. /.RESTRICTEDWORLD TRADE
ORGANIZATIONS/C/W/83
9 December 1998
(98-4970)
Council for Trade in Services Original:  English
COMMUNICATION FROM THE UNITED STATES
Architectural and Engineering Services
The following communication received from the delegation of the United States was
circulated informally on 22 July 1998 to the Members of the Council for Trade in Services to assist inthe discussion on Architectural  Services in the context of the Information Exchange Programme.
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I. GROWTH OUTLOOK AND BENEFITS OF LIBERALIZATION
1. Development of architectural and engineering skills adds to the wealth and resources of
nations.  The availability of capable and competent engineers makes it easier to plan and produce
projects to promote health, welfare and safety of the population and to support infrastructural
improvements.   Technology transfer, especially that connected with new advanced productionprocesses, requires the presence of engineers familiar with the technology.
2. All nations and all sizes of economic entities stand to benefit from additional liberalization of
trade in this sector.  As the U.S. International Trade Commission has noted, several WTO Members,
including Malaysia, Indonesia, and Brazil, are active in providing architectural and engineering
services in foreign markets.  And as the WTO Secretariat highlights, large as well as small firms are
active in providing architectural and engineering services.
3. According to information provided by the U.S. International Trade Commission, U.S.
architectural and engineering firms are highly competitive and maintain a strong presence in the
global marketplace.  Majority-owned architecture and engineering affiliates of U.S. firms generated
sales of $ 7.8 billion in overseas markets in 1995.  ITC data (which includes construction services)
indicate that in 1996, U.S. firms total foreign billings grew by nearly 20 percent to $ 23.8 billion.
This trend is likely to continue, as countries realize that it is to their advantage to allow competition inthis sector to support infrastructure improvements.  And as the Secretariat has mentioned, the growth
of the internet and electronic commerce will help promote additional cross-border trade for
architectural and engineering services.
II. POSSIBLE AREAS FOR FURTHER DISCUSSION AND WORK
4. Although many WTO members have taken on significant market access commitments in this
sector, further work may be needed.
(a) Those WTO Members that have not made commitments for architectural and
engineering services should consider doing so; what concerns have prevented them
from making such commitments?
(b) All WTO Members should strive for maximum transparency in this sector.S/C/W/83
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(c) The Secretariat notes that the most common market access limitations in architectural
and engineering services sectors are limitations on the type of legal entity allowed for
commercial presence of service suppliers, followed by limitations on the participation
of foreign capital. Citizenship and nationality requirements also continue to exist.
Members could review the rationale for these barriers to see if they are still necessaryor if they unnecessarily infringe on other national priorities, such as infrastructure
improvements.
(d) WTO Members should consider the appropriate balance between Article VI-type
disciplines and industry self-regulation and consider whether existing international
guidelines can be adopted by WTO Members or used as the basis for future WTO
discussion.
(e) The WTO Working Party on Professional Services is looking at issues such as mutual
recognition of qualifications and licensing.  WTO Members also should give thought
to whether current requirements (in certain countries) for admission to national
registers are necessary.
(f) Reciprocity requirements and MFN exemptions also should be reviewed to see if they
are still necessary.
(g) Given the increasing importance of cross-border trade, WTO Members should review
restrictions that exist in this mode of delivery.
III. U.S. REGIME
5. The U.S. has a very liberal regime regarding foreign provision of architectural services.  The
U.S. GATS schedule imposes no limitations on market access in the modes of cross-border supply ofarchitectural services, consumption abroad or commercial presence, with the exception of a minor
commercial presence limitation applied by one state.  Mode 4, presence of natural persons, is unbound
except as indicated in the horizontal section of the schedule.  Responsibility for regulating the
architectural industry lies with the states.
6. Regarding engineering and integrated engineering services, the U.S. undertook full market
access commitments in modes 1, 2 and 3.  Mode 4 is unbound except as indicated in the horizontal
section of GATS commitments.  The only reservations  are for citizenship requirements for licensing
of professional engineers in the District of Columbia and in-state residency requirements in a dozen
states.  For all functions performed by an engineer that require licensing (signing drawings, blueprints,
certifications), a license is required in all jurisdictions for both nationals and foreign persons.
IV. REMARKS ON SECRETARIAT PAPER/QUESTIONS FOR DISCUSSION
7. We agree with the Secretariat’s point (para. 8) that the W/120 classification of engineering
services and construction and engineering services should be further examined and discussed to make
sure that WTO Members have and will offer commitm ents in a manner that reflects the commercial
activities of service providers in that sector.  We also will need to look at the appropriate classification
for services provided by surveyors or topographical engineers.
8. We believe that it would be more accurate in para. 25 to say that the NAFTA includes certain
provisions (rather than “disciplines”), such as objectivity and transparency, pertaining to the licensing
and certification of professionals.
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