Introduction
Back
to top
At
the time of the signature of the Final Act of the Uruguay
Round, on 15 April 1994, 95 schedules of specific
commitments in services and 61 lists of derogations from
the MFN principle had been submitted and agreed.
It
is only by reference to a country's schedule, and (where
relevant) its MFN exemption list, that it can be seen to
which services sectors and under what conditions the
basic principles of the GATS -market access, national
treatment and MFN treatment — apply within that
country's jurisdiction. The schedules are complex
documents in which each country identifies the service
sectors to which it will apply the market access and
national treatment obligations of the GATS and any
exceptions from those obligations it wishes to maintain.
The commitments and limitations are in every case entered
with respect to each of the four modes of supply which
constitute the definition of trade in services in
Article I of the GATS: these are cross-border
supply; consumption abroad; commercial presence; and
presence of natural persons:
Cross-border
supply — the possibility for non-resident
service suppliers to supply services cross-border into
the Member's territory.
Consumption
abroad — the freedom for the Member's residents
to purchase services in the territory of another Member.
Commercial
presence — the opportunities for foreign service
suppliers to establish, operate or expand a commercial
presence in the Member's territory, such as a branch,
agency, or wholly-owned subsidiary.
Presence
of natural persons — the possibilities offered
for the entry and temporary stay in the Member's
territory of foreign individuals in order to supply a
service.
In
order to determine the real level of market access
represented by a given schedule it is therefore necessary
to examine the range of activities covered in each
service sector and the limitations on market access and
national treatment pertaining to the different modes of
supply. In addition, in cases where a country has also
tabled a list of MFN exemptions, this must be examined in
order to assess the extent to which the country gives
preferential treatment to, or discriminate against, one
or more of its trading partners.
The
purpose of this introduction is to assist users to read
and interpret the schedules and exemption lists and to
assess their commercial significance.
A. Schedules of specific commitments
Back
to top
A
specific commitment in a services schedule is an
undertaking to provide market access and national
treatment for the service activity in question on the
terms and conditions specified in the schedule. When
making a commitment a government therefore binds the
specified level of market access and national treatment
and undertakes not to impose any new measures that would
restrict entry into the market or the operation of the
service. Specific commitments thus have an effect similar
to a tariff binding — they are a guarantee to
economic operators in other countries that the conditions
of entry and operation in the market will not be changed
to their disadvantage. Commitments can only be withdrawn
or modified after the agreement of compensatory
adjustments with affected countries, and no withdrawals
or modifications may be made until three years after
entry into force of the Agreement. Such modifications of
commitments may not affect the application of
most-favoured-nation (MFN) treatment. Commitments can
however be added or improved at any time.
The
national schedules all conform to a standard format which
is intended to facilitate comparative analysis. For each
service sector or sub-sector that is offered, the
schedule must indicate, with respect to each of the four
modes of supply, any limitations on market access or
national treatment which are to be maintained. A
commitment therefore consists of eight entries which
indicate the presence or absence of market access or
national treatment limitations with respect to each mode
of supply. The first column in the standard format
contains the sector or subsector which is the subject of
the commitment; the second column contains limitations on
market access; the third column contains limitations on
national treatment. In the fourth column governments may
enter any additional commitments which are not subject to
scheduling under market access or national treatment.
In
nearly all schedules, commitments are split into two
sections: First, “horizontal” commitments which
stipulate limitations that apply to all of the sectors
included in the schedule; these often refer to a
particular mode of supply, notably commercial presence
and the presence of natural persons. Any evaluation of
sector-specific commitments must therefore take the
horizontal entries into account. In the second section of
the schedule, commitments which apply to trade in
services in a particular sector or subsector are listed.
The
terminology used in schedules has also been standardized
wherever possible. What follows is a description of the
information which has to be inscribed in each column of
the schedules and a summary of the terminology used.
The
information that is entered in the columns
Sector
or sub-sector column: this column contains a clear
definition of the sector, subsector or activity that is
the subject of the specific commitment. Members are free,
subject to the results of their negotiations with other
participants, to identify which sectors, subsectors or
activities they will list in their schedules, and it is
only to these that the commitments apply. It will be seen
that committed sectors are sometimes very broad, as in
“banking and other financial services” and
sometimes very narrow, as in “noise abatement
services”.
In
the great majority of schedules the order in which the
sectors are listed corresponds to the GATT Secretariat
classification which lists twelve broad sectors as
follows:
1. Business;
2. Communication;
3. Construction and Engineering;
4. Distribution;
5. Education;
6. Environment;
7. Financial;
8. Health;
9. Tourism and Travel;
10. Recreation, Cultural, and Sporting;
11. Transport;
12. “Other”.
