Domestic Regulation in The United States Free Trade Agreements

This document contains the select provisions on
Domestic Regulation in the United States Free

Trade Agreements. The provisions contained
herein are arranged country wise,
alphabetically.
Provisions on
Domestic
Regulation in the
cross-border Trade
in Services
US Free Trade
Agreements
Mentor – Ms. Shiny Pradeep
Shrey Apoorva
Table of Contents
 US – AUSTRALIA FTA..................................................................................................................... 3
ARTICLE 10.7: DOMESTIC REGULATION...................................................................................................3
Annex 10-A: Professional Services................................................................................................................3
Development Of Professional Services.....................................................................................................................3
 US – BAHRAIN FTA......................................................................................................................... 4
ARTICLE 10.7: DOMESTIC REGULATION.................................................................................................5
Annex 10-B Professional Services.................................................................................................................5
 USMCA.............................................................................................................................................. 6
ARTICLE 15.8: DEVELOPMENT AND ADMINISTRATION OF MEASURES..............................................................7
Annex 15-A Delivery Services......................................................................................................................10
Annex 15-B: Committee On Transportation Services..................................................................................10
Annex 15-C: Professional Services..............................................................................................................10
Appendix 1: Guidelines For Mutual Recognition Agreements Or Arrangements For The Professional Services
Sector...................................................................................................................................................................... 10
Annex 15-D: Programming Services...........................................................................................................14
Annex 15-E: Mexico’s Cultural Exceptions.................................................................................................15
Annex I:..................................................................................................................................................................15
Annex II:.................................................................................................................................................................16
 US – CHILE FTA............................................................................................................................. 16
ARTICLE 11.8: DOMESTIC REGULATION..........................................................................................................16
Annex 11.9: Professional Services...............................................................................................................17
Section A - General Provisions...............................................................................................................................17
Section B - Foreign Legal Consultants....................................................................................................................18
Section C - Temporary Licensing of Engineers.......................................................................................................19
 US – COLUMBIA FTA.................................................................................................................... 19
Annex 11-B: Professional Services..............................................................................................................20
Development of Professional Services Standards....................................................................................................20
Temporary Licensing of Engineers.........................................................................................................................21
Annex 11-D: Express Delivery Services......................................................................................................22
Annex 11-E...................................................................................................................................................22
 CAFTA-DR (DOMINICAN REPUBLIC-CENTRAL AMERICA FTA)..........................................24
ARTICLE 11.13: SPECIFIC COMMITMENTS.......................................................................................................25
Express Delivery Services:...........................................................................................................................25
Annex 11.9: Professional Services...............................................................................................................26
Development of Professional Standards..................................................................................................................26
Annex 11.13: Specific Commitments............................................................................................................27
Section A: Costa Rica.............................................................................................................................................27
Section B: The Dominican Republic.......................................................................................................................28
Section C: El Salvador............................................................................................................................................30
Section D: Guatemala.............................................................................................................................................31
Section E: Honduras................................................................................................................................................32
 US – ISRAEL FTA........................................................................................................................... 34
IFTA DECLARATION ON TRADE IN SERVICES.................................................................................................34
 US – KOREA FTA........................................................................................................................... 35
ARTICLE 12.7: DOMESTIC REGULATION.................................................................................................35
 US – MOROCCO FTA..................................................................................................................... 36
ARTICLE 11.7: DOMESTIC REGULATION...............................................................................................36
Annex 11-B: Professional Services..............................................................................................................37
Development Of Professional Standards.................................................................................................................37
 US – OMAN FTA............................................................................................................................. 38
ARTICLE 11.7: DOMESTIC REGULATION...............................................................................................38
Annex 11.9 Professional Services................................................................................................................39
Development of Professional Services....................................................................................................................39
Annex 11.12 Specific Commitments.............................................................................................................40
 US – PANAMA FTA......................................................................................................................... 40
Annex 11.9 Professional Services................................................................................................................41
Development of Professional Standards..................................................................................................................41
 US – PERU FTA............................................................................................................................... 42
Annex 11-B Professional Services...............................................................................................................43
Development of Professional Services Standards....................................................................................................43
Temporary Licensing of Engineers.........................................................................................................................44
 US – SINGAPORE FTA................................................................................................................... 45
ARTICLE 8.8 : DOMESTIC REGULATION................................................................................................45
 US – Australia FTA
ARTICLE 10.7: DOMESTIC REGULATION
1. Where a Party requires authorization for the supply of a service, the Party’s competent
authorities shall, within a reasonable time after the submission of an application considered
complete under its laws and regulations, inform the applicant of the decision concerning the
application. At the request of the applicant, the competent authorities of the Party shall
provide, without undue delay, information concerning the status of the application. This
obligation shall not apply to authorization requirements that a Party adopts or maintains with
respect to sectors, sub-sectors, or activities as set out in its Schedule to Annex II.
2. 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, each Party shall endeavour to ensure, as appropriate for
individual sectors, that such measures are:
(a) based on objective and transparent criteria, such as competence and the ability to
supply the service;
(b) not more burdensome than necessary to ensure the quality of the service; and
(c) in the case of licensing procedures, not in themselves a restriction on the supply
of the service.
3. If the results of the negotiations related to Article VI:4 of GATS (or the results of any
similar negotiations undertaken in other multilateral fora in which both Parties participate)
enter into effect, this Article shall be amended, as appropriate, after consultations between the
Parties, to bring those results into effect under this Agreement. The Parties shall coordinate
on such negotiations, as appropriate.
Annex 10-A: Professional Services
Development Of Professional Services
1. The Parties shall encourage the relevant bodies in their respective territories to develop
mutually acceptable standards and criteria for licensing and certification of professional
services suppliers and to provide recommendations on mutual recognition to the Joint
Committee.
2. The standards and criteria referred to in paragraph 1 may be developed with regard to the
following matters:
(a) education – accreditation of schools or academic programs;
(b) examinations – qualifying examinations for licensing, including alternative

methods of assessment, such as oral examinations and interviews;
(c) experience – length and nature of experience required for licensing;
(d) conduct and ethics – standards of professional conduct and the nature of
disciplinary action for non-conformity with those standards;
(e) professional development and re-certification – continuing education and ongoing

requirements to maintain professional certification;
(f) scope of practice – extent of, or limitations on, permissible activities;
(g) local knowledge – requirements for knowledge of such matters as local laws,
regulations, geography, or climate; and
(h) consumer protection – alternatives to residency requirements, including bonding,

professional liability insurance, and client restitution funds, to provide for the
protection of consumers.
TEMPORARY LICENSING
4. Where the Parties agree, each Party shall encourage the relevant bodies in its territory to
develop procedures for the temporary licensing of professional services suppliers of the other
Party.
 US – Bahrain FTA
authorities shall, within a reasonable period after the submission of an application considered
obligation shall not apply to authorization requirements that are within the scope of Article
10.6.2.

