General Agreement on Trade in Services (GATS) is a multilateral agreement that regulates international trade in services. It is one of the four pillars of the World Trade Organization (WTO), which also includes the General Agreement on Tariffs and Trade (GATT), Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS), and Agreement on Agriculture. GATS aims to promote and liberalize trade in services, which account for a significant portion of the world`s economy. This article will provide an overview of GATS, its key features, and its impact on international trade in services.
GATS was signed in 1994 and entered into force in 1995. It covers a wide range of services, including banking and other financial services, telecommunications, transport, tourism, professional services, and education. The agreement requires signatory countries to provide market access and national treatment to service providers from other member countries. Market access means that foreign service providers must be allowed to enter a market and provide services. National treatment means that foreign service providers must be treated the same as domestic service providers in terms of regulations, taxes, and other requirements.
GATS also provides a framework for negotiating new commitments on market access and national treatment. Member countries can make specific commitments on the sectors and modes of supply they are willing to liberalize. Modes of supply refer to the different ways in which services are provided, such as cross-border supply, consumption abroad, commercial presence, and the movement of natural persons. GATS also contains provisions on regulatory transparency, domestic regulations, and dispute settlement.
GATS has had a significant impact on international trade in services. It has facilitated the growth of cross-border trade in services, particularly in areas such as telecommunications and finance. It has also led to the creation of new markets for services, such as outsourcing and offshoring. However, GATS has been criticized for its potential negative impact on domestic regulations and public services. Critics argue that GATS may require governments to liberalize sectors that they consider strategically important or sensitive. They also raise concerns about the potential for GATS to undermine domestic policies aimed at protecting consumers, promoting public health, and ensuring social welfare.
In conclusion, GATS is an important multilateral agreement that regulates international trade in services. It aims to promote and liberalize the trade in services while providing a framework for negotiations, regulatory transparency, and dispute settlement. GATS has had a significant impact on international trade in services, but it also has potential negative consequences for domestic regulations and public services. It is essential that policymakers and stakeholders carefully consider the potential benefits and risks of GATS when negotiating new commitments or implementing existing ones.