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GATS

GATS was created to extend trade rules to the services sector when it entered into force in 1995 under the WTO. The agreement aims to progressively liberalize trade barriers across different modes of supply. Key sectors covered include financial, tourism, transportation and education services. Exceptions are made for services supplied by governments and air transport. The four modes of trade under GATS are cross-border supply, consumption abroad, commercial presence, and movement of natural persons supplying a service. Domestic regulations must not be more burdensome than necessary.

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75 views11 pages

GATS

GATS was created to extend trade rules to the services sector when it entered into force in 1995 under the WTO. The agreement aims to progressively liberalize trade barriers across different modes of supply. Key sectors covered include financial, tourism, transportation and education services. Exceptions are made for services supplied by governments and air transport. The four modes of trade under GATS are cross-border supply, consumption abroad, commercial presence, and movement of natural persons supplying a service. Domestic regulations must not be more burdensome than necessary.

Uploaded by

Shivika kaushik
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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BACKGROUND OF GATS:-

General agreement on trade in services (GATS) was one of the


agreements that were signed under the purview of the world trade
organization (WTO) which entered into force in January 1995. the
treaty was created to extend the multilateral.
• All members of WTO are signatories to the GATS.
• While the overall goal of GATS is to remove barriers to trade,
members are free to choose which sectors are to be
progressively that mode of supply would apply to a particular
sector like trade.
• The general agreement on trade in services is bundles of
framework for future liberalization of services trade.
OBJECTIVE OF GATS
• Creating a credible and reliable system of international trade rules.
• Ensuring fair and equitable treatment of all participants ( principle
of non-discrimination).
• Stimulating economic activity through guaranteed policy binding.
• Promoting trade and development through progressive
liberalization.
GATS: SECTORAL COVERAGE AND
EXCEPTION
• Health-related services • Business services
• Financial services • Communication
• Tourism • Construction
• Recreation, culture & sport • Distribution
• Transport • Education
• Other services • Environmental services

 Exceptions
• Services supplied in the exercise of government authority
• Air transport services
MODES OF TRADE

Cross-border supply

Movement of natural
Consumption abroad
persons

Commercial presence
MODE 1- CROSS-BORDER SUPPLY

 Trade takes place from the territory of one country to another


country.
 For example:- (a). Online education and training, (b). Purchase
insurance or computer from a producer located abroad
MODE 2- CONSUMPTION ABROAD

 Services consumed by nationals of a country A in


territory of country B.
 Example- tourism , education or health services.
MODE 3- COMMERCIAL PRESENCE
A service supplier of country A cross the border to
establish and provide a service in country B.
Example – Domestic subsidiaries of foreign insurance
companies or hotel chains.
MODE 4 – MOVEMENT OF NATURAL
PERSON
Temporary movement from country A to B to supply a
service.
Example – doctors moving to another country to
temporarily provide their services.
GATS & PUBLIC SERVICES

• GATS does not apply to services “supplied in the exercise of


government authority”.
• A services is supplied in the exercise of governmental authority
“only when it is supplied neither on commercial basis nor in
competition with one or more service suppliers”.
GATS & DOMESTIC REGULATION

 GATS does not remove a government’s rights to


regulate services in its country
 Government regulation of a services should be “not
more burdensome than necessary to ensure to quality
of service” (possibility of necessity test)

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