barriers to trade in services, each Party shall endeavor to ensure, as appropriate for individual
sectors, that such measures are:
supply the service;
of the service.
enter into effect for both Parties, this Article shall be amended, as appropriate, after
consultations between the Parties, to bring those results into effect under this Agreement. The
Parties agree to coordinate on such negotiations, as appropriate.
Annex 10-B Professional Services
Development of Professional Standards

service suppliers and to provide recommendations on mutual recognition to the Joint
Committee established under Chapter Eighteen (Administration of the Agreement).
following matters:
(a) education - accreditation of schools or academic programs;
(b) examinations - qualifying examinations for licensing;
(c) experience - length and nature of experience required for licensing;
(d) conduct and ethics - standards of professional conduct and the nature of
(e) professional development and re-certification - continuing education and ongoing

(f) scope of practice - extent of, or limitations on, permissible activities;
(g) local knowledge - requirements for knowledge of such matters as local laws,
regulations, language, geography, or climate; and
(h) consumer protection - including alternatives to residency requirements, such as

bonding, professional liability insurance, and client restitution funds, to provide for
the protection of consumers.
Temporary Licensing
develop procedures for the temporary licensing of professional service suppliers of the other
Party.
 USMCA
Article 15.8: Development and Administration of Measures
1. Each Party shall ensure that a measure of general application affecting trade in services is
administered in a reasonable, objective, and impartial manner.
2. If a Party adopts or maintains a measure relating to licensing requirements and procedures,

or qualification requirements and procedures, affecting trade in services, the Party shall, with
respect to that measure:
(a) ensure that the requirement or procedure is based on criteria that are objective and
transparent. For greater certainty, these criteria may include competence or ability to
supply a service, or potential health or environmental impacts of an authorization, and
competent authorities may assess the weight given to such criteria;
(b) ensure that the competent authority reaches and administers a decision in an
independent manner;
(c) ensure that the procedure does not in itself prevent fulfilment of a requirement;
and
(d) to the extent practicable, avoid requiring an applicant to approach more than one
competent authority for each application for authorization.
3. If a Party requires an authorization for the supply of a service, it shall ensure that each of
its competent authorities:
(a) to the extent practicable, permits an applicant to submit an application at any
time;
(b) if a specific time period for applications exists, allows a reasonable period for the
submission of an application;
(c) if an examination is required, schedules the examination at reasonably frequent
intervals and provides a reasonable period of time to enable an applicant to request to
take the examination;
(d) endeavors to accept an application electronically;
(e) to the extent practicable, provides an indicative timeframe for processing an
application;
(f) to the extent practicable, ascertains without undue delay the completeness of an
application for processing under the Party’s law;
(g) accepts copies of documents that are authenticated in accordance with the Party’s
law, in place of original documents, unless the competent authority requires original
documents to protect the integrity of the authorization process;
(h) at the request of the applicant, provides without undue delay information
concerning the status of the application;
(i) if an application is considered complete under the Party’s law, within a reasonable
period of time after the submission of the application, ensures that the processing of
the application is completed, and that the applicant is informed of the decision
concerning the application, to the extent possible in writing;5
(j) if an application is considered incomplete for processing under the Party’s law,
within a reasonable period of time, to the extent practicable:
(i) informs the applicant that the application is incomplete,
(ii) if the applicant requests, provides guidance on why the application is
considered incomplete,
(iii) provides the applicant with an opportunity to provide the additional

information that is required for the application to be considered complete, and
if none of the above is practicable, and the application is rejected due to
incompleteness, ensures that the applicant is informed of the rejection within a
reasonable period of time;
(k) if an application is rejected, to the extent possible, either upon its own initiative or
upon the request of the applicant, informs the applicant of the reasons for rejection
and, if applicable, the timeframe for an appeal or review of the decision to reject the
application and the procedures for resubmission of an application; and
(l) ensures that authorization, once granted, enters into effect without undue delay,
subject to the applicable terms and conditions.
4. Each Party shall ensure that any authorization fee charged by any of its competent
authorities is reasonable, transparent, and does not, in itself, restrict the supply of the relevant
service. For the purposes of this paragraph, an authorization fee does not include a fee for the
use of natural resources, payments for auction, tendering, or other non-discriminatory means
of awarding concessions, or mandated contributions to the provision of universal service.
5. Each Party shall encourage its competent authorities, when adopting a technical standard,
to adopt technical standards developed through an open and transparent process, and shall
encourage a body designated to develop a technical standard to use an open and transparent
process.
6. If a Party requires authorization for the supply of a service, the Party shall provide to a
service supplier or person seeking to supply a service the information necessary to comply
with requirements or procedures for obtaining, maintaining, amending, and renewing that
authorization. That information must include:
(a) any fee;
(b) the contact information of a relevant competent authority;
(c) any procedure for appeal or review of a decision concerning an application;
(d) any procedure for monitoring or enforcing compliance with the terms and
conditions of licenses;
(e) any opportunities for public involvement, such as through hearings or comments;
(f) any indicative timeframe for processing of an application;
(g) any requirement or procedure; and
(h) any technical standard.
7. Paragraphs 1 through 6 do not apply to the aspects of a measure set out in an entry to a
Party’s Schedule to Annex I, or to a measure that a Party adopts or maintains with respect to
sectors, sub-sectors, or activities as set out by that Party in its Schedule to Annex II.
Annex 15-A Delivery Services
7. No Party shall:
(a) require the supply of a delivery service on a universal basis as a condition

for an authorization or license to supply a delivery service not covered by a
postal monopoly; or
(b) assess fees or other charges exclusively on the supply of any delivery
service that is not a universal service for the purpose of funding the supply of
a universal service.
Annex 15-B: Committee On Transportation Services
1. The Parties hereby establish a Committee on Transportation Services (Transportation

