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General Agreement On Trade in Services

The General Agreement on Trade in Services (GATS) is a multilateral agreement that aims to extend the principles of trade liberalization to the service sector. It covers four modes of supply and includes general obligations of most-favored-nation treatment, transparency, and domestic regulation as well as specific commitments on market access and national treatment that WTO members undertake. GATS seeks to promote trade in services through progressive liberalization and aims to contribute to economic growth and development among trading partners.

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122 views15 pages

General Agreement On Trade in Services

The General Agreement on Trade in Services (GATS) is a multilateral agreement that aims to extend the principles of trade liberalization to the service sector. It covers four modes of supply and includes general obligations of most-favored-nation treatment, transparency, and domestic regulation as well as specific commitments on market access and national treatment that WTO members undertake. GATS seeks to promote trade in services through progressive liberalization and aims to contribute to economic growth and development among trading partners.

Uploaded by

Darshan Thakor
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© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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General Agreement on

Trade in Services
Group 7
Submitted By :
Anurag prateek - 10
DIPANKAR SINGHAL 21
Maneendra Shukla - 32
Rajat seth - 43
Thakor Darshan - 53
Service sector
Service sector is largest and fastest growing sector
of world economy
Service sector is the most dynamic segment of
international trade
Service sector represents 60% of global production
and employment
But Service sector represents only 20% of world
trade
Developing countries strongly participate in Service
sector growth
Historical Background

First Multilateral trade agreement to cover trade in services


Uruguay round of negotiations happened from1986-93
Implemented after successful completion of Uruguay round
of negotiations
All members of the WTO became parties to the GATS after
its implementation
Need for GATS
Traditional Paradigm Shift
Emergence of internet helped
From Hotels to personal to create internationally
services- domestic activities tradable product in two
Telecom, Rails Government decades
ownership and control Example:-From e-banking,
Health, education and basic tele-health and distance
learning
insurance services-
Government responsibilities, It reflects change in basic
and tightly regulated attitudes and thus traditional
framework proved
inappropriate
Objectives of GATS

Creating a credible and reliable system of


international trade rules;
Ensuring fair and equitable treatment of all
participants (principle of non-discrimination);
Enhancing economic activity through guaranteed
policy bindings;
Promoting trade and development through
progressive liberalization.
GATS

Due to continued momentum of world


services trade, need for internationally
recognized rules became important
GATS is a complex web of rights, obligations,
exemptions and specific commitments
Broad scope of application of most measures
imposed by Government
GATS
Also covered certain exception of services
General obligations apply to all measures affecting
trade in services
Example:- MFN and Transparency
Other key obligation such as market access and
national treatment apply only when and if member
decided to make specific commitments
Preamble of the GATS
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"
Modes of supply under GATS
Mode Criteria
1 Service delivered within the territory of the member from
the territory of another Member
2 Service delivered outside the territory of the member in the
territory of other member to a service consumer of the
member
3 Service delivered within the territory of the member
through commercial presence of supplier
4 Service delivered within the territory of the member with
the supplier present as a natural person
Core Service Sector
1. Business services (including professional services and computer services)
2. Communication services
3. Construction and related engineering services
4. Distribution services
5. Educational services
6. Environmental services
7. Financial services (including insurance and banking)
8. Health-related and social services
9. Tourism and travel-related services
10. Recreational, cultural and sporting services
11. Transport services
GATT vs GATS
To a considerable degree drafters of GATS took inspiration
from GATT as it includes MFN, NT,
There are notable differences in scope and content between
these two
a) Unlike the GATT, the GATS covers measures affecting both
the product (service) and the supplier
b) The definition of services trade covers not only cross-
border supply, but three additional forms of transaction
(modes of supply)
c) While quota-free entry (market access) and national
Obligations of GATS (GENERAL)
1. Most Favoured Nation (MFN) 2. Transparency
Treatment

GATS Members are


This requires equal and consistent required, to publish all
treatment of all foreign trading measures of general
partners. It means: application

Providing equal opportunities in


And establish national
that sector for all foreign service
providers. enquiry points mandated to
respond to other Member's
mutual exclusive treatment for all
information requests.
service providers
Obligations of GATS (Specific)
1. National Treatment 2.Market Access:Market
access is a negotiated
commitment in specified sectors.
It requires equal treatment
for foreign providers and
domestic providers. For example, limitations may be
imposed on the number of
Once a foreign supplier has services suppliers, service
been allowed to supply a operations or employees in the
service in ones country sector; the value of transactions;
there should be no the legal form of the service
discrimination in treatment supplier; or the participation of
between the foreign and foreign capital.
domestic providers.
Future Negotiations

To extend the number and extent of


commitments made.
To remove existing limitations on current
commitments
To bind commitments so that they cannot
be reversed.
THANK YOU

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