- Existing Multilateral

Disciplines on Trade in Services

The General Agreement
on Trade in Services
(GATS)

First agreement of multilateral and

legally-enforceable rules aimed at
the liberalisation of trade in services.

Key Features of GATS

Progressive liberalisation of trade in services

Basic principles inspired in disciplines applied to
trade in goods
Specific commitments are to be bargained for,
much like tariff bindings and rates in the GATT.
Institutional Provisions: Similar to trade in goods
Annexes: Sectorial commitments.

Structure, Principles and Rules of

the GATS

Scope and Definition

General Obligations and Disciplines
Specific Commitments
Progressive Liberalization
Institutional provisions
Final Provisions
Annexes: Article II exemptions, Movement of natural

persons, Air
Transport, Financial Services, Second Annex on Financial Services, Annex on
Negotiations on Maritime Transport , Annex on Telecommunications, Annex
on Negotiations on basic Telecommunications.

Scope and Definition

Article I

Trade in services:

From the territory of one Member into the territory of other

Member
In the territory of one Member to a service consumer of any
other Member
By a service supplier of one Member, through commercial
presence in the territory of another Member
By a service supplier of one Member through the presence of
natural persons of a Member in the territory of another
Member
Applies to all measures at every level of government and
non-governmental bodies in the exercise of delegated
powers, except services provided in the exercise of
governmental authority and most air transport . (General
Exceptions: Article XIV, Security Exceptions: Article XIV
bis)

General Obligations
Most-Favoured-Nation treatment (Art.II)

Annex on Article II exemptions

Economic Integration (Article V)

Transparency (Article III): publication,
notification, enquiry points.

Increasing Participation of Developing

Countries (Art. IV): Negotiated best
endeavour clause - shall be facilitated
through negotiated specific commitments

Key Features of GATS

Disciplines
Four modes of supply of services,
For each mode of supply, a country can
offer either a full or partial commitment
Transparency provisions
Avoidance of Restrictions on Foreign
Investment
Provisions pertaining to individual Sectors
Market Access

General Disciplines

Recognition of standards, authorization, licensing or

certification (Article VII): adequate opportunity to
negotiate agreements, non-discrimination.
Monopolies and Exclusive Services Suppliers (Article
VIII): assure behaviour consistent with Article II and
specific commitments.
Business Practices (Article IX): provides for consultations
with a view of eliminating competition and trade
restricting practices.
Restrictions to safeguard Balance of payments (Article
XII)

Specific Commitments
Adopted through negotiations under Article XIX,
positive listing provides for inscribing reservations.
Market Access (Article XVI)

National Treatment (Article XVII)

Additional Commitments (Article XVIII)

Inscribed in the Schedules of Specific Commitments Article
XX, possible modification of schedules as provided by
Article XXI
Negotiations shall respect national policy objectives, take
account of levels of development, there shall be appropriate
flexibility for developing countries, right to regulate
quaranteed.

Disciplines Related to Specific

Commitments

Domestic Regulation (Article VI)

non-discriminatory measures administered
in a reasonable, objective and impartial
manner. Negotiations of disciplines on DR
(VI:4)

Payments and Transfers (Article XI)

Special and Differential Treatment

for developing countries in GATS

Preamble: GATS should be applied in a way

that facilitates the participation of
developing countries in trade in services
and their expansion of service exports.

Article V: More favourable treatment may

be granted to firms of developing countries
that are members of a regional trade
agreement.

Special and Differential Treatment

for developing countries in GATS

Article IV: Developed countries are committed to

establish contact points to facilitate access to
information.

More development-oriented approach than previous

Multilateral Agreements. Market Access and
National Treatment are negotiated concessions.
Positive List: Art. XIX.

Regional Integration

Article V recognises the rights of Members

to be part of agreements that liberalise trade
in services. When only developing
countries are involved, it is explicitly
recognised that more favourable treatment
may be granted to firms from these
countries. (See attached power point
presentation)

Unfinished Business: The built in

agenda
Rule-Making
o Emergency safeguard Measures (Article X)
o Government Procurement (Article XIII)
o Subsidies (Article XV)
Domestic Regulation (Article VI:4)

The Unfinished Agenda

cross-cutting issues (rules)

sectoral agreements

functional policy areas such as labour

mobility.