As stated in its Preamble,
the GATS is intended to contribute to
trade expansion “under conditions of transparency and progressive
liberalization and as a means of promoting the economic growth of
all trading partners and the development of developing countries”.
Trade expansion is thus not seen as an end in itself, as some
critical voices allege, but as an instrument to promote growth and
development. The link with development is further reinforced by
explicit references in the Preamble to the objective of increasing
participation of developing countries in services trade and to the
special economic situation and the development, trade and financial
needs of the least-developed countries.
The GATS’ contribution to
world services trade rests on two main pillars: (a) ensuring
increased transparency and predictability of relevant rules and
regulations, and (b) promoting progressive liberalization through
successive rounds of negotiations. Within the framework of the
Agreement, the latter concept is tantamount to improving market
access and extending national treatment to foreign services and
service suppliers across an increasing range of sectors. It does
not, however, entail deregulation. Rather, the Agreement explicitly
recognizes governments’ right to regulate, and introduce new
regulations, to meet national policy objectives and the particular
need of developing countries to exercise this right.
considerable degree, the drafters of the GATS took inspiration
from the GATT and used terms and concepts that had already been
tested for decades in merchandise trade. These include the
principles of most-favoured-nation (MFN) treatment and national
treatment. Comparable to its status under the GATT, MFN
treatment — i.e. the obligation not to discriminate between
fellow WTO Members — is an unconditional obligation, which
applies across all services covered by GATS. The tariff
schedules under the GATT, in which countries bind their tariff
concessions on merchandise imports, find their equivalent in
schedules of specific commitments which define the relevant
trade conditions for services.
Reflecting peculiarities of
services trade, however, there are also notable differences in scope
and content between the two agreements.
the GATS covers measures affecting both the product (service)
and the supplier.
The definition of services
trade covers not only cross-border supply, but three additional
forms of transaction (“modes of supply”).
While quota-free entry
(“market access”) and national
treatment are generally applicable obligations under GATT, they
apply under the GATS on a sector-by-sector basis and only to extent
that no qualifications (“limitations”) have been scheduled.
Food for thought:
In your opinion,
why was the GATS necessary?
How does the
purpose of the GATS fit with your national development
economic importance of services production and trade as a result
of technical progress, government retrenchment (privatization,
commercialisation of important services sectors), increased
reliance on market forces in general.
services, in particular in infrastructurally relevant areas
(finance, communication, transport, etc) as determinants of
overall economic efficiency.
impact of multilateral access guarantees on inflows of
investment, skills and expertise.
Possibility to reap
economies of scale and scope within an internationally open services