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that services account for over 60 percent of
global production and employment. All WTO
Members, some 140 economies at present,
signed the GATS.
Thegoal of theGATS is tocreateacredibleand
reliable system of international trade rules;
ensuring fair and equitable treatment of all
participants(principleofnon-discrimination);
stimulating economic activity through
guaranteed policy bindings; and promoting
trade and development through progressive
liberalization.
The GATS does not define the services, but
distinguishes four modes for supplying
services in Article (2/1). Trade in services is
defined as the supply of a service:
-1
Cross-border supply is defined to
cover services flows from the territory of one
Member into the territory of any another
Member (e.g. bankingor architectural services
transmitted via telecommunications or mail.
-2
Consumption abroad refers to
situations where a service consumer (e.g.
tourist or patient) moves into any another
Member›s territory to obtain a service;
-3
Commercial presence implies that
a service supplier of one Member establishes
a territorial presence, including through
ownershiporleaseofpremises,inanyanother
Member›s territory to provide a service (e.g.
domestic subsidiaries of foreign insurance
companies or hotel chains); and
-4
Presence of natural persons consists
of persons of one Member entering the
territory of any another Member to supply a
service (e.g. accountants, doctors or teachers).
In an express provision, the GATS stipulates
in Article (3/1/b) that «services» includes any
service in any sector except services supplied
in the exercise of governmental authority.
According toArticle (3/1/c) «a service supplied
in the exercise of governmental authority»
means any service which is supplied neither
on a commercial basis, nor in competition
with one or more service suppliers. Cases
in point are social security schemes health,
defense, security, monetary policy, taxes,
customs or education, and any other public
service that is provided at non-market
conditions.
The Most-Favored-Nation Treatment is
fundamental principle in the GATS, as is the
case in the GATT and all WTO agreements.
The MFN Treatment stipulates that «With
respect to any measure covered by this
Agreement, each Member shall accord
immediately and unconditionally to services
and service suppliers of any other Member
treatment no less favorable than that it
accords to like services and service suppliers
of any other country,» except for exemptions
allowed before the agreement. Each Member
shall respond promptly to all requests by any
other Member for specific information on
any of its measures of general application or
international agreements.
Article 2 of the GATS stipulates that:
-1
Withrespect toanymeasurecovered
by this Agreement, eachMember 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.
-2
AMember may maintain a measure
inconsistent with paragraph 1 provided
that such a measure is listed in, and meets
the conditions of, the Annex on Article II
Exemptions.
The
GATS
spotlights
on
the
telecommunications services, as it includes
an«AnnexonTelecommunications»,which
greatly affected the world trade system
thanks to the specificities of such vital
sector. The Annex, to be explained later, was
the subject of the first telecommunications
case heard by the WTO Dispute Settlement
Body. Next issue›s article will discuss the
liberalization of telecommunications under
the WTO.
«Views and opinions expressed in this article are those of the
authors and do not necessarily reflect the official viewpoint of the
Telecommunications Regulatory Authority (TRA).»