Catherine Brown (University of Calgary) & Christine Manolakas (McGeorge) have published Tax Discrimination and Trade in Services: The Search for Balance in Canada-U.S. Relations, 40 Geo. J. Int'l L. 3 (2008).  Here is the abstract:

Canada and the United States produce the largest bilateral flow of goods and services in the world. Both countries also assumed significant obligations of non-discrimination under numerous trade agreements, including the NAFTA and the WTO. Nevertheless, both countries continue to boast tax legislation that may negatively impact the competitive position of service providers of the other country. The paper examines these measures against the background of obligations assumed under trade agreements and the Canada-U.S. Tax Treaty.

The paper also challenges the reader to consider the broader question of whether enhanced tax cooperation might better serve the needs of Canada and the United States. The paper is timely as the international tax rules of Canada and the United States are currently under review and revision, including rules that impact service providers. Canada and the United States have also recently signed a Fifth Protocol to the Canada-U.S. Tax Treaty that significantly impacts the tax treatment of cross-border service providers. The paper concludes with a proposal for removing some of the current tax obstacles for service providers supplying services between Canada and the United States.

This paper will be of interest to those who are advising cross-border service providers as well as those with a borader interest in tax and trade law issues.