Services Committee) composed of government representatives of the relevant trade and
transport- related national authorities of each Party. Each Party shall designate contact points
for the Transportation Services Committee in accordance with Article 30.5 (Agreement
Coordinator and Contact Points).
Annex 15-C: Professional Services
1. Each Party shall consult with relevant bodies in its territory to seek to identify professional
services where at least two of the Parties are mutually interested in establishing a dialogue on
issues that relate to the recognition of professional qualifications, licensing, or registration.
Appendix 1: Guidelines For Mutual Recognition Agreements Or Arrangements For
The Professional Services Sector
This Appendix provides practical guidance for governments, negotiating entities or other
entities entering into mutual recognition negotiations for the professional services sector.
These guidelines are non-binding and are intended to be used by the Parties on a voluntary
basis. They do not modify or affect the rights and obligations of the Parties under this
Agreement.
Section B: Form and Content of MRAs
Eligibility for Recognition - Qualifications
10. If the MRA is based on recognition of qualifications, then it should, where applicable,
state:
(a) the minimum level of education required (including entry requirements, length of
study, and subjects studied);
(b) the minimum level of experience required (including location, length, and
conditions of practical training or supervised professional practice prior to licensing,
and framework of ethical and disciplinary standards);
(c) examinations passed, especially examinations of professional competence;
(d) the extent to which home country qualifications are recognised in the host
country; and
(e) the qualifications which the parties to the MRA are prepared to recognize, for
instance, by listing particular diplomas or certificates issued by certain institutions, or
by reference to particular minimum requirements to be certified by the authorities of
the country of origin, including whether the possession of a certain level of
qualification would allow recognition for some activities but not others.
Eligibility for Recognition - Registration

11. If the MRA is based on recognition of the licensing or registration decision made by
regulators in the country of origin, it should specify the mechanism by which eligibility for
such recognition may be established.
12. If it is considered necessary to provide for additional requirements in order to ensure the
quality of the service, the MRA should set out the conditions under which those requirements
may apply, for example, in case of shortcomings in relation to qualification requirements in
the host country or knowledge of local law, practice, standards, and regulations. This
knowledge should be essential for practice in the host country or required because there are
differences in the scope of licensed practice.
13. If additional requirements are deemed necessary, the MRA should set out in detail what
they entail (for example, examination, aptitude test, additional practice in the host country or
in the country of origin, practical training, and language used for examination).
Mechanisms for Implementation
14. The MRA could state:
(a) the rules and procedures to be used to monitor and enforce the provisions of the
MRA;
(b) the mechanisms for dialogue and administrative cooperation between the parties to
the MRA; and
(c) the means of arbitration for disputes under the MRA.
15. As a guide to the treatment of individual applicants, the MRA could include details on:
(a) the focal point of contact in each party to the MRA for information on all issues
relevant to the application (such as the name and address of competent authorities,
licensing formalities, and information on additional requirements which need to be
met in the host country);
(b) the duration of procedures for the processing of applications by the relevant
authorities of the host country;
(c) the documentation required of applicants and the form in which it should be
presented and any time limits for applications;
(d) acceptance of documents and certificates issued in the country of origin in

relation to qualifications and licensing;
(e) the procedures of appeal to or review by the relevant authorities; and
(f) the fees that might be reasonably required.
16. The MRA could also include the following commitments:
(a) that requests about the measures will be promptly dealt with;
(b) that adequate preparation time will be provided where necessary;
(c) that any exams or tests will be arranged with reasonable periodicity;
(d) that fees to applicants seeking to take advantage of the terms of the MRA will be
in proportion to the cost to the host country or organisation; and
(e) that information on any assistance programmes in the host country for practical
training, and any commitments of the host country in that context, be supplied.
Licensing and Other Provisions in the Host Country
17. If applicable:
(a) the MRA could also set out the means by which, and the conditions under which,
a license is actually obtained following the establishment of eligibility, and what such
license entails (such as a license and its content, membership of a professional body,
and use of professional or academic titles);
(b) a licensing requirement, other than qualifications, should include, for example:
(i) an office address, an establishment requirement, or a residency

requirement,
(ii) a language requirement,
(iii) proof of good conduct and financial standing,
(iv) professional indemnity insurance,
(v) compliance with host country’s requirements for use of trade or firm
names, and
(vi) compliance with host country ethics, for instance independence and
incompatibility.
Annex 15-D: Programming Services
Simultaneous Substitution
1. Canada shall rescind Broadcasting Regulatory Policy CRTC 2016-334 and Broadcasting
Order CRTC 2016-335. With respect to simultaneous substitution of signals during the
retransmission in Canada of the program referenced in those measures, Canada may not
accord the program treatment less favorable than the treatment accorded to other programs
originating in the United States retransmitted in Canada.
2. The United States and Canada shall each provide in its copyright law that:
(a) retransmission to the public of program signals not intended in the original
transmission for free, over-the-air reception by the general public shall be
permitted only with the authorization of the holder of the copyright in the
program; and
(b) if the original transmission of the program is carried in signals intended for
free, over-the-air reception by the general public, willful retransmission in altered
form or non-simultaneous retransmission of signals carrying a copyright holder’s
program shall be permitted only with the authorization of the holder of the
copyright in the program.
3. Other than as provided for in paragraph 1, nothing in subparagraph 2 (b) shall be

construed to prevent a Party from maintaining existing measures relating to retransmission of
a program carried in signals intended for free, over-the-air reception by the general public; or
introducing measures to enable the local licensee of the copyrighted program to exploit fully
the commercial value of its license.
Home Shopping Programming Services
4. Canada shall ensure that U.S. programming services specializing in home shopping,
including modified versions of these U.S. programming services for the Canadian market, are
authorized for distribution in Canada and may negotiate affiliation agreements with Canadian
cable, satellite, and IPTV distributors.
Annex 15-E: Mexico’s Cultural Exceptions
In order to preserve and promote the development of Mexican culture, Mexico has negotiated
reservations in its schedules to Annex I and Annex II for certain obligations in Chapter 14
(Investment) and Chapter 15 (Cross-Border Trade in Services), which are summarized below.
Annex I:
Broadcasting (radio and free-to-air television):
Reservations taken against:
Local Presence obligation for Cross-Border Trade in Services Chapter
Sole concessions and frequency band concessions will be granted only to

