|
Contents
> Director-General’s letter to journalists
> The Doha Development Agenda
> Agriculture
> Cotton
> Services
> Market access, non-agricultural products
> Intellectual property (TRIPS)
> Trade facilitation
> Rules: ad, scm including fisheries subsidies
> Rules: regional agreements
> Dispute settlement
> Trade and environment
> Small economies
> Trade, debt and finance
> Trade and technology transfer
> Technical cooperation
> Least-developed countries
> Special and differential treatment
> Implementation issues
> Electronic commerce
> Members and accessions
> Members
> Bananas
> Statistics, Textiles and Clothing
> Statistics, Facts and Figures
> Jargon buster, Country groupings
> Jargon buster, An informal guide to ‘WTOspeak’
|
GATS:
The Agreement back to top
The General Agreement on Trade in Services
(GATS) is the first and only set of multilateral rules governing
international trade in services. The agreement covers all internationally-traded
services – for example: banking, telecommunications, tourism, and
professional services such as accountancy, architectural, legal
services, among others.
Governmental services are explicitly left
out of the
agreement and there is no legal obligation to force a government
to privatize services industries. Nor does the agreement outlaw
government or private monopolies. Governmental services are defined
in the
agreement
as those that are not supplied commercially nor in competition.
Under
the GATS, even if a government decides to open its domestic public
services market to foreign suppliers it still retains the right
to set qualification requirements (e.g. for doctors or lawyers),
to set
standards to ensure consumer health and safety, and to introduce
new regulations to pursue any other policy objective. The key principle
is that the host government must not treat any foreign supplier
more
favourably than other competing foreign suppliers.
The agreement
also defines four ways (“modes”) of delivering or trading a service:
- Mode
1 is where services are supplied from one country to another
(e.g. international telephone calls), officially known as “cross-border
supply”;
- Mode 2 is where consumers or firms
make use of a service in another country (e.g. tourism) officially
known
as “consumption
abroad”;
- Mode 3 is where a foreign company
sets up subsidiaries or branches to provide services in another
country
(e.g. foreign
banks setting up operations in a country) officially known as “commercial
presence”; and
- Mode 4 is where individuals travel
from their own country to supply services in another country
(e.g. fashion
models, architects or consultants) officially known as “movement of natural
persons ”.
Negotiations back to top
Negotiations to liberalize international
trade in services are being conducted along two concurrent tracks:
- bilateral
bargaining (known as “request-offer”) between governments
to improve market access opportunities (known as “specific commitments”)
in each other’s market, the results of which will be applied
to all trading partners; and
- multilateral negotiations among all
governments to establish any necessary rules and disciplines
which will apply
to the whole WTO membership, with certain special provisions
for
developing and least-developed countries.
Market access negotiations back to top
The “request-offer” negotiating
method:
Negotiations
to improve market access in services are conducted through a request-offer
procedure. Governments send requests to each other
indicating what market access opportunities they are seeking
for their national services suppliers; the governments in receipt
of
such requests reply by submitting their initial offers specifying
how and to what extent they are willing to consider opening their
domestic markets in response to these requests. This sets in
motion a series of bilateral bargaining sessions. Regardless of
which country
submits a request, the final offer from the responding country
applies to all trading partners. The negotiations are considered
successfully
concluded only when all the governments assess that the latest
offers represent a commercially meaningful package of opportunities
for
their national services suppliers. These final offers then become
legally-binding commitments specifying the conditions under which
market access is granted.
The commitments appear in “schedules” that
list the sectors being opened, specifying the extent of market
access being given in those sectors (e.g.
whether there
are any restrictions on foreign ownership), and any limitations on national
treatment (e.g. whether some privileges given to local companies will not
be given to foreign
companies). So, for example, if a government commits itself to allow foreign
banks to operate in its domestic market, that is a market-access commitment.
And if the government limits the number of licenses it will issue, then that
is a market-access limitation. If it also says that foreign banks are subject
to higher minimum capital requirements than domestic banks, that is a national-treatment
limitation.
Brief summary of market access talks:
So far,
93 governments have submitted initial offers, of which 53 have revised
or improved their offers as a result of bilateral negotiations. However,
delegations widely acknowledge that the overall quality of initial and
revised offers remains unsatisfactory; few, if any, new commercial opportunities
will result from current offers. A number of delegations recognize that
the request-offer method on its own is not producing the desired result.
