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General Agreement on Trade in Services Members


The presentation of the present report is structured as follows: section II deals with general principles and obligations, including dispute settlement and institutional rules. Section III analyses, sector by sector, the specific sectoral provisions of the annexes, decisions, declarations and cartels. Sections IV and V contain some brief comments on the schedules of commitments and the exemption schedules of the most favoured countries, respectively. By making commitments in their annexes to liberalise trade in certain services sectors in one or more of the four types of supplies, the governments of the Member States “bind” these obligations, with customs duties being bound under gatt. They may be amended or withdrawn only after negotiations with other Contracting Parties. These negotiations usually involve compensation in the form of trade concessions of similar value. These ongoing negotiations on services were included in the Doha Development Agenda launched in November 2001 by the Fourth Minister of the WTO in Doha, Qatar. The Doha Declaration endorses the work already done, reaffirms the negotiating guidelines and procedures and sets out some key elements of the timetable, including the deadline of 30 June 2002 for the submission of market access requests and initial tenders until 31 March 2003, while maintaining the current rules and other issues in the subsidiary bodies of the Council. Only less than 1/3 of all members have submitted inquiries and offers at this time. The deadline for the outcome of the Doha Round is January 2005. Members are free to adjust the sector coverage and content of these obligations at their discretion. Commitments therefore tend to reflect the relevant objectives and objectives of national policies as a whole and in each sector.

While some members have provided fewer than a handful of services, others have adopted market access and national treatment disciplines in more than 120 of the 160 services. However, the annexes were only a first step in the complex process of liberalization of trade in services, and many countries continue to impose restrictions and conditions on both market access and national treatment. These restrictions are set out in each country`s calendar. The ongoing GATS negotiations on services aim to remove these restrictions and conditions. The general framework of the GATS consists of a preamble and 28 articles, followed by eight annexes, eight ministerial declarations and decisions, and a “memorandum of understanding” on financial services. Most annexes contain specific provisions for specific sectors, while declarations and decisions concern general institutional issues such as the establishment of working groups, work programmes, mandates, etc. Individual country schedules for commitments and a consolidated timetable for the European Union are summarized in an “annex” to the conceptual framework. Several countries have also submitted lists of exemptions for the most favoured countries and their timetables.

Finally, certain instruments outside the GATS, such as the Dispute Settlement Agreement and certain institutional provisions of the WTO Agreement itself, are also considered part of the WTO package. One of the main provisions of the GATS relating to national rules is Article VI(4), which deals with qualification requirements and procedures, technical standards and approval requirements. In order to ensure that measures taken in these three areas do not constitute unnecessary barriers to trade in services, the GATS requires that these requirements be based on objective and transparent criteria and not be “more onerous than necessary to ensure the quality of service”. The GATS stipulates that signatory governments shall not apply licensing requirements or technical standards in a manner that nullifies or undermines their commitments under the Agreement. It also encourages the governments of the Member States to open negotiations on the mutual recognition of the educational qualifications of service providers. The existence of specific commitments leads to other commitments concerning, inter alia, the notification of new measures with a significant impact on trade and the avoidance of restrictions on international payments and transfers. While services currently account for more than two-thirds of global output and employment, they account for no more than 25% of total trade, as measured by the balance of payments. However, this proportion – apparently modest – should not be underestimated. Balance of payments statistics do not cover one of the modes of supply of services defined in the GATS, namely supply by commercial presence in another country (mode 3).

In addition, services, although increasingly traded independently, also serve as crucial inputs for the production of goods and, therefore, services, measured in terms of value added, account for about 50% of world trade. The GATS, like all other Uruguay Round agreements, is an annex to the Agreement Establishing the World Trade Organization (WTO). It therefore does not have its own signature and ratification process, but enters into force at the same time as the WTO Agreement and all other annexes. There is no GATS opt-out: those who want to benefit from the other elements of the Uruguay Round must also comply with the GATS. The GATS allows Members to introduce or maintain measures in certain circumstances that are contrary to their obligations under the Convention, including most-favoured-nation or specific obligations. The relevant article covers, inter alia, the measures necessary to: While national governments have the possibility to exclude any particular service from liberalization under the GATS, they are also under pressure from international trade interests not to exclude services that are “supplied on a commercial basis”. Large utilities such as water and electricity are generally associated with consumer purchase and are therefore clearly “commercially supplied”. The same goes for many health and education services that are supposed to be “exported” by some countries as profitable industries. [6] Some activist groups believe that the GATS could undermine the ability and authority of governments to regulate commercial activities within their own borders, resulting in the transfer of power to commercial interests before the interests of citizens. In 2003, the GATSwatch network issued a critical statement supported by more than 500 organizations in 60 countries. [1] At the same time, countries are not required to conclude international agreements such as the GATS […].

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