Mexican nationals or enterprises constituted under Mexican laws and regulations.
Investors of a Party or their investments may participate up to 49 per cent in

concessionaire enterprises providing broadcasting services. This maximum
foreign investment will be applied according to the reciprocity existent with the
country in which the investor or trader who ultimately controls it, directly or
indirectly, is constituted.
Concessions for indigenous social use shall be granted to indigenous people and
indigenous communities of Mexico, with the objective to promote, develop and
preserve languages, culture, knowledge, traditions, identity and their internal
rules that, under principles of gender equality, enable the integration of
indigenous women in the accomplishment of the purposes for which the
concession is granted.
Under no circumstances may a concession, the rights conferred therein, facilities,

auxiliary services, offices or accessories and properties affected thereto, be
assigned, encumbered, pledged or given in trust, mortgaged, or transferred totally
or partially to any foreign government or state.
The State shall guarantee that broadcasting promotes the values of national
identity.
The broadcasting concessionaires shall use and stimulate local and national
artistic values and expressions of Mexican culture, according to the
characteristics of its programming.
The daily programming with personal performances shall include more time
covered by Mexicans.
Annex II:
Audio-visual services
Reservation taken against:
Market Access obligation for Cross-Border Trade in Services Chapter

Mexico is taking only limited commitments in the Market Access obligation
with respect to the audio-visual services sectors.
 US – Chile FTA
Article 11.8: Domestic Regulation
1. Where a Party requires authorization for the supply of a service, the competent authorities
of that Party 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 Party shall provide, without undue delay, information concerning the status of the
application. This obligation shall not apply to authorization requirements that are within the
scope of Article 11.6(2).

sectors, that any such measures that it adopts or maintains are:
supply the service;
(c) in the case of licensing procedures, not in themselves a restriction on the supply of
the service.
Parties, to bring those results into effect under this Agreement. The Parties agree to
coordinate on such negotiations as appropriate.
Annex 11.9: Professional Services
Section A - General Provisions
service providers and to provide recommendations on mutual recognition to the Commission.
following matters:
(a) education - accreditation of schools or academic programs;
(b) examinations - qualifying examinations for licensing, including alternative

methods of assessment such as oral examinations and interviews;
(c) experience - length and nature of experience required for licensing;
(d) conduct and ethics - standards of professional conduct and the nature of
(e) professional development and re-certification - continuing education and ongoing

(f) scope of practice - extent of, or limitations on, permissible activities;
(g) local knowledge - requirements for knowledge of such matters as local laws,
(h) consumer protection - alternatives to residency requirements, including bonding,

Temporary Licensing
develop procedures for the temporary licensing of professional service providers of the other
Party.
Section B - Foreign Legal Consultants
2. Each Party shall consult with its relevant professional bodies to obtain their
recommendations on:
(a) the form of association or partnership between lawyers authorized to practice in

its territory and foreign legal consultants;
(b) the development of standards and criteria for the authorization of foreign legal
consultants in conformity with Article 11.9; and
(c) other matters relating to the provision of foreign legal consultancy services.
3. Prior to initiation of consultations under paragraph 7, each Party shall encourage its
relevant professional bodies to consult with the relevant professional bodies designated by the
other Party regarding the development of joint recommendations on the matters referred to in
paragraph 2.
Section C - Temporary Licensing of Engineers
2. To this end, each Party shall consult with its relevant professional bodies to obtain their
recommendations on:
(a) the development of procedures for the temporary licensing of such engineers to
permit them to practice their engineering specialties in each jurisdiction in its
territory;
(b) the development of model procedures for adoption by the competent authorities
throughout its territory to facilitate the temporary licensing of such engineers;
(c) the engineering specialties to which priority should be given in developing

temporary licensing procedures; and
(d) other matters relating to the temporary licensing of engineers identified by the
Party in such consultations.
3. Each Party shall request its relevant professional bodies to make recommendations on the
matters referred to in paragraph 2 within two years of the date of entry into force of this
Agreement.
 US – Columbia FTA
application. At the request of the applicant, the Party’s competent authorities shall provide,
without undue delay, information concerning the status of the application. This obligation
shall not apply to authorization requirements that are within the scope of Article 11.6.2.

supply the service;
of the service.
3. If the results of the negotiations related to Article VI:4 of the GATS (or the results of any
similar negotiations undertaken in other multilateral fora in which each of the Parties
participate) enter into effect, this Article shall be amended, as appropriate, after consultations
between the Parties, to bring those results into effect under this Agreement. The Parties shall
coordinate on such negotiations, as appropriate.
Annex 11-B: Professional Services

Development of Professional Services Standards
1. Each Party shall encourage the relevant bodies in its territory to develop mutually
acceptable standards and criteria for licensing and certification of professional services
suppliers and to provide recommendations on mutual recognition to the Commission.
following matters:


(h) consumer protection – including alternatives to residency requirements, such as

Temporary Licensing
1. For mutually agreed individual professional services, each Party shall encourage the
relevant bodies in its territory to develop procedures for the temporary licensing of
professional service suppliers of the other Parties.
Temporary Licensing of Engineers
13. To this end, each Party shall consult with relevant professional bodies in its territory to
obtain their recommendations on:
(a) the development of procedures for the temporary licensing of engineers of the
other Parties to practice their engineering specialties in the territory of the consulting
Party;
throughout its territory to facilitate the temporary licensing of engineers of the other
Parties;
(c) the engineering specialties and, as applicable, the regional jurisdictions with
respect to which priority should be given in developing temporary licensing
procedures; and
(d) other matters of mutual interest to the Parties relating to the temporary licensing
of engineers identified by the consulting Party in such consultations.
Annex 11-D: Express Delivery Services
5. Notwithstanding Article 11.1.1 and 11.1.4(d), Colombia shall not use revenues derived
from the payments required under Article 24(a) and (b) of Decreto 229 of 1995 and its
amendments or successor legislation to subsidize the supply of express delivery services by
the Government or a state enterprise.
Annex 11-E
1. If a Party maintains a measure at the central level of government:
(a) entitling the agent, upon termination of a commercial agency contract, to a

