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International Transactions With Services: 6 Course A. Definition B. Classification

This document defines international transactions with services and classifies them. It discusses that international transactions involve the provision of services, movement of goods, labor, or capital across borders. It then summarizes four classifications of international service transactions: 1) Clark's classification based on what crosses borders 2) Sampson and Snape's classification based on consumer-producer interaction. It details the four modes of supply under GATS: cross-border trade, consumption abroad, commercial presence, and presence of natural persons. International transactions with services thus refer not only to cross-border trade but also the movement of consumers, various forms of commercial presence, and movement of suppliers across national borders to engage in transactions.

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Cîrstescu Andreea
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57 views9 pages

International Transactions With Services: 6 Course A. Definition B. Classification

This document defines international transactions with services and classifies them. It discusses that international transactions involve the provision of services, movement of goods, labor, or capital across borders. It then summarizes four classifications of international service transactions: 1) Clark's classification based on what crosses borders 2) Sampson and Snape's classification based on consumer-producer interaction. It details the four modes of supply under GATS: cross-border trade, consumption abroad, commercial presence, and presence of natural persons. International transactions with services thus refer not only to cross-border trade but also the movement of consumers, various forms of commercial presence, and movement of suppliers across national borders to engage in transactions.

Uploaded by

Cîrstescu Andreea
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PPT, PDF, TXT or read online on Scribd
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International Transactions

with Services

6th Course
a. Definition;
b. Classification.
What is an international transaction?

Residents / non-residents • Change in ownership of goods


• Provision of services
INTERNATIONAL • Provision of labour
• Provision of capital
• Change in ownership of financial assets
ITS Classification

1. Terry Clark – identified what crosses the


border:
contact-based services - people (producers or
consumers) cross borders to engage in transactions;
vehicle-based services – communications are directed
into and out of nations via radio, television and
satellite transmissions, wires and/or other facilitating
“vehicles'‘;
asset-based services - where commercial service
ideas tied to foreign direct investment cross borders
to establish an operating platform;
object-based services, physical objects impregnated
with services move into a nation.
ITS Classification
2.) Gary Sampson & Richard Snape
– degree of consumer-producer
interaction

Consumer does not Consumer moves


move

Supplier does not A B


move

Supplier moves C D
ITS Classification - GATS
Mode 1 – cross-border trade / supply – “the
supply of a service from the territory of one Member
into the territory of any other Member”
Situations:
Services embodied in a transportable medium (paper,
computer diskette);
Services transmitted through a tangible support
(transportation);
Digitized services transmitted through telecommunication
links;
COUNTRY A COUNTRY B
Mode 1: service transactions

Consumer The service crosses the border


Supplier
ITS Classification - GATS
Mode 2 – consumption abroad / movement of
consumers - “the supply of a service in the territory
of a Member to the service consumer of any other
Member”
Situations:
Travel;
Ship repair abroad (the property of the consumer moves or
is situated abroad).
COUNTRY A COUNTRY B
Mode 2: service transactions
Consumer The consumer goes abroad Consumer Service
Supplier
ITS Classification - GATS
Mode 3 – commercial presence – “the supply of a
service by a service supplier of one Member, through
commercial presence in the territory of any other
Member”
Situations:
Juridical persons in the strict legal sense + corporations,
joint ventures, partnerships, representative offices,
branches;
The “commercial presence” entity must be owned or
controlled by the entity located in the home country.

COUNTRY A COUNTRY B
Mode 3: service transactions
Consumer Service Foreign Direct investment in country A
Company
ITS Classification - GATS
Mode 4 – presence of natural persons / temporary
presence – “the supply of a service by a service supplier
of a Member, through presence of natural persons of a
Member in the territory of any other Member”
Situations:
self employed individuals – consultants, professors
employees.

COUNTRY A COUNTRY B
Mode 4: service transactions

Consumer Natural Self-employed goes to country A


Service Natural
from A supply person person
or employee sent by firm from B

Mode 4: employment

Service Natural
firm Temporary employment person
ITS

Consequently, the concept of


„international transactions with services”
refers NOT ONLY to
- cross-border trade, but ALSO to:
- movement of consumers
- various forms of commercial
presence
- movement of suppliers

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