CHAPTER 10

CROSS-BORDER TRADE IN SERVICES

Article 10.1: Definitions

For the purposes of this Chapter:

airport operation services means the supply of air terminal, airfield and other airport infrastructure operation services on a fee or contract basis.   Airport operation services do not include air navigation services;

computer reservation system services means services provided by computerised systems that contain information about air carriers’ schedules, availability, fares and fare rules, through which reservations can be made or tickets may be issued;

cross-border trade in services or cross-border supply of services means the supply of a service:

 (a)       from the territory of a Party into the territory of another Party; (b)       in the territory of a Party to a person of another Party; or

(c)       by a national of a Party in the territory of another Party,

but does not include the supply of a service in the territory of a Party by a covered investment;

enterprise means an enterprise as defined in Article 1.3 (General Definitions), and a branch of an enterprise;

enterprise of a Party means an enterprise constituted or organised under the laws of a Party, or a branch located in the territory of a Party and carrying out business activities there;

ground handling services means the supply at an airport, on a fee or contract basis, of the following services: airline representation, administration and supervision;  passenger  handling;  baggage  handling;  ramp  services;  catering, except the preparation of the food; air cargo and mail handling; fuelling of an aircraft; aircraft servicing and cleaning; surface transport; and flight operations, crew  administration  and  flight  planning.    Ground  handling  services  do  not include: self-handling; security; line maintenance; aircraft repair and maintenance; or management or operation of essential centralised airport infrastructure, such as

de-icing facilities, fuel distribution systems, baggage handling systems and fixed intra-airport transport systems;

measures adopted or maintained by a Party means measures adopted or maintained by:

 (a)       central, regional, or local governments or authorities; or

 (b)       non-governmental bodies in the exercise of powers delegated by central, regional, or local governments or authorities;

selling and marketing of air transport services means opportunities for the air carrier concerned to sell and market freely its air transport services including all aspects of marketing such as market research, advertising and distribution.  These activities do not include the pricing of air transport services or the applicable conditions;

service supplied in the exercise of governmental authority means, for each Party,  any  service  that  is  supplied  neither  on  a  commercial  basis  nor  in competition with one or more service suppliers;

service supplier of a Party means a person of a Party that seeks to supply or supplies a service; and

specialty air services means any specialised commercial operation using an aircraft whose primary purpose is not the transportation of goods or passengers, such as aerial fire-fighting, flight training, sightseeing, spraying, surveying, mapping, photography, parachute jumping, glider towing, and helicopter-lift for logging and construction, and other airborne agricultural, industrial and inspection services.

Article 10.2: Scope

1.         This Chapter shall apply to measures adopted or maintained by a Party affecting cross-border trade in services by service suppliers of another Party. Such measures include measures affecting:

 (a)       the  production,  distribution,  marketing,  sale  or  delivery  of  a service;

 (b)       the purchase or use of, or payment for, a service;

 (c)    the  access  to  and  use  of  distribution,  transport  or telecommunications networks and services in connection with the supply of a service;

(d)       the presence in the Party’s territory of a service supplier of another

Party; and

 (e)       the provision of a bond or other form of financial security as a condition for the supply of a service.

2.         In addition to paragraph 1:

 (a)       Article 10.5 (Market Access), Article 10.8 (Domestic Regulation) and Article 10.11 (Transparency) shall also apply to measures adopted or maintained by a Party affecting the supply of a service in its territory by a covered investment1; and

 (b)       Annex  10-B  (Express  Delivery  Services)  shall  also  apply  to measures adopted or maintained by a Party affecting the supply of express delivery services, including by a covered investment.

3.         This Chapter shall not apply to:

 (a)       financial services as defined in Article 11.1 (Definitions), except that paragraph 2(a) shall apply if the financial service is supplied by a covered investment that is not a covered  investment in a financial institution as defined in Article 11.1 (Definitions) in the Party’s territory;

 (b)       government procurement;

 (c)       services supplied in the exercise of governmental authority; or

 (d)       subsidies or grants provided by a Party, including government- supported loans, guarantees and insurance.

4.         This Chapter does not impose any obligation on a Party with respect to a national of another Party who seeks access to its employment market or who is employed on a permanent basis in its territory, and does not confer any right on that national with respect to that access or employment.

5.       This Chapter shall not apply to air services, including domestic and international air transportation services, whether scheduled or non-scheduled, or to related services in support of air services, other than the following:

(a)       aircraft repair and maintenance services during which an aircraft is withdrawn from service, excluding so-called line maintenance;

1   For greater certainty, nothing in this Chapter, including Annexes 10-A (Professional Services),

10-B (Express Delivery Services), and 10-C (Non-Conforming Measures Ratchet Mechanism), is subject to investor-State dispute settlement pursuant to Section B of Chapter 9 (Investment).

(b)       selling and marketing of air transport services; (c)       computer reservation system services;

(d)       specialty air services;

 (e)       airport operation services; and

 (f)        ground handling services.

6.         In the event of any inconsistency between this Chapter and a bilateral, plurilateral or multilateral air services agreement to which two or more Parties are party, the air services agreement shall prevail in determining the rights and obligations of those Parties that are party to that air services agreement.

7.         If two or more Parties have the same obligations under this Agreement and a bilateral, plurilateral or multilateral air services agreement, those Parties may invoke the dispute settlement procedures of this Agreement only after any dispute settlement procedures in the other agreement have been exhausted.

8.         If the Annex on Air Transport Services of GATS is amended, the Parties shall jointly review any new definitions with a view to aligning the definitions in this Agreement with those definitions, as appropriate.

Article 10.3: National Treatment2

1.         Each Party shall accord to services and service suppliers of another Party treatment no less favourable than that it accords, in like circumstances, to its own services and service suppliers.

2.         For  greater  certainty,  the  treatment  to  be  accorded  by  a  Party  under paragraph 1 means, with respect to a regional level of government, treatment no less   favourable   than   the   most   favourable   treatment   accorded,   in   like circumstances, by that regional level of government to service suppliers of the Party of which it forms a part.

Article 10.4: Most-Favoured-Nation Treatment

Each Party shall accord to services and service suppliers of another Party treatment no less favourable than that it accords, in like circumstances, to services and service suppliers of any other Party or a non-Party.

2   For greater certainty, whether treatment is accorded in “like circumstances” under Article 10.3 (National Treatment) or Article 10.4 (Most-Favoured-Nation 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.

Article 10.5: Market Access

No Party shall adopt or maintain, either on the basis of a regional subdivision or on the basis of its entire territory, measures that:

 (a)       impose limitations on:

 (i)        the number of service suppliers, whether in the form of numerical quotas, monopolies, exclusive service suppliers or the requirement of an economic needs test;

 (ii)       the total value of service transactions or assets in the form of  numerical  quotas  or  the  requirement  of  an  economic needs test;

 (iii)     the total number of service operations or the total quantity of   service   output   expressed   in   terms   of   designated numerical units in the form of quotas or the requirement of an economic needs test;3 or

 (iv)      the total number of natural persons that may be employed in a particular service sector or that a service supplier may employ and who are necessary for, and directly related to, the supply of a specific service in the form of numerical quotas or the requirement of an economic needs test; or

 (b)       restrict or require specific types of legal entity or joint venture through which a service supplier may supply a service.

Article 10.6: Local Presence

No Party shall require a service supplier of another 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.

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