payment from the principal equivalent to a portion of the commission, royalty , or
profit the agent received pursuant to the contract10;
(b) requiring that in the event the principal terminates a commercial agency contract
without just cause or the agent terminates a contract for just cause arising from actions
of the principal, the principal must provide an equitable indemnity to the agent as
compensation for the agent’s efforts to build the brand, the product line, or the
services subject to a commercial agency contract; or
(c) providing that a commercial agency contract creates an exclusive agency unless
the contract provides otherwise;
that Party shall revise or eliminate the measure in accordance with paragraph 2 within six
months after entry into force of this Agreement.
2. A Party shall:
(a) revise a measure described in subparagraph 1(a) by making the entitlement to the
payment inapplicable to the parties to a commercial agency contract;
(b) revise a measure described in subparagraph 1(b) by making the requirement to

pay the equitable indemnity inapplicable to parties that enter into a commercial
agency contract, and instead, that any indemnity upon termination of the commercial
agency contract by the principal without just cause, or upon termination of such a
contract by the agent for just cause arising from actions of the principal, shall be
determined in accordance with:
(i) general principles of contract law (for example, costs that have not been
recovered, lost profits, and detrimental reliance);11 and, in the event that the
parties expressly stipulate this,
(ii) provisions voluntarily agreed upon by the principal and agent and set out in a
commercial agency contract, to the extent consistent with applicable law; and
(c) revise a measure described in subparagraph 1(c) by providing that a principal

may contract more than one agent in a single geographic area for the same scope of
activities or products, unless the commercial agency contract provides otherwise.
3. Nothing in this Annex shall prevent the continued application, to the extent required under
a Party’s Constitution, of a measure described in paragraph 1(a) or (c) to commercial agency
contracts entered into before entry into force of legislation adopted to implement this
Annex.12
4. A Party shall not adopt a measure described in paragraph 1.
5. For purposes of this Annex, commercial agency contract means,
(a) for Colombia, a commercial agency contract within the meaning of Articles
1317 through 1331 of the Código de Comercio of Colombia; only when this contract
is related to commercial goods13; and
(b) for the United States, any contract in which a party agrees to distribute
commercial goods for another party.
 CAFTA-DR (Dominican Republic-Central America FTA)
authorities shall, within a reasonable time after the submission of an application
considered complete under its laws and regulations, inform the applicant of the decision
concerning the application. At the request of the applicant, the Party’s competent
authorities shall provide, without undue delay, information concerning the status of the
application. This obligation shall not apply to authorization requirements that are within
the scope of Article 11.6.2.

barriers to trade in services, each Party shall endeavor to ensure, as appropriate for
individual sectors, that any such measures that it adopts or maintains are:
supply the services;
of the service.
3. If the results of the negotiations related to Article VI:4 of the GATS (or the results of
any similar negotiations undertaken in other multilateral fora in which the Parties
participate) enter into effect for each Party, this Article shall be amended, as appropriate,
after consultations between the Parties, to bring those results into effect under this
Agreement. The Parties will coordinate on such negotiations as appropriate.
Article 11.13: Specific Commitments
Express Delivery Services:
(b) For purposes of this Agreement, express delivery services means the collection, transport,
and delivery, of documents, printed matter, parcels, goods, or other items on an expedited
basis, while tracking and maintaining control of these items throughout the supply of the
service. Express delivery services do not include:
(i) air transport services,
(ii) services supplied in the exercise of governmental authority, or
(iii) maritime transport services (For greater certainty, for the United States, express
delivery services do not include delivery of letters subject to the Private Express
Statutes (18 U.S.C. § 1693 et seq., 39 U.S.C. § 601 et seq.), but do include delivery of
letters subject to the exceptions to, or suspensions promulgated under, those statutes,
which permit private delivery of extremely urgent letters).
(c) The Parties express their desire to maintain at least the level of market openness they
provided for express delivery services existing on the date this Agreement is signed.
(d) Neither a Central American Party nor the Dominican Republic may adopt or maintain any
restriction on express delivery services that is not in existence on the date this Agreement is
signed. Each such Party confirms that it does not intend to direct revenues from its postal
monopoly to benefit express delivery services as defined in subparagraph (b). Under title 39
of the United States Code, an independent government agency determines whether postal
rates meet the requirement that each class of mail or type of mail service bear the direct and
indirect postal costs attributable to that class or type plus that portion of all other costs of the
U.S. Postal Service reasonably assignable to such class or type.
Annex 11.9: Professional Services
service suppliers and to provide recommendations on mutual recognition to the Commission.
following matters:
(b) examinations – qualifying examinations for licensing, including alternative methods
of assessment such as oral examinations and interviews;
(d) conduct and ethics – standards of professional conduct and the nature of disciplinary
action for non-conformity with those standards;
regulations,
language, geography, or climate; and
Temporary licensing
develop procedures for the temporary licensing of professional service suppliers of another
Party.
Annex 11.13: Specific Commitments
Section A: Costa Rica
1. Costa Rica shall repeal articles 2 and 9 of Law No. 6209, entitled Ley de Protección al
Representante de Casas Extranjeras, dated 9 March 1978, and its regulation, and item b) of
article 361 of the Código de Comercio, Law No. 3284 of 24 April 1964, effective on the date
of entry into force of this Agreement.
2. Subject to paragraph 1, Costa Rica shall enact a new legal regime that shall become
applicable to contracts of representation, distribution, or production, and:
(a) shall apply principles of general contract law to such contracts;
(b) shall be consistent with the obligations of this Agreement and the principle of
freedom of contract;
(c) shall treat such contracts as establishing an exclusive relationship only if the
contract explicitly states that the relationship is exclusive;
(d) shall provide that the termination of such contracts either on their termination dates
or in the circumstances described in subparagraph (e) is just cause for a goods or
service supplier of another Party to terminate the contract or allow the contract to
expire without renewal; and
(e) will allow contracts with no termination date to be terminated by any of the parties
by giving ten months advance termination notice.
3. The absence of an express provision for settlement of disputes in a contract of
representation, distribution, or production shall give rise to a presumption that the parties
intended to settle any disputes through binding arbitration. Such arbitration may take place in
Costa Rica. However, the presumption of an intent to submit to arbitration shall not apply
where any of the parties objects to arbitration.
4. The United States and Costa Rica shall encourage parties to existing contracts of
representation, distribution, or production to renegotiate such contracts so as to make them
subject to the new legal regime enacted in accordance with paragraph 2.
5. In any case, the repeal of articles 2 and 9 of Law No. 6209 shall not impair any vested
right, when applicable, derived from that legislation and recognized under Article 34 of the
Constitución Política de la República de Costa Rica.
6. Costa Rica shall, to the maximum extent possible, encourage and facilitate the use of
arbitration for the settlement of disputes in contracts of representation, distribution, or
production. To this end, Costa Rica shall endeavor to facilitate the operation of arbitration
centers and other effective means of alternative resolution of claims arising pursuant to Law
No. 6209 or the new legal regime enacted in accordance with paragraph 2, and shall
encourage the development of rules for such arbitrations that provide, to the greatest extent
possible, for the prompt, low-cost, and fair resolution of such claims.
7. For purposes of this Section:
(a) contract of representation, distribution, or production has the same meaning as

