13. What is the GATS?
Answer:The GATS was adopted by the Uruguay Round and covers all internationally traded services. It is also the first multilateral agreement to provide legally enforceable rights to trade in all services including cultural ones. The agreement defines four ways of providing an international service: Services supplied from one country to another (e.g. banking or architectural services provided through telecommunications or regular mail), known as "cross-border supply". Consumers or firms using a service in another country (e.g. tourism or aircraft or ship maintenance work), known as "consumption abroad".A foreign company setting up subsidiaries or branches to provide services in another country (e.g. Insurance companies or hotel chains) officially known as "commercial presence".Individuals travelling from their own country to supply services in another (e.g. auditors, physicians, teachers, etc.), known as "presence of natural persons". Both national treatment and MFN principles apply to trade of all services except those provided in the exercise of governmental authority. Governments can choose the services in which they make market access and national treatment commitments and they can limit the degree of market access and national treatment they offer. In short, every country has the right to choose the sectors in which it wishes to make an offer of liberalization, and can also establish a list of specific commitments it wishes to make to provide foreigners access to its’ services market. Furthermore, a country does not have to apply national treatment in sectors where it has made no commitments. Even where commitments have been contracted the GATS does allow some limits on national treatment.On the other hand, the Most Favoured Nation clause and the principle of transparency are general obligations under the GATS, so they will apply even if the country has made no specific commitment to provide foreign companies access to its market. "Members shall accord immediately and unconditionally to services and service suppliers of any other Member treatment no less favourable than that it accords to like services and service suppliers of any other country" (GATS, Article II). However, special temporary exemptions to this MFN obligation have been allowed alongside the commitments, and will normally last no more than 10 years. These temporary withdrawals of MNF commitments are an integral part of the agreement. They benefit, in particular, countries within the same region that have set up special trade zones such as custom unions (members apply a common external tariff and eliminate tariffs between them) or free trade areas (trade within the group is duty free but members set their own tariffs on imports from non-members). However, they have to be sufficiently economically integrated, like the European Union and unlike the Council of Europe.Finally there are special provisions to allow developing countries to progressively adapt and implement the commitments.In English, GATS (General Agreement on Trade in Services); in French, AGCS (Accord Général sur le Commerce des Services).
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