The General Agreement on Trade in Services (GATS) is a treaty of the World Trade Organization (WTO) which entered into force in January 1995 as a result of the Uruguay Round negotiations. The treaty was created to extend the multilateral trading system to service sector, in the same way the General Agreement on Tariffs and Trade (GATT) provides such a system for merchandise trade.
All members of the WTO are parties to the GATS. The basic WTO principle of most favoured nation (MFN) applies to GATS as well. However, upon accession, members may introduce temporary exemptions to this rule.
While the overall goal of GATS is to remove barriers to trade, members are free to choose which sectors are to be progressively "liberalised" (i.e. marketised and privatised); which mode of supply would apply to a particular sector; and to what extent that "liberalisation" will occur over a given period of time. Members' commitments are governed by a ratchet effect: commitments are one-way and are not to be wound back once entered into. The reason for the rule is to create a stable trading climate (i.e. a market). However, Article XXI allows members to withdraw commitments, and so far two members have exercised the option (US and EU). In November 2008, Bolivia gave a notification that it will withdraw its health services commitments.
Some activist groups consider that GATS risks undermining the ability and authority of governments to regulate commercial activities within their own boundaries, with the effect of ceding power to business interests ahead of the interests of citizens. In 2003, the GATSwatch network published a critical statement supported by over 500 organisations in 60 countries.[1] At the same time, countries are not under any obligation to enter international agreements such as GATS. For countries that like to attract trade and investment, GATS adds a measure of transparency and legal predictability. Legal obstacles to services trade can have legitimate policy reasons, but they can also be an effective tool for large scale corruption.[2]
Four modes of supplyedit
The GATS agreement covers four modes of supply for the delivery of services in cross-border trade:[3]
Mode
Criteria
Supplier Presence
Mode 1: Cross-border supply
Service delivered within the territory of the Member, from the territory of another Member
Service supplier not present within the territory of the Member
Mode 2: Consumption abroad
Service delivered outside the territory of the Member, in the territory of another Member, to a service consumer of the Member
Mode 3: Commercial presence
Service delivered within the territory of the Member, through the commercial presence of the supplier
Service supplier present within the territory of the Member
Mode 4: Presence of a natural person
Service delivered within the territory of the Member, with supplier present as a natural person
Sectors addressededit
Services sector classifications addressed in the GATS are defined in the so-called "W/120 list" or Services Sectoral Classification List,[4] which provides a list of all sectors which can be negotiated under the agreement. The title refers to the name of the official WTO document, MTN.GNS/W/120. There are twelve service sectors (Business; Communication; Construction and Engineering; Distribution; Education; Environment; Financial; Health; Tourism and Travel; Recreation, Cultural, and Sporting; Transport; and "Other") divided into sub-sectors.[5]
The agreement's Annex on Movement of Natural Persons Supplying Services Under the Agreement distinguishes the "movement of natural persons" for the provision of services from natural persons' movement aiming to secure access to an overseas employment market.[6] Movement of natural persons for services purposes is seen as essentially "temporary".[7]
Criticismsedit
The GATS agreement has been criticized for tending to substitute the authority of national legislation and judiciary with that of a GATS Disputes Panel conducting closed hearings. WTO member-government spokespersons are obliged to dismiss such criticism because of prior commitment to perceived benefits of prevailing commercial principles of competition and 'liberalisation'.
While national governments have the option to exclude any specific service from liberalisation under GATS, they are also under pressure from international business interests to refrain from excluding any service "provided on a commercial basis". Important public utilities such as water and electricity most commonly involve purchase by consumers and are thus demonstrably "provided on a commercial basis". The same may be said of many health and education services which are sought to be 'exported' by some countries as profitable industries.[8]
This definition defines virtually any public service as being "provided on a commercial basis" and is already extending into such areas as police, the military, prisons, the justice system, public administration, and government. Over a fairly short time perspective, this could open up for the privatisation or marketisation of large parts, and possibly all, of what today are considered public services currently available for the whole population of a country as a social entitlement, to be restructured, marketised, contracted out to for-profit providers, and eventually fully privatised and available only to those who can pay for them. This process is currently far advanced in most countries, usually (and intentionally) without properly informing or consulting the public as to whether or not this is what they desire.
