Chapter 12 contains rules and obligations to facilitate the flow of services between NAFTA contracting parties. The chapter applies to all measures adopted or maintained by a party in the area of transgression, defined as the provision of a service: GATS: General Agreement on Trade in Services, which came into force in January 1995. This is the first multilateral agreement on international trade in services. Together, these agreements mean that about half of all goods entering the United States enter duty-free, according to the government. The average import duty on industrial products is 2%. Since 1991, Canada has concluded 24 bilateral agreements for the promotion and protection of foreign investment (FIPA) and is in the process of entering into further negotiations. These FIPAs are similar to NAFTA Chapter 11 and contain disciplines that help open up investment markets and make them safer. IFSs focus on emerging and transformational economies, which are increasingly important to Canadian investors. Developing countries need the capital they invest and they also want to ensure predictable investment flows. For investors, IFIs are thus a necessary signal of stability. ITA: Information Technology Agreement. A WTO-based agreement, approved by several MEPs, calls for the phasing out of the rights of the most favoured nation on many computer and telecommunications products.
1. No unnecessary barriers to trade: Articles 2 and 5 and Schedule 3 of the OTC agreement provide that standards, technical regulations and compliance assessment procedures do not create unnecessary barriers to international trade. Article 2 states that technical rules are no more restrictive than those necessary to achieve a legitimate objective (such as national security, the prevention of deceptive practices, the protection of human health or safety or the environment). Article 5 states that compliance assessment procedures are no more stringent than necessary to ensure that products meet applicable requirements. Although regulators have a margin of appreciation in defining their desired level of protection, they must choose the measure least restricting trade, which would adequately achieve the legitimate objective pursued. All these agreements still do not collectively add up to free trade in its form of free trade. Bitter interest groups have successfully imposed trade restrictions on hundreds of imports, including steel, sugar, automobiles, milk, tuna, beef and denim. Appendix 19-3 contains other entities whose acquisition is covered by the chapter. For Canada, these are some federal and provincial crown businesses, as well as municipal government businesses, including some local transportation facilities and utilities in the drinking water, electricity, gas and heat sectors.