under Law No. 6209; and
(b) termination date means the date provided in the contract for the contract to end, or
the end of a contract extension period agreed upon by the parties to the contract.
Section B: The Dominican Republic

1. The Dominican Republic shall not apply Law No. 173 to any covered contract signed after
the date of entry into force of this Agreement unless the contract explicitly provides for the
application of Law No. 173 and in place of Law No. 173 shall:
(a) apply principles of the Código Civil of the Dominican Republic to the covered
contract;
(b) treat the covered contract in a manner consistent with the obligations of this
Agreement and the principle of freedom of contract;
(c) treat the termination of the covered contract, either on its termination date or
pursuant to subparagraph
(d), as just cause for a goods or service supplier to terminate the contract or allow the
contract to expire without renewal;
(d) if the covered contract has no termination date, allow it to be terminated by any of
the parties by giving six months advance termination notice;
(e) provide that after the termination of the covered contract or the decision not to
renew it:
(i) if the covered contract contains an indemnification provision, including a
provision providing for no indemnification, the indemnification shall be based on
such provision;
(ii) if the covered contract contains no such provision, any indemnification shall
be based on actual economic damages and not on a statutory formula;
(iii) the principal shall honor any pending warranties; and
(iv) the principal shall compensate the distributor for the value of any inventory
that the distributor is unable to sell by reason of the termination or decision not to
renew the contract. The value of inventory shall include any customs duties,
surcharges, freight expenses, internal movement costs, and inventory carrying
costs paid by the distributor;
(f) allow disputes arising from the covered contract to be resolved through binding
arbitration; and
(g) allow the parties to the covered contract to establish in the contract the mechanisms
and forums that will be available in the case of disputes.
Nothing in subparagraph (c) shall prevent parties from demanding indemnification,
when appropriate, in the form, type, and amount agreed in the contract.
2. If Law No. 173 applies to a covered contract, either because the contract was signed before
the entry into force of this Agreement or the contract explicitly provides for the application of
Law No. 173, and the contract is registered with the Banco Central in accordance with Article
10 of Law No. 173, the Dominican Republic shall provide, consistent with articles 46 and 47
of the Constitución de la República Dominicana, that:
(a) the amount of an indemnity for termination of a covered contract based on the
factors listed in Article 3 of Law No. 173 shall be no greater than would be available to
the claimant under the Código Civil of the Dominican Republic;
(b) during or after the conciliation process under Article 7 of Law No. 173, the parties
to a contract may agree to resolve the dispute through binding arbitration; and
(c) the Government of the Dominican Republic and the conciliation authorities shall
take all appropriate steps to encourage the resolution of disputes arising under covered
contracts through binding arbitration.
3. For all covered contracts,

(a) a goods or service supplier shall not be required to pay damages or an indemnity for
terminating a covered contract for just cause or allowing such a contract to expire
without renewal for just cause; and
(b) a contract shall be interpreted as establishing an exclusive distributorship only to the
extent that the terms of the contract explicitly state that the distributor has exclusive
rights to distribute a product or service.
4. The requirement that the parties to a contract seek a negotiated settlement of any dispute
through conciliation, and all other provisions of Law No. 173, shall retain all their validity
and force for all contractual relations not subject to paragraph 1.

(a) covered contract means a concession contract, as defined in Law No. 173, to which
a goods or service supplier of the United States or any enterprise controlled by such
supplier is a party;
(b) Law No. 173 means Law No. 173, entitled “Ley sobre Protección a los Agentes
Importadores de Mercancías y Productos,” dated April 6, 1966, and its modifications;
and
(c) termination date means the date provided in the contract, or the end of a period of
extension of a contract agreed upon by the parties to the contract.
Section C: El Salvador
1. Articles 394 through 399-B of the Código de Comercio shall apply only to contracts that
were entered into after such Articles entered into force.
2. Articles 394 through 399-B of the Código de Comercio shall not apply to any distribution
contract that a person of the United States enters into after the date of entry into force of this
Agreement, as long as the contract so provides.
3. Parties to a distribution contract shall be permitted to establish in the contract the

mechanisms and forums that will be available in the case of disputes.
4. If a distribution contract makes specific provision for indemnification, including a

provision providing for no indemnification, Article 397 of the Código de Comercio shall not
apply to that contract.
5. Under Salvadoran law, a distribution contract shall be treated as exclusive only if the
contract states so expressly.
6. El Salvador shall encourage parties to distribution contracts made after the date of entry
into force of this Agreement to include provisions providing for binding arbitration of
disputes and specifying methods for determining any indemnity.
7. For purposes of this Section, distribution contract has the same meaning as under Articles
394 through 399-B of the Código de Comercio.
Section D: Guatemala
1. The Parties recognize that Guatemala, through Decree 8-98 of the Congreso de la
República, which reformed the Código de Comercio de Guatemala, repealed Decree 78 71,
which regulated contracts of agency, distribution, or representation, and created a new regime
for agents of commerce, distributors, and representatives.
2. During the year following the date of entry into force of this Agreement, the United States
and Guatemala shall encourage parties to contracts without a fixed termination date that
remain subject to Decree 78-71 to renegotiate such contracts. The new contracts shall be
based on the terms and conditions established by mutual agreement of the parties and on the
provisions of the Código de Comercio de Guatemala, which shall regulate the activities of
agents of commerce, distributors, and representatives. The United States and Guatemala shall
also encourage parties to other contracts of agency, distribution, or representation that remain
subject to Decree 78-71 to renegotiate such contracts so as to make them subject to the new
regime referenced in paragraph 1.
3. The absence of an express provision for settlement of disputes in a contract of agency,

distribution, or representation shall, to the extent consistent with the Constitución Política de
la República de Guatemala, give rise to a rebuttable presumption that the parties intended to
settle any disputes through binding arbitration.
4. The United States and Guatemala shall encourage the parties to contracts of agency,
distribution, or representation to settle any disputes through binding arbitration. In particular,
if the amount and form of any indemnification payment is not established in the contract and
a party wishes to terminate the contract, the parties may agree to arbitration to establish the
amount, if any, of the indemnity.

