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What is general agreement on trade in services?

What is general agreement on trade in services?

  • Enhanced “trade-ability” of services ƒ
  • A landmark achievement of the Uruguay Round (1995) ƒ
  • Aim: To establish a multilateral framework to promote orderly and transparent trade and investment liberalization in services ƒ
  • Comprehensive legal framework of rules and disciplines covering 12 classified sectors with 160 sub-sectors ƒ The GATS defines services trade as occurring via four modes of supply –

Mode 1: Cross border delivery

Mode 2: Consumption abroad

Mode 3: Commercial presence

Mode 4: Movement of natural persons ƒ

Obligations under GATS: –

  • General obligations (MFN, Transparency)
  • Specific commitments (Market Access, National Treatment) ƒ

Voluntary and flexible commitment structure:

– Flexibility in choosing sectors to table for negotiations and in type of commitments made

– No compulsion to open up a sector or a particular mode of supply

– Attempt to balance between commercial interests and public policy concerns

– Flexibility to developing countries

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