^. Archived from the original on 10 April 2016. Retrieved 17 August 2007.
^De Soto, Hernando. The Mystery of Capital: Why Capitalism Triumphs in the West and Fails Everywhere Else
^From the document MTN.GNS/W/124, available on the World Trade Organization website, posted courtesy of ISTIA
^WTO, Services Sectoral Classification List, published 10 July 1991, accessed 23 April 2020
^Petersmann; van Loon; Patel (1 December 2017). Collected Courses of the Xiamen Academy of International Law, Volume 11 (2017): Xiamen Academy of International Law Summer Courses, July 27–31, 2015. BRILL. p. 16. ISBN978-90-04-35530-9.
^WTO, Annex on Movement of Natural Persons Supplying Services Under the Agreement, accessed 29 May 2023
^Butkeviciene, J., Temporary movement of natural persons (mode 4) under the GATS, UNCTAD, accessed 29 May 2023
^For example, in 2003 the Confederation of University Faculty Associations of British Columbia urged the Government of Canada to specify exclusion of post-secondary education, saying in a submission that "If GATS were applied to the Canadian education sector, the effects would be profound. Education would no longer be considered a public service; instead it would be categorized as merely another commercial enterprise." Source: Background Paper on GATS and Post-secondary Education 28 September 2007 at the Wayback Machine
Further readingedit
Text of the General Agreement on Trade in Services [wto.org]
Barlow, M. "The Last Frontier", The Ecologist Vol 31 No 1
Clift, R. Background Paper on the General Agreement on Trade in Services and Post-Secondary Education in Canada,
GATS, Privatisation, and Health
October 27, 2023
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The General Agreement on Trade in Services GATS is a treaty of the World Trade Organization WTO which entered into force in January 1995 as a result of the Uruguay Round negotiations The treaty was created to extend the multilateral trading system to service sector in the same way the General Agreement on Tariffs and Trade GATT provides such a system for merchandise trade All members of the WTO are parties to the GATS The basic WTO principle of most favoured nation MFN applies to GATS as well However upon accession members may introduce temporary exemptions to this rule Contents 1 Historical background 2 Four modes of supply 3 Sectors addressed 4 Criticisms 5 See also 6 References 7 Further readingHistorical background editWhile the overall goal of GATS is to remove barriers to trade members are free to choose which sectors are to be progressively liberalised i e marketised and privatised which mode of supply would apply to a particular sector and to what extent that liberalisation will occur over a given period of time Members commitments are governed by a ratchet effect commitments are one way and are not to be wound back once entered into The reason for the rule is to create a stable trading climate i e a market However Article XXI allows members to withdraw commitments and so far two members have exercised the option US and EU In November 2008 Bolivia gave a notification that it will withdraw its health services commitments Some activist groups consider that GATS risks undermining the ability and authority of governments to regulate commercial activities within their own boundaries with the effect of ceding power to business interests ahead of the interests of citizens In 2003 the GATSwatch network published a critical statement supported by over 500 organisations in 60 countries 1 At the same time countries are not under any obligation to enter international agreements such as GATS For countries that like to attract trade and investment GATS adds a measure of transparency and legal predictability Legal obstacles to services trade can have legitimate policy reasons but they can also be an effective tool for large scale corruption 2 Four modes of supply editThe GATS agreement covers four modes of supply for the delivery of services in cross border trade 3 Mode Criteria Supplier PresenceMode 1 Cross border supply Service delivered within the territory of the Member from the territory of another Member Service supplier not present within the territory of the MemberMode 2 Consumption abroad Service delivered outside the territory of the Member in the territory of another Member to a service consumer of the MemberMode 3 Commercial presence Service delivered within the territory of the Member through the commercial presence of the supplier Service supplier present within the territory of the MemberMode 4 Presence of a natural person Service delivered within the territory of the Member with supplier