General Agreement on Trade in Services

The General Agreement on Trade in Services (GATS) is a treaty of the World Trade Organization (WTO) that entered into force in January 1995 as a result of the Uruguay Round negotiations. The treaty was created to extend the multilateral trading system to service sector, in the same way the General Agreement on Tariffs and Trade (GATT) provides such a system for merchandise trade.

All members of the WTO are parties to the GATS. The basic WTO principle of most favoured nation (MFN) applies to GATS as well. However, upon accession, members may introduce temporary exemptions to this rule.

Historical background

While the overall goal of GATS is to remove barriers to trade, members are free to choose which sectors are to be progressively "liberalised" (i.e. marketised and privatised); which mode of supply would apply to a particular sector; and to what extent that "liberalisation" will occur over a given period of time. Members' commitments are governed by a ratchet effect: commitments are one-way and are not to be wound back once entered into. The reason for the rule is to create a stable trading climate (i.e. a market). However, Article XXI allows members to withdraw commitments, and so far two members have exercised the option (US and EU). In November 2008, Bolivia gave a notification that it will withdraw its health services commitments.

Some activist groups consider that GATS risks undermining the ability and authority of governments to regulate commercial activities within their own boundaries, with the effect of ceding power to business interests ahead of the interests of citizens. In 2003, the GATSwatch network published a critical statement supported by over 500 organisations in 60 countries.[1] At the same time, countries are not under any obligation to enter international agreements such as GATS. For countries that like to attract trade and investment, GATS adds a measure of transparency and legal predictability. Legal obstacles to services trade can have legitimate policy reasons, but they can also be an effective tool for large scale corruption (De Soto, Hernando. The Mystery of Capital: Why Capitalism Triumphs in the West and Fails Everywhere Else.)

Four modes of supply

The GATS agreement covers four modes of supply for the delivery of services in cross-border trade:[2]

Mode Criteria Supplier Presence
Mode 1: Cross-border supply Service delivered within the territory of the Member, from the territory of another Member Service supplier not present within the territory of the member
Mode 2: Consumption abroad Service delivered outside the territory of the Member, in the territory of another Member, to a service consumer of the Member
Mode 3: Commercial presence Service delivered within the territory of the Member, through the commercial presence of the supplier Service supplier present within the territory of the Member
Mode 4: Presence of a natural person Service delivered within the territory of the Member, with supplier present as a natural person

Sectors addressed

Services Sector Classifications addressed in the GATS are defined in the so-called "W/120 list",[3] which provides a list of all sectors which can be negotiated under the GATS. The title refers to the name of the official WTO document, MTN.GNS/W/120.

The sectors covered by the GATS are twelve service sectors (Business; Communication; Construction and Engineering; Distribution; Education; Environment; Financial; Health; Tourism and Travel; Recreation, Cultural, and Sporting; Transport; "Other")[4] which, in turn, are divided into sub-sectors.

Criticisms

The GATS agreement has been criticized for tending to substitute the authority of national legislation and judiciary with that of a GATS Disputes Panel conducting closed hearings. WTO member-government spokespersons are obliged to dismiss such criticism because of prior commitment to perceived benefits of prevailing commercial principles of competition and 'liberalisation'.

While national governments have the option to exclude any specific service from liberalisation under GATS, they are also under pressure from international business interests to refrain from excluding any service "provided on a commercial basis". Important public utilities such as water and electricity most commonly involve purchase by consumers and are thus demonstrably "provided on a commercial basis". The same may be said of many health and education services which are sought to be 'exported' by some countries as profitable industries.[5]

This definition defines virtually any public service as being "provided on a commercial basis" and is already extending into such areas as police, the military, prisons, the justice system, public administration, and government. Over a fairly short time perspective, this could open up for the privatisation or marketisation of large parts, and possibly all, of what today are considered public services currently available for the whole population of a country as a social entitlement, to be restructured, marketised, contracted out to for-profit providers, and eventually fully privatised and available only to those who can pay for them. This process is currently far advanced in most countries, usually (and intentionally) without properly informing or consulting the public as to whether or not this is what they desire.

