The negotiations on services had three main objectives:
-
To create a multilateral framework of principles and rules for trade
in services, including the elaboration of possible disciplines for
individual sectors
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To expand trade in services under conditions of transparency and
progressive liberalization
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To promote, through trade liberalization, the economic growth of
all trading partners and the development of developing countries.
The General Agreement on Trade in Services (GATS) provides, a set
of multilateral rules for the conduct of services trade, and simultaneously
creates a framework for a continuing process of liberalization. In
this, it resembles the GATT, which is also a multilateral agreement
and a forum for negotiations.
The GATS consists of three components:
-
the Articles of the Agreement which contain general obligations
applicable to all Member countries as well as specific obligations
which may be negotiated by Members for individual sectors or sub-sectors
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annexes dealing with the specificities of particular sectors
(Air transport, Financial Services and Telecommunications) and the
movement of natural persons supplying services
-
the schedules of commitments undertaken by Member countries,
which are annexed to the Agreement and form an integral part of
it.
In addition, as part of the Uruguay Round package, there are a number
of Ministerial Decisions on matters such as institutional arrangements
and dispute settlement, and an Understanding on Financial Services.
The basic elements of the Agreement are:
- complete
coverage of all service sectors with no service activity being exclude
-
an obligation to provide national treatment and market access to
service suppliers of other Members
-
an obligation not to discriminate between service suppliers of other
Members (the MFN obligation
- the
increasing participation in world trade in services for developing
countries.
These principles are applied with considerable flexibility. Members
are free to decide which services will be subject to market access
and national treatment commitments in their national schedules, and
may include limitations on market access and on national treatment
in their schedules. At the entry into force of the Agreement, a Member
may be exempted from its MFN obligations in respect of particular
discriminatory measures that it wishes to maintain.
The Agreement establishes, through national schedules, a first stage
in the binding or liberalization of barriers such as quotas or national
preferences which restrict the freedom of service suppliers to operate
in foreign markets, either through establishment in the market or
cross-border trade or through the presence of personnel supplying
services
The Agreement creates an obligation to undertake successive rounds
of further negotiations, starting no later than five years from its
entry into force. It will be a permanent stimulus to efficiency, openness
and growth in service trade.
Provisions intended to increase the participation of developing countries
in world trade in services permeate the Agreement. From the outset,
developing countries were of the view that their development needs
should be dealt with as an integral part of the Agreement itself.
The Agreement does not contain a separate chapter on special and differential
treatment of developing countries comparable with Part IV of the GATT;
development considerations are taken up throughout the Agreement.
The most explicit and important references to the specific interests
of developing countries appear in Articles IV and XIX. Article IV
is intended to facilitate increasing participation of developing countries
in world trade by providing for negotiation of specific commitments
on:
access to technology on a commercial basis
improved
access to distribution channels and information networks
liberalization
of market access in service sectors and modes of supply which are
of special export interest to them
It also requires developed countries to facilitate access by service
suppliers of developing countries to necessary commercial and technical
information.
Article XIX provides flexibility for developing countries to pursue
their own development priorities and to open fewer sectors or to liberalize
fewer types of transactions in further negotiations, making explicit
their right to extend market access in line with their development
situation. It also recognizes that offers of market access by developing
countries may be subject to conditions relating to the objectives
of Article IV, on such matters as the strengthening of their domestic
services capacity and transferring technology on commercial terms.
Both Article IV and Article XIX call for special consideration to
be given to least-developed countries. The Guidelines for the negotiation
of initial commitments during the Round required that negotiations
have regard to the level of development of each participant, with
a view to achieving a balance of interests and benefits in terms of
Articles IV and XIX. The Guidelines recognized that initial commitments
of developing countries might be less comprehensive than those of
developed countries.
On the export side of market access, the benefits to be derived from
the GATS by developing countries will depend on the level of development
of their service industries and their ability to take advantage of
more open and secure access to foreign markets. Benefits derived will
also depend on the readiness of other countries to provide access
for services and modes of supply where developing countries have comparative
advantage, for example in labour-intensive services.
On the import side, all economies, and perhaps especially those in
which the service sector is weak, stand to benefit from the presence
in the market of efficient and competitive suppliers of services.
Offers of market access which are conducive to inward investment by
foreign service suppliers, may be a very effective means of upgrading
the domestic service economy or even of bringing new services of value
to the rest of the economy into the country.