(a) termination date means the date provided in the contract for the contract to end, or the
end of a contract extension period agreed upon by the parties to the contract; and
(b) contract of agency, distribution, or representation has the same meaning as under
Decree 78-71.
Section E: Honduras
1. The obligations set out in paragraphs 2, 3, and 4 shall not apply to:
(a) express conditions included in a contract of representation, distribution, or agency;
or
(b) to contractual relations entered into before the date of entry into force of this
Agreement.
2. Honduras may not require a goods or service supplier of another Party:

(a) to supply such goods or services in Honduras by means of a representative, agent, or
distributor, except as otherwise provided by law for reasons of health, safety, or
consumer protection;
(b) to offer or introduce goods or services in the territory of Honduras through existing
concessionaires for such goods or services unless a contract between them requires an
exclusive relationship; or
(d) to pay damages or an indemnity for terminating a contract of representation, or
agency for just cause or allowing such a contract to expire without renewal for just
cause.
3. Honduras may not require that a representative, agent, or distributor be a national of

Honduras or an enterprise controlled by nationals of Honduras;
4. Honduras shall provide that:

(a) the fact that a contract of representation, distribution, or agency has reached its
termination date shall be considered just cause for a goods or service supplier of
another Party to terminate the contract or allow the contract to expire without
renewal; and
(b) any damages or indemnity for terminating a contract of representation, distribution,
or agency, or allowing it to expire without renewal, without just cause shall be based on
the general law of contracts.
Nothing in subparagraph (b) shall be construed to require Honduras to adopt any

measure that affects the right of the parties to demand indemnification, when appropriate, in
the form, type, and amount agreed in the contract.
5. Honduras shall provide that:

(a) if the amount and form of any indemnification payment is not established in a contract
of representation, distribution, or agency and a party wishes to terminate the contract;
(i) the parties may agree to resolve any dispute regarding such payment in the Center
for Conciliation and Arbitration of Honduras, or if the parties agree otherwise, to
another arbitration center; and
(ii) in such proceeding general principles of contract law will be applied;
(b) Decree Law No. 549 shall apply to a contract only if:
(i) the representative, distributor, or agent has registered with the Secretaría de
Estado en los Despachos de Industria y Comercio, which shall be possible only if it
is party to a written contract of representation, distribution, or agency; and
(ii) the contract was entered into while such law was in effect; and
(c) in any decision awarding an indemnity calculated under Article 14 of Decree Law No.
549, the amount shall be calculated as of the date of entry into force of this Agreement,
expressed in terms of Honduran lempiras as of that date, and converted into U.S. dollars at
the exchange rate in effect on the date of the decision.
6. Under Honduran law, a contract of representation, distribution, or agency is exclusive only

if the contract states so expressly.

(a) termination date means the date provided in the contract for the contract to end, at
12:00 p.m. on that day, or the end of a contract extension period agreed upon by the
parties to the contract; and
(b) contract of representation, distribution, or agency has the same meaning as under
Decree Law No. 549.
 US – Israel FTA
IFTA Declaration on Trade in Services
4. In situations where services are regulated by political subdivisions, the authorities of each
Party responsible for overseeing the operation of this Declaration will consult with such
political subdivisions in an effort to assure that such regulations are consistent with the
principles of this Declaration.
5. Each Party will endeavor to assure that its regulatory agencies will accord national
treatment to suppliers of the service from the other nation, to the extent that such treatment is
consistent with those agencies' legal authority, including their exercise of discretion in
fulfilling their statutory mandates. The authorities of each Party responsible for implementing
this Declaration shall consult with their own regulatory agencies in an effort to achieve
consistency with the principles of this Declaration.
6. Each Party recognizes that there may be established public monopolies in the service area
with reserved special rights. Nonetheless, each Party will endeavor to provide that, subject to
their reserved special rights, such monopolies shall make their purchases and sales of services
involving either imports or exports affecting the commerce of the other nation in accordance
with the principles of this Declaration.
7. Each Party will make public its domestic laws and regulations affecting trade in services
and notify the other Party of laws and regulations which discriminate against a service
exported from the other nation. Each Party will provide to the nationals and companies of the
other nation reasonable access to established domestic review and judicial proceedings
relative to regulations on trade in services.
 US – Korea FTA
shall not apply to authorization requirements that a Party adopts or maintains with respect to
sectors, sub-sectors, or activities as set out in its Schedule to Annex II.

barriers to trade in services, while recognizing the right to regulate and to introduce new
regulations on the supply of services in order to meet national policy objectives, each Party
shall endeavor to ensure, as appropriate for individual sectors, that such measures are:
supply the service; and
(b) in the case of licensing procedures, not in themselves a restriction on the supply
of the service.
Parties, to bring those results into effect under this Agreement.
 US – Morocco FTA
authorities shall, within a reasonable period after the submission of an application considered
obligation shall not apply to authorization requirements that are within the scope of Article
11.6.2.

supply the service;
(c) in the case of licensing procedures, not in themselves a restriction on the supply of
the service.
Annex 11-B: Professional Services
Development Of Professional Standards
service suppliers and to provide recommendations on mutual recognition to the Joint
Committee.
following matters:
(b) examinations – qualifying examinations for licensing;