See also

References

  1. ^ GATSwatch, 2003
  2. ^ From the document MTN.GNS/W/124, available on the World Trade Organization Website, posted courtesy of ISTIA
  3. ^ Takuzinis.lv Archived 12 March 2007 at the Wayback Machine
  4. ^ Petersmann; van Loon; Patel (1 December 2017). Collected Courses of the Xiamen Academy of International Law, Volume 11 (2017): Xiamen Academy of International Law Summer Courses, July 27–31, 2015. BRILL. p. 16. ISBN 978-90-04-35530-9.
  5. ^ For example, in 2003 the Confederation of University Faculty Associations of British Columbia urged the government of Canada to specify exclusion of post-secondary education, saying in a submission “If GATS were applied to the Canadian education sector, the effects would be profound. Education would no longer be considered a public service; instead it would be categorized as merely another commercial enterprise.” Source: Background Paper on GATS and Post-secondary Education Archived 28 September 2007 at the Wayback Machine

Further reading

European Union and its Member States — Certain Measures Relating to the Energy Sector

European Union and its Member States — Certain Measures Relating to the Energy Sector, DS476, is the formal name of a case brought by the Russian Federation against the European Union and its member states in the World Trade Organization's Dispute Settlement Body.The case was formally initiated with the filing of a complaint by Russia (in WTO terms, a "request for consultations") on April 30, 2014. The dispute concerns the EU's Third Energy Package, which consists of various two EU directives and EU regulations.Russia claims that the measures within the package violate Articles II, VI, XVI and XVII of the General Agreement on Trade in Services (GATS); Articles I, III, X and XI of the 1994 General Agreement on Tariffs and Trade (GATT); Article 3 of the Agreement on Subsidies and Countervailing Measures (SCM); and Article 2 of the Agreement on Trade Related Investment Measures (TRIM).

Fadi Makki

Fadi Makki (Arabic: فادي مكّي‎) is member of the Council for Behavioral Sciences at the World Economic Forum, and pioneer in the application of behavioural economics to public policy in the Middle East, where he led a large number of RCTs in policy areas such as healthy life style, compliance and rule of law, sustainability, education and workers’ welfare.

He founded the first nudge unit in the Middle East, Qatar’s Behavioural Insights Unit (QBIU), within the Supreme Committee for Delivery & Legacy, and is founder of Nudge Lebanon and the Consumer-Citizen Lab. He is Senior Fellow at Georgetown Qatar and Senior Public Policy Fellow at the American University of Beirut’s Issam Fares Institute of Public Policy. He is also adjunct professor at Hamad Bin Khalifa University and visiting lecturer at AUB where he teaches Behavioural Economics and Policy.

He was advisor to the Prime Minister of Lebanon on economy and trade as well as Director General of the Lebanese Ministry of Economy and Trade from 2002 to the end of 2005. He also worked for Booz & Company, Cisco, as well as the Qatar National Food Security Program. He was the Advisor to the Qatari Ministry of Finance, Economy and Commerce where he advised Qatar on trade policy and the World Trade Organization (WTO), and was part of the committee that organized the 4th WTO ministerial conference which led to the launch of the Doha round in November 2001. He was visiting lecturer and fellow at Cambridge University and the Graduate Institute in Geneva.

His academic background spans International trade and development, international law, public and business administration, behavioural economics and public policy, with a PhD in International Trade from Cambridge University in the United Kingdom, masters from the London School of Economics and Hull University, BAs from the American University of Beirut and the Lebanese University Law School.Fadi studied at the Faculty of Law at the University of Cambridge. His PhD dissertation, which was approved in 1997, is titled 'Financial services in the World Trade Organisation (WTO) and the General Agreement on Trade in Services (GATS): development towards the rule of law.'

Foreign affiliate trade statistics

Foreign affiliate trade statistics (FATS), also known as transnational corporation (TNC) data details the economic operations of foreign direct investment-based enterprises.

Collection of such information, and aggregation at the national level, can provide economists and policymakers with insight as to the relationship that transnational corporations, being FDI-related enterprises, have on economies.

FATS indicators - including:

employment information,

expenditures,

exports and imports (specific to FDI-owned firms)

inter- and intra-firm trade,

profits,

sales,

value-added (product).Inward FATS - Data which represent the operations of foreign-owned (in the FDI sense, i.e. at a minimum of 10% of book value) firms in the local economy, or country.

Outward FATS - Data which represent the operations firms abroad, which are owned by a firm in our home-country ("owned" in the FDI sense, i.e. at a minimum of 10% of book value).

FATS are an economic indicator which has a direct linkage to WTO-GATS Mode 3 Legal Commitments; GATS Mode 3 is one of the Four Modes of Supply enshrined as the framework of the General Agreement on Trade in Services GATS of the World Trade Organization WTO.

FATS describe economic activities which take place as a result of WTO-GATS Mode 3 enterprise trade, or trade which takes place under Commercial Presence circumstances.

The standard for definition for Commercial Presence in the WTO-GATS differs from the generally accepted definition of FDI, which under IMF Balance of Payments Volume 5 standards is 10%; WTO-GATS Commercial Presence defines ownership level benchmarks at 10% of enterprise book value.

