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General Agreement on Trade in Services - GATS Structure and Main Elements WTO

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General Agreement on Trade in Services - GATS Structure and Main Elements WTO Trade in Services Division Economic Importance. SERVICES. Share in Production and Employment

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General Agreement on Trade in Services - GATS

Structure and

Main Elements


Trade in Services Division

economic importance
Economic Importance


  • Share in Production and Employment

Between less than 30 to over 70 per cent, depending on resource structure and level of development of an economy

  • Share in Total World Trade

Some 20 percent, on a BOP-basis (does not count the full value of trade through commercially present foreign suppliers)

what is gats
Common to all

Short text of Articles - the “Framework”

Annexes(including on Telecom)


Schedules of Commitments

MFN Exemptions(only at outset & if needed)

What is GATS?

Scope and Definition

Universal Coverage of Services

  • Includes all services except:
    • Services supplied in the exercise of government authority.
    • But only if these are not supplied on a commercial basis or in competition with other service suppliers
  • Covers all measures
    • including those of local and regional governments and non-governmental bodies exercising delegated authority


  • Business and professional
  • Communications, all types
  • Construction
  • Distribution
  • Education
  • Environment
  • Insurance and financial
  • Health and social
  • Tourism
  • Recreation & cultural
  • Transport, all types
  • Other

Scope and Definition



Trade = Modes of Supply

Cross border

Service supplier not present in the territory where services are delivered

Delivery of any services via telephone, fax, Internet, or the post

Consumption abroad

Consumers purchase services outside their country of residence

Tourism, Repair of a ship in another country, Going to a hospital abroad for surgery

Commercial presence

Service supplying entities present in the territory to deliver services

Establishing a bank branch or subsidiary

Any foreign direct investment

Presence of natural persons

Entry and temporary stay of individual persons to supply services

1. Consultant services, Professional or business travel

2. Also, foreign employees of a firm supplying services


General Obligations & Disciplines

The different types

  • Obligations
    • Applying generally to all services, whether or not scheduled
    • Applicable only to services listed in schedules
  • Exceptions
    • Containing relevant disciplines to ensure that they are not abused

General Obligations & Disciplines

Across the Board

  • Most Favoured Nation Treatment(no discrimination among Members or preferences to non Members)
  • Transparency (publication of measures)
  • Domestic Regulation(mechanisms for appeal of administrative decisions)
  • Recognition (of licenses and certifications and licensing and qualification criteria)
  • Monopolies & exclusive providers (prevent actions affecting MFN obligation)
  • Business Practices(consultations on anti-competitive practices of companies)
most favoured nation treatment mfn is critical it is what makes the wto truly multilateral
Most-Favoured-Nation TreatmentMFN is critical - it is what makes the WTO truly multilateral

General Obligations & Disciplines

“… 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” (Article II:1)


General Obligations & Disciplines


Applies to all services, whether or not listed in schedules

Make publicly available all measures affecting trade in services

  • Includes all relevant laws, regulations, licensing procedures & criteria, technical requirements, etc.

General Obligations & Disciplines

Applied to committed services

  • Transparency (notification of new or revised measures to WTO)
  • Domestic Regulation(requirements, criteria & standards to be objective, publicly known and not unnecessarily onerous, procedures not restrictive, implement measures impartially, promptly inform applicants for licenses or other authorizations)
  • Monopolies & exclusive providers (prevent actions adversely affecting commitments)
  • Payments & Transfers(no restrictions affecting commitments)
general obligations disciplines
General Obligations & Disciplines

Domestic regulation

  • Reasonable, objective and impartial implementation of all measures related to committed services
  • Licensing procedures and criteria, technical standards and qualification requirements should be objective, transparent and not more burdensome than necessary
    • Subject to ongoing negotiations to develop specific disciplines

General Obligations & Disciplines


  • Regional or Bilateral economic integration & labour market integration agreements
  • Restrictions on the balance of payments
  • General & security exceptions
  • Financial services: prudential measures (Annex)

General Obligations & Disciplines

Example: General Exceptions

GATS permits measures

  • to achieve policy objectives such as protection of public morals and the maintenance of public order
  • to protect privacy of personal data, confidentiality of individual records, and to prevent fraud

The measures must not be more restrictive than necessary, applied in an arbitrary way, discriminate unjustifiably or be used as a disguised restriction


General Obligations & Disciplines

To be negotiated

  • Disciplines on domestic regulation
  • Emergency Safeguard Measures
  • Government Procurement
  • Subsidies

Specific Commitments

Listed in Schedules

Defined in GATS Part III (Arts. XVI, VXII & XVIII

  • Market Access
  • National Treatment
  • Additional Commitments
  • Listed in Schedules by service and modes of supply
  • Indicates each Member’s legally bound guarantee of specified minimum levels of access or national treatment
  • Schedules do not bind laws or regulations as such

GATS Annexes

Types of Annexes

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

GATS Annexes

Annex on Telecom

  • Applies to measures affecting access to and use of public basic telecom networks and services
  • General obligation to ensure that suppliers of scheduled services are guaranteed reasonable and non-discriminatory access to and use
  • Allows reasonable conditions on access and use, in order to meet specified public policy objectives
  • Permits developing countries to depart from the obligations by indicating such in the schedule of commitments
increasing participation of developing countries
Increasing Participation ofDeveloping Countries
  • General requirement:

Increasing participation of developing countries in world trade through specific commitments that:

      • strengthen services capacity and efficiency,
      • improve access to distribution channels,
      • liberalize markets of export interest
  • Contact points to facilitate information access
  • Special priority for least developed countries
what has been achieved to date
What has been Achieved to date?
  • GATS is considered a reliable and predictable framework for facilitating trade andforeign investment in services
  • It has been widely perceived by developing countries as a positive development in the multilateral trade framework
  • Many commitments have been overtaken by further reforms and liberalization in both developed and developing countries