present as a natural personSectors addressed editServices sector classifications addressed in the GATS are defined in the so called W 120 list or Services Sectoral Classification List 4 which provides a list of all sectors which can be negotiated under the agreement The title refers to the name of the official WTO document MTN GNS W 120 There are twelve service sectors Business Communication Construction and Engineering Distribution Education Environment Financial Health Tourism and Travel Recreation Cultural and Sporting Transport and Other divided into sub sectors 5 The agreement s Annex on Movement of Natural Persons Supplying Services Under the Agreement distinguishes the movement of natural persons for the provision of services from natural persons movement aiming to secure access to an overseas employment market 6 Movement of natural persons for services purposes is seen as essentially temporary 7 Criticisms editThe GATS agreement has been criticized for tending to substitute the authority of national legislation and judiciary with that of a GATS Disputes Panel conducting closed hearings WTO member government spokespersons are obliged to dismiss such criticism because of prior commitment to perceived benefits of prevailing commercial principles of competition and liberalisation While national governments have the option to exclude any specific service from liberalisation under GATS they are also under pressure from international business interests to refrain from excluding any service provided on a commercial basis Important public utilities such as water and electricity most commonly involve purchase by consumers and are thus demonstrably provided on a commercial basis The same may be said of many health and education services which are sought to be exported by some countries as profitable industries 8 This definition defines virtually any public service as being provided on a commercial basis and is already extending into such areas as police the military prisons the justice system public administration and government Over a fairly short time perspective this could open up for the privatisation or marketisation of large parts and possibly all of what today are considered public services currently available for the whole population of a country as a social entitlement to be restructured marketised contracted out to for profit providers and eventually fully privatised and available only to those who can pay for them This process is currently far advanced in most countries usually and intentionally without properly informing or consulting the public as to whether or not this is what they desire See also editEuropean Services Forum Foreign Affiliate Trade Statistics Trade in Services Trade in Services Statistics World Development Movement World Trade OrganizationReferences edit GATSwatch 2003 Archived from the original on 10 April 2016 Retrieved 17 August 2007 De Soto Hernando The Mystery of Capital Why Capitalism Triumphs in the West and Fails Everywhere Else From the document MTN GNS W 124 available on the World Trade Organization website posted courtesy of ISTIA WTO Services Sectoral Classification List published 10 July 1991 accessed 23 April 2020 Petersmann van Loon Patel 1 December 2017 Collected Courses of the Xiamen Academy of International Law Volume 11 2017 Xiamen Academy of International Law Summer Courses July 27 31 2015 BRILL p 16 ISBN 978 90 04 35530 9 WTO Annex on Movement of Natural Persons Supplying Services Under the Agreement accessed 29 May 2023 Butkeviciene J Temporary movement of natural persons mode 4 under the GATS UNCTAD accessed 29 May 2023 For example in 2003 the Confederation of University Faculty Associations of British Columbia urged the Government of Canada to specify exclusion of post secondary education saying in a submission that If GATS were applied to the Canadian education sector the effects would be profound Education would no longer be considered a public service instead it would be categorized as merely another commercial enterprise Source Background Paper on GATS and Post secondary Education Archived 28 September 2007 at the Wayback MachineFurther reading editText of the General Agreement on Trade in Services wto org Barlow M The Last Frontier The Ecologist Vol 31 No 1 Clift R Background Paper on the General Agreement on Trade in Services and Post Secondary Education in Canada cufa bc ca GATS Privatisation and Health World Development Movement Union Network International Retrieved from https en wikipedia org w index php title General Agreement on Trade in Services amp oldid 1157496916, wikipedia, wiki, book, books, library,