Gats

Gats may refer to:

Gats (surname)

Els Quatre Gats ("The Four Cats"), a cafe in Barcelona, Spain which opened on 12 June 1897

Ruslan Gats (born 1987), a Russian professional football player

Saint-Cyr-des-Gâts, a village and commune of the Vendée département in France

"Gats", a song by Susumu Hirasawa from Sword-Wind Chronicle BERSERK Original SoundtrackGATS may refer to :

General Agreement on Trade in Services, a treaty of the World Trade Organization

Tessalit Airport (ICAO identifier: GATS) in Tessalit, Mali

Goods and services

Goods are items that are tangible, such as pens, salt, apples, and hats. Services are activities provided by other people, who include doctors, lawn care workers, dentists, barbers, waiters, or online servers. Taken together, it is the production, distribution, and consumption of goods and services which underpins all economic activity and trade. According to economic theory, consumption of goods and services is assumed to provide utility (satisfaction) to the consumer or end-user, although businesses also consume goods and services in the course of producing other goods and services.

International Transport Workers' Federation

The International Transport Workers' Federation (ITF) is a democratic global union federation of transport workers' trade unions, founded in 1896. In 2017 the ITF had 677 member organizations in 149 countries, representing a combined membership of 19.7 million transport workers in all industrial transport sectors: civil aviation, dockers, inland navigation, seafarers, road transport, railways, fisheries, urban transport and tourism. The ITF represents the interests of transport workers' unions in bodies that take decisions affecting jobs, employment conditions or safety in the transport industry.

The ITF works to improve the lives of transport workers globally, encouraging and organising international solidarity among its network of affiliates.

The ITF is allied with the International Trade Union Confederation (ITUC). Any independent trade union with members in the transport industry is eligible for membership of the organization.

The ITF represents the interests of transport workers' unions in bodies such as the International Labour Organization (ILO), the International Maritime Organization (IMO) and the International Civil Aviation Organization (ICAO). The organization also informs and advises unions about developments in the transport industry in other countries or regions of the world, and organise international solidarity actions when member unions in one country are in conflict with employers or government.

The ITF's headquarters is located in London and it has offices in Amman, Brussels, Georgetown (Guyana), Moscow, Nairobi, New Delhi, Ouagadougou, Rio de Janeiro, Sydney and Tokyo.

Jean Lambert

Jean Denise Lambert (born Jean Denise Archer; 1 June 1950 in Orsett, Essex) is an English politician, and Member of the European Parliament for the London Region. A member of the Green Party of England and Wales, she has been an MEP since 1999. One of three Green MEPs from the UK, the others are Keith Taylor and Molly Scott Cato, Lambert is a Vice-President of the Greens/European Free Alliance Group of MEPs.

Market power

In economics and particularly in industrial organization, market power is the ability of a firm to profitably raise the market price of a good or service over marginal cost. In perfectly competitive markets, market participants have no market power. A firm with total market power can raise prices without losing any customers to competitors. Market participants that have market power are therefore sometimes referred to as "price makers" or "price setters", while those without are sometimes called "price takers". Significant market power occurs when prices exceed marginal cost and long run average cost, so the firm makes economic profit.

A firm with market power has the ability to individually affect either the total quantity or the prevailing price in the market. Price makers face a downward-sloping demand curve, such that price increases lead to a lower quantity demanded. The decrease in supply as a result of the exercise of market power creates an economic deadweight loss which is often viewed as socially undesirable. As a result, many countries have anti-trust or other legislation intended to limit the ability of firms to accrue market power. Such legislation often regulates mergers and sometimes introduces a judicial power to compel divestiture.

A firm usually has market power by virtue of controlling a large portion of the market. In extreme cases—monopoly and monopsony—the firm controls the entire market. However, market size alone is not the only indicator of market power. Highly concentrated markets may be contestable if there are no barriers to entry or exit, limiting the incumbent firm's ability to raise its price above competitive levels.

Market power gives firms the ability to engage in unilateral anti-competitive behavior. Some of the behaviours that firms with market power are accused of engaging in include predatory pricing, product tying, and creation of overcapacity or other barriers to entry. Unilateral market power is one of the most common causes of prices being higher than the competitive equilibrium. Market power has been seen to exert more upward pressure on prices than do variations in the quantity of sellers present in the market. This is due to effects relating to Nash equilibria and profitable deviations that can be made by raising prices.If no individual participant in the market has significant market power, then anti-competitive behavior can take place only through collusion, or the exercise of a group of participants' collective market power.

The Lerner index and Herfindahl index may be used to measure market power.

Medical–industrial complex

The medical–industrial complex is the network of corporations which supply health care services and products for a profit. The term is analogous to "military–industrial complex" and builds from the social precedent of discussion on that concept.

