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RESEARCH AND ANALYSIS: WORKING PAPERS

Poison in the wine? Tracing GATS-minus commitments in regional trade agreements

Commitments in regional trade agreements (RTAs) that fall short of the same countries' obligations under the General Agreement on Trade in Services (GATS) are a relatively frequent phenomenon.  However, they have gone widely unnoticed in the literature to date and drawn very little attention in relevant WTO fora either.

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Nevertheless, “minus commitments” are potentially poisonous and, for various reasons, would deserve close attention. Given the broad definitional scope of the GATS, extending inter alia to commercial presence, such commitments may impinge upon the rights of third-country investors in the RTA economies. Their existence casts doubts on the legal status of the respective agreements under the GATS and can have severe implications for the trading system overall. If not complemented by comprehensive Most-favoured-Nation clauses, the RTAs concerned are disconnected from the WTO and virtually impossible to multilateralize. Based on a review of some 80,000 commitments in 66 agreements, this study seeks to develop a reasonably comprehensive picture of the frequency of 'minus commitments' and their dosage in terms of sectors, measures and modes of supply. It also discusses potential remedies from a WTO perspective. 

No: ERSD-2012-04

Author:

Rudolf Adlung — WTO and Sébastien Miroudot — OECD

Manuscript date: February 2012

Key Words:

Trade in Services, GATS, Regionalism

JEL classification numbers:

F13, F51, F53, K33, K41, K42

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This is a working paper, and hence it represents research in progress. This paper represents the opinions of the author, and is the product of professional research. It is not meant to represent the position or opinions of the WTO or its Members, nor the official position of any staff members. Any errors are the fault of the author. Copies of working papers can be requested from the divisional secretariat by writing to: Economic Research and Statistics Division, World Trade Organization, Rue de Lausanne 154, CH 1211 Geneva 21, Switzerland. Please request papers by number and title.

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