The Multilateral Trading System Basic Elements

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GENERAL AGREEMENT ON TRADE IN SERVICES
INTRODUCTION
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General Agreement on Trade in Services
Objectives

• Expansion of services trade
• Progressive liberalization through
  successive rounds of negotiations
• Transparency of rules and regulations
• Increasing participation of developing
  countries

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Conceptual Basis

• Liberalization as a means of growth and
  development
• Liberalization, not deregulation
• the meaning of liberalization (market access and
  national treatment)
• the right to regulate and need to regulate
• The role of liberalization in the process of
  development
• Progressivity of liberalization

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The GATS

• A set of Rules and Disciplines
• Articles of the Agreement
• General Obligations
• Specific Commitments
• Annexes
• Schedules of Specific Commitments
• Market Access
• National Treatment

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GENERAL AGREEMENT ON TRADE IN SERVICES CONTENT
ANNEXES
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• UNIVERSAL COVERAGE OF GATS
• MEASURES AT ALL GOVERNMENT LEVELS(including
  non-governmental bodies exercising delegated
  authority)
• ALL SERVICES(except those provided in the
  exercise of governmental authority)

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Article I - Scope and Definition

• ALL MEASURES AFFECTING TRADE IN SERVICES
• (At all government levels, including
  non-governmental bodies exercising delegated
  authority)
• DEFINITION OF TRADE IN SERVICES
• (1) Cross border supply
• (2) Consumption abroad
• (3) Commercial presence
• (4) Presence of natural persons
• UNIVERSAL COVERAGE OF GATS
• (All services, except those provided in the
  exercise of governmental authority and air
  transport )

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General Obligations and Disciplines (Part II)

• Unconditional obligations
• Most-Favoured-Nation Treatment
• Transparency
• Domestic Regulation
• Monopolies and Business Practices
• Increasing participation of developing countries
• (contact points)
• Conditional Obligations
• (specific commitments)
• Transparency
• Domestic Regulation
• Monopolies
• Payments and Transfers

• Permissive provisions
• Economic integration
• Recognition
• Exceptions
• Restrictions on Balance of Payments grounds
• General and Security Exceptions
• To be negotiated
• Emergency Safeguards
• Government Procurement
• Subsidies
• Disciplines for domestic regulation

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Most Favoured Nation Treatment Article II (1)
of the GATS

• each Member shall accord immediately and
  unconditionally to services and service suppliers
  of any other Member treatment no less favourable
  than that it accords to like services and service
  suppliers of any other country.
• Exemptions may be listed for periods not
  exceeding ten years in principle.

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Specific commitments(Part III)

• Article XVI (Market Access)
• each Member shall accord services and service
  suppliers of any other Member treatment no less
  favourable than that .. Specified in its
  Schedule
• no limitations on the number of service
  suppliers
• no limitations on the value of transactions and
  assets
• no limitations on number of operations or
  quantity of output
• no limitations on the total number of persons
  employed
• no restrictions on the types of legal entity or
  joint venture
• no limitations on foreign capital participation
• or requirement of an economic needs test

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Specific commitments(Part III)

• Article XVII (National Treatment)
• each Member shall accord services and service
  suppliers of any other Member, in respect of all
  measures affecting the supply of services,
  treatment no less favourable than it accords to
  its own like services and service suppliers
• Article XVIII (Additional Commitments)
• Commitments with respect to measures not subject
  to scheduling under Articles XVI or XVII
• Examples Qualifications, standards, licensing.

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Country Schedules(specific commitments by
service sector and mode of supply)
Country X - Schedule of Specific Commitments
Modes of supply 1) Cross-border supply 2)
Consumption abroad 3) Commercial presence 4)
Presence of natural persons
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Annexes to the Agreement

• Types of Annexes
• On provisions
• Article II (MFN Exemptions)
• Movement of Natural Persons
• On sectors
• Air Transport
• Telecommunications
• Financial Services
• On negotiations
• Basic Telecommunications
• Second Annex on Financial Services
• Maritime Transport

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Progressive Liberalization(Part IV)

• Article XIX (Negotiation of Specific Commitments)
• Members shall enter into successive Rounds of
  negotiationwith a view to achieving a
  progressively higher level of liberalization
• Due respect for national policy objectives and
  the level of development
• Flexibility for individual developing country
  Members (to open fewer sectors, liberalize fewer
  types of transactions)
• Negotiating guidelines and procedures based on an
  assessment of trade in services

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Progressive Liberalization(Part IV)

• Article XXI (Modification of Schedules)
• A Member may modify or withdraw any commitment
  in its schedule, at any time after three years
  (from entry into force)
• Negotiations on compensation with any Member
  whose benefits may be affected
• Compensation on a most-favoured-nation basis
• The Council for Trade in Services shall
  establish procedures for rectification or
  modification of Schedules.

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Development-related Provisions

• Article IV
• Increasing participation of developing countries
  in world trade through negotiated specific
  commitments
• Article V
• Preferential trade agreements must have
  substantial sectoral coverage and eliminate
  substantially all discrimination
• Flexible interpretation in accordance with
  development level
• Possibility of preferential treatment for
  companies owned or controlled by nationals from
  participating developing countries
• Article XII
• Trade restrictions in reaction to serious
  balance-of-payments and external financial
  difficulties
• Recognition of the particular pressure on the
  balance-of-payments of developing countries and
  the need to ensure adequate levels of financial
  reserves, etc.

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Development-related Provisions

• Article XIX
• successive Rounds of negotiation to achieve a
  progressively higher level of liberalization
• Due respect for national policy objectives and
  development levels. Appropriate flexibility for
  developing country Members.
• Annex on Telecommunications
• Developing countries may place reasonable
  restrictions on access to and use of public
  telecommunications transport networks and
  services.