art 16.4.5; TPP art 29.4.3; SAFTA 2016 ch 17 art 3.4.

^[185] TAFTA art 1607.3.

^[186] JAEPA art 9.4.2.

^[187] TPP art 29.4.9.

^[188] ChAFTA arts 8.7.2, 8.12.2. See also AANZFTA ch 8 arts 7.2, 7.4.

^[189] ANZCERTA Services Protocol art 18(e).

^[190] KAFTA art 22.1.4; ACIFTA art 22.1.3.

^[191] TPP art 29.1.4.

^[192] See, eg, AUSFTA art 1.1.2; AANZFTA ch 18 art 2; MAFTA art 21.2.

^[193] See, eg, AUSFTA art 1.1.2; AANZFTA ch 18 art 2; MAFTA art 21.2.

^[194] See, eg, AUSFTA art 19.8.

^[195] Tania Voon, ‘Discrimination in International Mobile Roaming Regulation: Implications of WTO Law’ (2013) 16 Journal of International Economic Law 91, 116–17.

^[196] Danny Kotlowitz and Tania Voon, ‘Telecommunications Services in the Trans-Pacific Partnership: Will the Mobile Roaming Provisions Benefit Tourists and Traders?’ [2016] MelbJlIntLaw 17; (2016) 17 Melbourne Journal of International Law 404, 435–7; Danny Kotlowitz and Tania Voon, ‘Services in the TPP: A Case Study of Telecommunications’ in Tania Voon (ed), Trade Liberalisation and International Co-operation: A Legal Analysis of the Trans-Pacific Partnership Agreement (Edward Elgar, 2013) 131, 152–4.

^[197] Australia: Final List of Article II (MFN) Exemptions, WTO Doc GATS/EL/6 (15 April 1994); Australia: List of Article II (MFN) Exceptions Supplement 1, WTO Doc GATS/EL/6/Suppl.1 (26 February 1998).

^[198] See, eg, United States of America: Final List of Article II (MFN) Exemptions, WTO Doc GATS/EL/90 (15 April 1994) 1. See also Rudolf Adlung, ‘Trade in Healthcare and Health Insurance Services: WTO/GATS as a Supporting Actor (?)’ (2010) 45 Intereconomics 227, 237 (‘Trade in Healthcare’).

^[199] See generally Andrew D Mitchell and Nicolas JS Lockhart, ‘Legal Requirements for PTAs under the WTO’ in Simon Lester, Bryan Mercurio and Lorand Bartels (eds), Bilateral and Regional Trade Agreements: Commentary and Analysis (Cambridge University Press, 2015) 81.

^[200] Appellate Body Report, Turkey — Restrictions on Imports of Textile and Clothing Products, WTO Doc WT/DS34/AB/R, AB-1999-5 (22 October 1999, adopted 19 November 1999) [46], [58] (‘Turkey — Textiles’). See also Rudolf Adlung, ‘The Trade in Services Agreement (TiSA) and Its Compatibility with GATS: An Assessment Based on Current Evidence’ (2015) 14 World Trade Review 617, 623 (‘The Trade in Services Agreement’).

^[201] See generally Rudolf Adlung and Sébastien Miroudot, ‘Poison in the Wine? Tracing GATS-Minus Commitments in Regional Trade Agreements’ (2012) 46 Journal of World Trade 1045.

^[202] See Adlung, ‘The Trade in Services Agreement’, above n 200, 622–4.

^[203] See above n 130 and corresponding text.

^[204] See above n 133 and corresponding text.

^[205] See above nn 148–155 and corresponding text.

^[206] GATS art V:1 (footnotes omitted).

^[207] Appellate Body Report, Peru — Additional Duty on Imports of Certain Agricultural Products, WTO Doc WT/DS457/AB/R, AB-2015-3 (20 July 2015, adopted 31 July 2015) [5.115] (‘Peru — Agricultural Products’).

^[208] Ibid [5.116] (emphasis added).

^[209] See, eg, GATS art XIX:1.

^[210] See generally Adlung, ‘Trade in Healthcare’, above n 198.

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URL: http://www.austlii.edu.au/au/journals/MelbJlIntLaw/2017/17.html

	reasonable, objective, impartial administration	judicial, arbitral or administrative tribunals or procedures	procedures regarding application for authorisation to supply service	criteria regarding qualification requirements and procedures, technical standards and licensing requirements
Positive lists for market access and national treatment:
ANZCERTA Services Protocol	✗	✗	✗	✗
GATS	where specific commitments made	✓	where specific commitments made	where specific commitments made
TAFTA
AANZFTA
MAFTA		in transparency chapter
ChAFTA^[102]		✓
Negative lists for market access and national treatment:
AUSFTA	in transparency, telecommunications and financial services chapters	in transparency chapter	subject to NCMs in annex II	endeavour only
ACIFTA	✓		✓	✓
KAFTA	in transparency chapter		subject to NCMs in annex II	endeavour only
JAEPA	✓	✓	✓	✓
TPP	subject to NCMs in both annexes	in transparency chapter	subject to NCMs in both annexes	endeavour only; subject to NCMs in both annexes
SAFTA 2016	subject to NCMs in both annexes	subject to NCMs in annexes 4–I/II	subject to NCMs in both annexes	endeavour only; subject to NCMs in both annexes

	18 August 1988	9 March 1999	20 April 2015
MFN coverage (* indicates limitations and conditions on MFN/national treatment/market access)	• Telecommunications* • Banking* • Airport services* • Domestic air services* • International aviation: passenger and freight services* • Coastal shipping* • Construction, engineering and general consultancy* • Broadcasting and television* • Broadcasting and television (short-wave and satellite broadcasting) • Basic health insurance services • Third-party insurance • Workers Compensation insurance • Postal services*	• Air services* • Coastal shipping* • Broadcasting and television* • Broadcasting and television (short-wave and satellite broadcasting) • Third party insurance* • Postal services*	• Air services* • Coastal shipping* • Broadcasting and television (short-wave and satellite broadcasting) • Third party insurance* • Postal services*

	Social services incl health, education	Tobacco, alcohol, firearms (wholesale/retail)	Culture (incl broadc-asting, newspa-pers)	Indigenous persons	Foreign investment policy	Existing international agreements
AUSFTA	Annex I/II	Annex II	Annex I/II	Annex II	Annex I/II	Annex II
ACIFTA	Annex I/II	Annex I	Annex II	Annex II	Annex I/II	Annex II
KAFTA	Annex I/II	Annex I/II	Annex II	Annex II	Annex I/II	Annex II
JAEPA^[134]	Annex 6/7	Annex 6/7	Annex 7	Annex 7	Annex 6/7	Annex 7
ChAFTA^[135]	Annex IIIA/B	Annex IIIA/B	Annex IIIB	Annex IIIB	Annex IIIA/B	Annex IIIB
TPP	Annex I/II	Annex II	Annex II	Annex II	Annex I/II	Annex II
SAFTA 2016^[136]	Annex 4–I/ 4–II	Annex 4–I/4–II	Annex 4–I/ 4–II	Annex 4–II	Annex 4–I/ 4–II	Annex 4–II

Melbourne Journal of International Law