Temporary Licensing
Party.
 US – Oman FTA
(a) based on objective and transparent criteria, such as competence and the ability to supply
the service;
(c) in the case of licensing procedures, not in themselves a restriction on the supply of the
service.
participate) enter into effect for each of the Parties, this Article shall be amended, as
appropriate, after consultations between the Parties, to bring those results into effect under
this Agreement. The Parties shall coordinate on such negotiations, as appropriate.
Annex 11.9 Professional Services
Development of Professional Services
services suppliers and to provide recommendations on mutual recognition to the Joint
Committee.
following matters:


regulations, geography, or climate; and

Temporary Licensing
Party.
Annex 11.12 Specific Commitments
1. (a) Subject to subparagraph (b), Oman reserves the right to require that up to 80 percent of
the employees of a covered investment be Omani nationals.
(b) For purposes of subparagraph (a), “employees” does not include managers, members
of the board of directors, or specialty personnel.
2. For greater certainty:
(a) Oman shall not restrict the ability of a covered investment to employ U.S. nationals as
managers and specialty personnel; and
(b) nothing in this Annex shall be construed to limit Oman’s obligations under Article
12.8 (Senior Management and Boards of Directors).
3. Notwithstanding paragraph 1, Oman shall allow a covered investment to employ a non-
Omani national in the event that the covered investment is unable to locate a qualified Omani
national for the relevant position.
 US – Panama FTA

sectors, that any such measures that it adopts or maintains are:
supply the service;
of the service.
similar negotiations undertaken in other multilateral fora in which the Parties participate)
enter into effect for each Party, this Article shall be amended, as appropriate, after
consultations between the Parties, to bring those results into effect under this Agreement. The
Parties will coordinate on such negotiations as appropriate.
Annex 11.9 Professional Services
service suppliers and to provide recommendations on mutual recognition to the Commission.
following matters:



Temporary licensing
Party.
 US – Peru FTA

supply the service;
of the service.
participate) enter into effect, this Article shall be amended, as appropriate, after consultations
between the Parties, to bring those results into effect under this Agreement. The Parties shall
Annex 11-B Professional Services
Development of Professional Services Standards
1. Each Party shall encourage the relevant bodies in its territory to develop mutually
acceptable standards and criteria for licensing and certification of professional services
suppliers and to provide recommendations on mutual recognition to the Commission.
following matters:



Temporary Licensing
4. For mutually agreed individual professional services, each Party shall encourage the
relevant bodies in its territory to develop procedures for the temporary licensing of
professional service suppliers of the other Parties.
Temporary Licensing of Engineers
12. At its first meeting, the Working Group shall consider establishing a work program in
conjunction with the relevant professional bodies in the territories of the Parties to develop
procedures for the temporary licensing by the competent authorities in one Party of engineers
of other Parties.
13. To this end, each Party shall consult with relevant professional bodies in its territory to
obtain their recommendations on:
(a) the development of procedures for the temporary licensing of engineers of the
other Parties to practice their engineering specialties in the territory of the consulting
Party;
throughout its territory to facilitate the temporary licensing of engineers of the other
Parties;
(c) the engineering specialties and, as applicable, the regional jurisdictions with
respect to which priority should be given in developing temporary licensing
procedures; and
(d) other matters of mutual interest to the Parties relating to the temporary licensing
of engineers identified by the consulting Party in such consultations.
 US – Singapore FTA
ARTICLE 8.8 : DOMESTIC REGULATION
authorities 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 Party shall provide, without undue delay, information concerning the status of the
application. This obligation shall not apply to authorization requirements that are within the
scope of Article 8.7.2.

procedures, technical standards and licensing requirements do not constitute unnecessary
supply the service;
of the service.

Domestic Regulation in The United States Free Trade Agreements

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This document contains the select provisions on

Domestic Regulation in the United States Free

Mentor – Ms. Shiny Pradeep

ARTICLE 10.7: DOMESTIC REGULATION

2. With a view to ensuring that measures relating to qualification requirements and

(a) education – accreditation of schools or academic programs;

(b) examinations – qualifying examinations for licensing, including alternative

(c) experience – length and nature of experience required for licensing;

(e) professional development and re-certification – continuing education and ongoing

(f) scope of practice – extent of, or limitations on, permissible activities;

(h) consumer protection – alternatives to residency requirements, including bonding,

ARTICLE 10.7: DOMESTIC REGULATION

2. With a view to ensuring that measures relating to qualification requirements and

Annex 10-B Professional Services

Development of Professional Standards

(a) education - accreditation of schools or academic programs;

(b) examinations - qualifying examinations for licensing;

(c) experience - length and nature of experience required for licensing;

(e) professional development and re-certification - continuing education and ongoing

(f) scope of practice - extent of, or limitations on, permissible activities;

(h) consumer protection - including alternatives to residency requirements, such as

Article 15.8: Development and Administration of Measures

2. If a Party adopts or maintains a measure relating to licensing requirements and procedures,

(d) endeavors to accept an application electronically;

(i) informs the applicant that the application is incomplete,

(iii) provides the applicant with an opportunity to provide the additional

(a) any fee;

(b) the contact information of a relevant competent authority;

(c) any procedure for appeal or review of a decision concerning an application;

(f) any indicative timeframe for processing of an application;

(g) any requirement or procedure; and

(h) any technical standard.

Annex 15-A Delivery Services

(a) require the supply of a delivery service on a universal basis as a condition

Annex 15-B: Committee On Transportation Services

1. The Parties hereby establish a Committee on Transportation Services (Transportation

Annex 15-C: Professional Services

Section B: Form and Content of MRAs

Eligibility for Recognition - Qualifications

(c) examinations passed, especially examinations of professional competence;

Eligibility for Recognition - Registration

Mechanisms for Implementation

14. The MRA could state:

(c) the means of arbitration for disputes under the MRA.

(d) acceptance of documents and certificates issued in the country of origin in

(e) the procedures of appeal to or review by the relevant authorities; and

(f) the fees that might be reasonably required.

16. The MRA could also include the following commitments:

(b) that adequate preparation time will be provided where necessary;

Licensing and Other Provisions in the Host Country

(i) an office address, an establishment requirement, or a residency

(iii) proof of good conduct and financial standing,

(iv) professional indemnity insurance,

Annex 15-D: Programming Services

3. Other than as provided for in paragraph 1, nothing in subparagraph 2 (b) shall be

Home Shopping Programming Services

Annex 15-E: Mexico’s Cultural Exceptions

Broadcasting (radio and free-to-air television):

Reservations taken against:

Local Presence obligation for Cross-Border Trade in Services Chapter

Sole concessions and frequency band concessions will be granted only to

Investors of a Party or their investments may participate up to 49 per cent in

Under no circumstances may a concession, the rights conferred therein, facilities,