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GATS TRAINING MODULE: CHAPTER 2

Main Building Blocks: Agreement, Annexes, and Schedules

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2.2 Unconditional General Obligations

Domestic Regulation

Under Article VI:2, Members are committed to operating domestic mechanisms (“judicial, arbitral or administrative tribunals or procedures”) where individual service suppliers may seek legal redress. At the request of an affected supplier, these mechanisms should provide for the “prompt review of, and where justified, appropriate remedies for, administrative decisions affecting trade in service”.

Monopolies

Article VIII:1 requires Members to ensure that monopolies or exclusive service providers do not act in a manner inconsistent with the MFN obligation and commitments. Article XXVIII(h) specifies, in turn, that a “monopoly supplier” is an entity that has been established by the Member concerned, formally or in effect, as the sole supplier of a service.

Business Practices

Article IX refers to business practices other than those falling under the monopoly-related provisions of Article VIII that restrain competition and thereby restrict trade. The Article requires each Member to consult with any other Member, upon request, with a view to eliminating such practices.

Subsidies

Members that consider themselves adversely affected by subsidies granted by another Member may request consultations under Article XV:2. The latter Member is called upon to give sympathetic consideration to such requests.

Food for Thought:

1. Which monopolies in your economy fall within the scope of Article VIII:1 of the GATS?
    
2. What types of subsidies could restrict or distort trade in services?
    

Possible reply:

1. Voice telephony, postal services, rail and road transport, etc.
    
2. Producer subsidies with import-substituting or export-enhancing effects.
    

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