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THE GATS & ELECTRONIC COMMERCE. Lee Tuthill Trade in Services Division WTO, Geneva www.wto.org. Common to all Short text of Articles - the “Framework” Sectoral and other Annexes. Individual Schedules of Commitments MFN Exemptions (only at outset & if needed). What is GATS?.

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the gats electronic commerce

THE GATS & ELECTRONIC COMMERCE

Lee Tuthill

Trade in Services Division

WTO, Geneva

www.wto.org

what is gats
Common to all

Short text of Articles - the “Framework”

Sectoral and other Annexes

Individual

Schedules of Commitments

MFN Exemptions(only at outset & if needed)

What is GATS?
what is e commerce
What is E-commerce?
  • Customer sits down at a computer or other access device: computer services
  • Logs onto internet: communication services
  • Goes to a web site with promotional information: advertising services
  • Orders a product: distribution services and pays for it: financial services
  • Then can download product or have it mailed to home address: delivery services
internet access a prerequisite
Internet Access - A prerequisite

Source: ITU World Telecommunication Indicators Database

e commerce international trade
E-Commerce & International Trade
  • Allows businesses to raise global awareness of their products and services.
  • Increases awareness by households and industries of foreign products and increase their accessibility
  • Assists nationals in getting a better deal on imported products. Importers will enjoy cost savings comparable to those of domestic producers from use of e-commerce
  • The economy makes better use of existing capital and labour (through technological change) and more capital is invested
  • More employment as a result of increased labour that is made available through greater use of e-commerce
effect on exports
Effect on exports?

Source:E-Commerce - beyond 2000 , Australian National Office for the Information Economy, 1999

gats obligations
GATS Obligations?

If GATS makes no distinction between the different technologies to supply services:

  • Measures affecting electronic delivery, just as for other means of delivery, are covered by GATS
  • Many existing GATS obligations are relevant
  • Often seen as cross-border supply and consumption abroad, e-commerce also used in commercial presence & by natural persons
domestic regulation under gats
Domestic Regulationunder GATS

Traditional approaches to licensing, technical standards, and qualification requirements may need to be adapted to facilitate E-commerce

Examples:

  • Qualification and certification requirements for professional services: Can these be satisfied by non-resident suppliers?
  • Licencing of financial services: How easily can licenses be obtained or adapted for “Net” banking?

Such regulations, not formally considered trade barriers, are subject to a work program to help ensure that they do not hamper trade

gats exceptions
GATS Exceptions

The exceptions touch on many important E-commerce legal issues

GATS (& GATT) cannot override policies to:

  • protect morals or maintain order
  • protect life or health
  • prevent deception & fraud or deal with contract defaults
  • protect individual privacy and confidentiality
  • secure safety
disciplines to reduce trade impact
Disciplines to reduce trade impact

But, the Exceptions must:

  • not be applied in an arbitrary way or that is unjustifiably discriminatory
  • not be used as disguised restrictions on trade, i.e. to achieve closed markets rather than the stated policy goal
  • be “necessary” to achieve the policy objectives sought, i.e. could a less trade restrictive means achieve the desired result?
slide13
GATS Commitments

Top sectors are e-commerce “leaders”

(by number of countries)

tourism over internet
Tourism over Internet?

Business cost of a

travel reservation (US$)

$10.00

$2.00

On-line

Travel agent

Source: Andersen consulting (1998)

on line financial services

Business cost of a typical banking

transaction

On-line financial services?

1.4

1.2

US$1.27

1

0.8

0.6

0.4

Business cost of a brokerage

transaction

US$0.27

0.2

US$0.01

0

Branch

Branch

ATM

ATM

Internet

Internet

160

140

120

100

80

$150

60

$10

40

$69

20

0

Full-

Full-

Discount

Discount

Online

Online

Source: Andersen Consulting

service

service

broker

broker

broker

broker

telecommunications
Telecommunications

To send a 42 page document --

What would you choose?

Cost (US$) Time

Air Mail 7.40 5 days

Courier 26.25 24 hours

Fax 28.83 31 minutes

Internet e-mail 0.095 2 minutes

Source: Northern River Venture cited in ITU Challenges to the Network 1997

the doha round of trade negotiations
The Doha round of trade negotiations?

More

commitments

in e-critical

sectors

Improved

cross border

access

Emerging

economy

interests?

Regulatory

considerations

slide28

Can professional services

go on line?

GATS Commitments

(by number of governments)

slide30

Cross Border AccessGATS Commitments...

(By number of governments)

gats cross border access where do we stand
GATS Cross Border AccessWhere do we stand?

70% or more of industrialized country Members commit to barrier-free access to their markets for cross border supply of:

  • Data processing, software implementation, and other computer-related services
  • Travel agency, tour operator and tourist guide services
  • Professional services such as advertising, architecture and engineering
  • Management consulting and market research
cross border access developing economies
Cross border Access... Developing Economies
  • In tourism services, where by far the greatest number have committed -- 25% list no barriers to cross-border market access for travel agencies and tour operators
  • In most computer services, around 30% have taken commitments -- between 10-13% list no barriers to cross border supply
  • Between 25-35% commit on professional services, such as management consulting, engineering, architecture and accounting -- only 6-7% offer free cross-border access
the doha ministerial declaration
The Doha Ministerial Declaration

“...electronic commerce creates new challenges and opportunities for trade for Members at all stages of development, and we recognize the importance of creating and maintaining an environment which is favourable to the future development of electronic commerce.”

“We agree ...

“… to maintain our current practice of not imposing customs duties on electronic transmissions ...

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