Furthermore,
in most cases, the sectoral entries are accompanied by
numerical references to the Central Product
Classification system of the United Nations which gives a
detailed explanation of the services activities covered
by each listed sector or subsector, and on which the
secretariat list is based. Where this was not possible,
listings are to provide a sufficiently detailed
definition to avoid any ambiguity as to the scope of the
commitment.
Market
access column: When a Member undertakes a commitment
in a sector or subsector it must indicate for each mode
of supply what limitations, if any, it maintains on
market access. Article XVI:2 of the GATS lists six
categories of restriction which may not be adopted or
maintained unless they are specified in the schedule. All
limitations in schedules therefore fall into one of these
categories. They comprise four types of quantitative
restriction plus limitations on types of legal entity and
on foreign equity participation.
National
treatment column: The national treatment obligation
under Article XVII of the GATS is to accord to the
services and service suppliers of any other Member
treatment no less favourable than is accorded to domestic
services and service suppliers. A Member wishing to
maintain any limitations on national treatment —
that is any measures which result in less-favourable
treatment of foreign services or service suppliers —
must indicate these limitations in the third column of
its schedule
Additional
commitments column: Entries in this column are not
obligatory but a Member may decide in a given sector to
make additional commitments relating to measures other
than those subject to scheduling under Articles XVI
and XVII, for example qualifications, standards and
licensing matters. This column is to be used to indicate
positive undertakings, not the listing of additional
limitations or restrictions.
How
commitments are recorded in schedules
In
essence, the entries which constitute a legally binding
commitment in a Member's schedule indicate the presence
or absence of limitations on market access and national
treatment in relation to each of the four modes of supply
for a listed sector, sub-sector or activity. In the
following cases the entries use uniform terminology:
Where
there are no limitations on market access or
national treatment in a given sector and mode of
supply, the entry reads NONE. However, it should
be noted that when the term NONE is used in the
second or sector-specific part of the schedule it
means that there no limitations specific to
this sector: it must be borne in mind that,
as noted above, there may be relevant horizontal
limitations in the first part of the schedule.
All
commitments in a schedule are bound unless
otherwise specified. In such a case, where a
Member wishes to remain free in a given sector
and mode of supply to introduce or maintain
measures inconsistent with market access or
national treatment, the Member has entered in the
appropriate space the term UNBOUND.
In
some situations a particular mode of supply
— such as the cross-border supply of
bridge-building services — may not be
technically possible or feasible. In such cases
the term UNBOUND* has been used, usually in
conjunction with an explanatory footnote
stating “Unbound due to lack of
technical feasibility”.
In
many cases it will be seen that there are textual
descriptions of bound commitments which indicate
limitations on market access or national treatment. Such
entries, which vary in length considerably, do not use
uniform terminology but are based on one of two common
approaches:
The
entry describes in the appropriate space the
nature of the limitation, indicating the
elements which make it inconsistent with Articles
XVI and XVII of the GATS.
In
some cases, Members have chosen to indicate a
limited commitment by describing what they
are offering rather than the limitations they are
maintaining. Such an approach is often used
to indicate the market access opportunities for
the entry of certain categories of foreign
natural persons who supply services.
B. Lists
of Article II (MFN) exemptions Back
to top
Most-favoured-nation
treatment is a general obligation that applies to all
measures affecting trade in services. However, it has
been agreed that particular measures inconsistent with
the MFN obligation can be maintained — in principle
for not more than ten years and subject to review after
not more than five years. Such measures must have been
specified in a list of MFN Exemptions submitted by the
end of the Uruguay Round of Multilateral Trade
Negotiations or by the conclusion of extended
negotiations on certain sectors for which the delayed
submission of related exceptions was espressly
authorized. Subsequently, requests for exemptions from
Article II (MFN) can only be granted under the waiver
procedures of the Marrakesh Agreement.
In
contrast to the complex nature of schedules of
commitments, these lists are largely self-explanatory and
are structured in a straightforward manner. In order to
ensure a complete and precise listing of a country's MFN
exemptions, each country is required to provide five
types of information for each exemption:
(i)
Description of the sector or sectors in which
the exemption applies;
(ii)
Description of the measure, indicating why it is
inconsistent with Article II;
(iii)
The country or countries to which the measure
applies;
(iv)
The intended duration of the exemption;
(v)
The conditions creating the need for the exemption.
It
is a basic principle of the Agreement that specific
commitments are applied on an MFN basis. Where
commitments are entered, therefore, the effect of an MFN
exemption can only be to permit more favourable treatment
to be given to the country to which the exemption applies
than is given to all other Members. Where there are no
commitments, however, an MFN exemption may also permit
less favourable treatment to be given. It is not
necessary to list measures providing for preferential
liberalization of trade in services among Members of
economic integration agreements, such as Free Trade
Areas; such preferential treatment is permitted under
Article V of the GATS and must meet the criteria laid
down in that Article.
|
