WORLD TRADE
ORGANIZATIONS/CSS/W/120
27 November 2001
(01-6055)
Council for Trade in Services
Special SessionOriginal:  Spanish
COMMUNICATION FROM COLOMBIA1
Distribution Services
The following communication has been received from the delegation of Colombia with the
request that it be distributed to the Members of the Council for Trade in Services.
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I. DISTRIBUTION SERVICES IN COLOMBIA
1. Distribution services are an economic activity of great importance in economies, since they
constitute a link between the producers of goods and the consumers.  It is estimated that the
distribution services in Colombia provide 9.58 per cent of GDP and involve 21.66 per cent of the
workforce, of whom 74.4 per cent are in the in formal economy, while the remaining 25.6 per cent
work in the formal sector.
2. The major national chains have formed associations with foreign investors, resulting in an
expansion of the sales outlets with stores of an area of over 10,000 square metres.  Similarly, some
international chains have formed associations with local economic groups, thereby initiating a processof domestic expansion.  At the same time, some traditional stores, grouped around distribution
cooperatives, have transformed themselves into supermarkets and have begun to develop other forms
of trading, such as franchises and electronic commerce.
3. All this has led to an increase in the provision of distribution services in Colombia, which has
significantly benefited the consumer.  Greater competition has meant a substantial improvement in theprovision of services, market control over prices, greater choice of goods for the consumer,
improvements in the quality of goods and greater opportunities for the marketing of goods, etc.
4. The services for marketing mass consumption goods have reduced the number of
intermediaries and have given rise to logistical operators, who take control of the goods from the end
of the production lines, store them, transport and distribute them in large volumes to supermarkets andin small quantities to shops, so that they arrive at the various sales outlets on the national territory.
Other consumer goods such as ready-made clothes, furniture, electrical appliances and vehicles are
mainly distributed in specialized shops, although some goods, such as clothing, with the development
of their own trademarks by the large commercial chains, encounter competition from the
hypermarkets.
                                                     
1 Colombia reserves the right to amend its proposal at any time.  This communication does not
constitute an offer by Colombia with regard to this sector.S/CSS/W/120
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II. BARRIERS TO TRADE IN DISTRIBUTION SERVICES
5. Suppliers of distribution services in Colombia have encountered the following barriers to the
provision of such services:
A. LIMITATIONS ON MARKET ACCESS
• Limitations on the participation of foreign capital;
• proof of economic necessity for commercial presence;
• discriminatory measures with respect to the number of sales outlets and the
establishment of commercial networks;
• requirements of nationality or minimum percentages of employment of the domestic
workforce, for the recruitment of staff in the case of commercial presence;
• restrictions on the entry and exit of qualified and unqualified staff.
B. LIMITATIONS ON NATIONAL TREATMENT
• Residence requirements for the recruitment of staff in the case of commercial
presence;
• measures to prevent foreign suppliers from acquiring or possessing property titles in
border areas;
• performance requirements as a means of ensuring the marketing of domestically
produced goods when there is commercial presence for the provision of the
distribution service;
• measures to ensure that advertising is carried out by nationals where the supplier of
distribution services has commercial presence.
C. NATIONAL REGULATIONS THAT CONSTITUTE BARRIERS TO TRADE IN DISTRIBUTION SERVICES
• A lack of transparency in domestic town planning regulations, that might prejudice
decisions on the location of installations to provide such services through commercialpresence;
• a lack of transparency in the licensing regulations, owing to the lack of clearly
established and objective criteria.
III. PROPOSALS
6. To continue with the classification in document MTN.GNS/W/120 which defines the
distribution services on the basis of the Central Product Classification:S/CSS/W/120
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CPC
• Commission agents' services 621
• Wholesale trade services 622
• Retailing services 631-632-6111-6113-6121
• Franchising 8929
7. Restrictions on the participation of foreign capital should be abolished.
8. Requirements of proof of economic necessity for the provision of distribution services for
both the wholesale trade and retailing should be abolished.
9. Restrictions on the number of suppliers of distribution services should be abolished.
10. Commitments should be made with regard to the movement of individuals, including both
qualified and unqualified staff.  This should be complemented by facilities for the granting of
temporary work permits to foreigners who are recruited to carry out commercial activities.
11. Residence or nationality requirements for the provision of services should be abolished.
12. Performance requirements should be abolished, especially those that require the marketing of
domestically produced rather than imported goods when there is commercial presence for the
provision of the distribution service.
13. Market access commitments should not exclude any subsector of the distribution services.
14. Electronic commerce is a form of transborder distribution which facilitates the marketing of
goods.  Specific commitments that place no restrictions on the provision of this service stimulate thetrade in goods.
15. To devise specific disciplines for this sector in domestic regulations – in conformity with the
provisions of Article VI.4 of the General Agreement on Trade in Services – so that such domestic
regulations do not constitute unnecessary barriers to the trade in distribution services.
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