Many delegations maintain that negotiators should explore all negotiating
methods available within the parameters of the negotiating mandate of
the GATS – i.e. bilateral, plurilateral and multilateral approaches.
The role of possible indicators to measure and promote progress has been
raised by some delegations, while others have expressed concern that
these would undermine the negotiating flexibility granted by the GATS.
Negotiators continue to discuss possible negotiating methods complementary
to the request-offer method, and possible means of intensifying the request-offer
process.
Each government’s offer covers several services
sectors and specifies how the service will be delivered under the various
modes.
So, for example,
in the financial
services sector, one country has offered to eliminate a 51% foreign equity limitation
for asset management companies which want to establish a “commercial presence” by
setting up subsidiaries or branches (i.e. under Mode 3). Also under this mode
of commercial presence, a country has offered to increase the number of licenses
for foreign banks from 12 to 20. Another offer proposes to allow locally established
insurance companies to reinsure themselves abroad without having to establish
a company there so as to provide a cross-border service under Mode 1. Yet another
country has offered to allow its citizens to purchase financial advisory services
abroad – this is defined as “consumption abroad” under Mode 2. Under Mode 4,
where individuals travel from their own country to supply services in another
country, there is an offer to allow foreign financial institutions the transfer
of CEOs and other staff.
Below are brief extracts from an assessment made
by the chairman of the services negotiations, including his summary of
some of the
views of the negotiators.
- Legal services 17 offers propose improvements
in the legal services sector. Delegations have indicated their expectation
that the following barriers would be addressed in the negotiations:
citizenship requirements, partnership/association restrictions, and
restrictions
on employment of locally-qualified lawyers. Some delegations have
observed that the offers on legal services were limited in scope and
did not lead
to effective market access.
- Other professional services Other than
legal services, 15 offers have been made in accounting, auditing
and bookkeeping services, 14 in architectural services, and 16 in engineering
services.
- Computer and related services 32 offers
have been made in these services. They are one of the priority areas
emphasized
by delegations
that aim to improve commitments on cross-border supply, given the
sector’s
importance as a cross-border export and as a facilitator of access.
- Postal
and courier services 14 offers have been made. A number of delegations
characterized postal and courier services as a top priority. Some
expressed interest in commitments on all postal or courier service
no longer subject
to monopoly, others put particular emphasis on courier or express
delivery service.
- Telecommunications services 34 offers have been
made in this sector, in which virtually all developed-country delegations
as well
as a number of developing-country delegations have expectations for
progress.
- Financial
services 32 offers have been made with respect to insurance and insurance-related
services and 30 offers have been made with respect to banking and
other financial services. A number of delegations expressed disappointment
since many offers did not capture existing levels of liberalization.
- Maritime
transport services 24 offers have been made in maritime transport
services. A group of delegations expressed dissatisfaction at the limited
number
of quality offers.
- Other transport services 14 offers have been
made in the three air transport subsectors that fall under the GATS,
13 in
road transport services, and 9 in rail transport services.
Rules negotiations back to top
Article 6 of the GATS mandates negotiations to
develop any necessary disciplines on domestic regulation. The following
types of domestic regulations
are mentioned: transparency provisions; licensing requirements and procedures;
qualification requirements and procedures; and technical standards. It
is commonly understood among delegations that the outcome of the negotiations
will not affect the right to regulate but ensure that regulations are
not unnecessarily trade-restrictive.
GATS does not require any service
to be deregulated. Commitments to liberalize do not affect governments’ right
to set levels of quality, safety or price, or to introduce new regulations
to pursue any other policy objective. Governments retain the right to
set qualification requirements (e.g. for doctors or lawyers), and to
set standards to ensure consumer health and safety. The GATS says that
governments should regulate services reasonably, objectively, impartially,
and in a transparent manner.
Several delegations emphasized that disciplines
in domestic regulation should facilitate mode 4 commitments, ensuring
that technical standards and licensing procedures were not unnecessarily
burdensome, and establishing effective mechanisms to recognize foreign
qualifications.
On emergency safeguard measures, subsidies and
government procurement, no tangible progress has been achieved to date.
Several
delegations continue to stress the importance of an emergency safeguard
mechanism, while others maintain their longstanding concerns revolving
around, inter alia, such a mechanism. |
Other
material:
> Services
> Services negotiations
> Doha declaration
> Doha declaration
explained
|