The medical–industrial complex is often discussed in the context of conflict of interest in the health care industry.

Moses Tito Kachima

Moses Tito Kachima is a member of the African Union's Economic, Social and Cultural Council, representing Southern Africa.

Multilateral Agreement on Investment

The Multilateral Agreement on Investment (MAI) was a draft agreement negotiated in secret between members of the Organisation for Economic Co-operation and Development (OECD) between 1995 and 1998. It sought to establish a new body of universal investment laws that would grant corporations unconditional rights to engage in financial operations around the world, without any regard to national laws and citizens' rights. The draft gave corporations a right to sue governments if national health, labor or environment legislation threatened their interests. When its draft became public in 1997, it drew widespread criticism from civil society groups and developing countries, particularly over the possibility that the agreement would make it difficult to regulate foreign investors. After an intense global campaign was waged against the MAI by the treaty's critics, the host nation France announced in October 1998 that it would not support the agreement, effectively preventing its adoption due to the OECD's consensus procedures.

National treatment

National treatment is a principle in international law. Utilized in many treaty regimes involving trade and intellectual property, it requires equal treatment of foreigners and locals. Under national treatment, a state that grants particular rights, benefits or privileges to its own citizens must also grant those advantages to the citizens of other states while they are in that country. In the context of international agreements, a state must provide equal treatment to citizens of the other states participating in the agreement. Imported and locally produced goods should be treated equally — at least after the foreign goods have entered the market.While this is generally viewed as a desirable principle, in custom it conversely means that a state can deprive foreigners of anything of which it deprives its own citizens. An opposing principle calls for an international minimum standard of justice (a sort of basic due process) that would provide a base floor for the protection of rights and of access to judicial process. The conflict between national treatment and minimum standards has mainly played out between industrialized and developing nations, in the context of expropriations. Many developing nations, having the power to take control over the property of their own citizens, wished to exercise it over the property of aliens as well.

Though support for national treatment was expressed in several controversial (and legally non-binding) United Nations General Assembly resolutions, the issue of expropriations is almost universally handled through treaties with other states and contracts with private entities, rather than through reliance upon international custom.

National treatment only applies once a product, service or item of intellectual property has entered the market. Therefore, charging customs duty on an import is not a violation of national treatment even if locally produced products are not charged an equivalent tax.

Safeguard

A safeguard, in international law, is a restraint on international trade or economic development to protect communities from development aggression or home industries from foreign competition.

In the World Trade Organization (WTO), a member may take a safeguard action, such as restricting imports of a product temporarily to protect a domestic industry from an increase in imports causing or threatening to cause injury to domestic production.

In the United Nations Framework Convention on Climate Change, safeguards are intended to protect indigenous peoples and other local communities with traditional knowledge of natural resource management within efforts towards reducing emissions from deforestation and forest degradation.The WTO and UNFCCC concepts are related within international law.

Telecommunications in Mauritius

Telecommunications had an early beginning in Mauritius, with the first telephone line installed in 1883, seven years after the invention of the telephone. Over the years, the network and telephony improved. By the late 20th century, the rapid development and convergence of information and telecommunications technologies gave rise to an ICT industry on the island along with many incentives provided by the government. The government thus aims to make the ICT sector the 5th pillar of the Mauritian economy and Mauritius a Cyber Island. Historically, the country is known for tourism, rather than its call centers and business process outsourcing.

Teletraffic engineering

Telecommunications traffic engineering, teletraffic engineering, or traffic engineering is the application of traffic engineering theory to telecommunications. Teletraffic engineers use their knowledge of statistics including queuing theory, the nature of traffic, their practical models, their measurements and simulations to make predictions and to plan telecommunication networks such as a telephone network or the Internet. These tools and knowledge help provide reliable service at lower cost.

The field was created by the work of A. K. Erlang for circuit-switched networks but is applicable to packet-switched networks, as they both exhibit Markovian properties, and can hence be modeled by e.g. a Poisson arrival process.

The crucial observation in traffic engineering is that in large systems the law of large numbers can be used to make the aggregate properties of a system over a long period of time much more predictable than the behaviour of individual parts of the system.

Trade in services

Trade in Services refers to the sale and delivery of an intangible product, called a service, between a producer and consumer. Trade in services that takes place between a producer and consumer that are, in legal terms, based in different countries is called International Trade in Services.

Trade in services statistics

Trade in services statistics are economic statistics which detail international trade in services. They received a great deal of focus at the advent of services negotiations which took place under the Uruguay Round, which became part of the General Agreement on Trade in Services, one of the four principal pillars of the World Trade Organization (WTO) trade treaty, also called the "WTO Agreement".

The General Agreement on Trade in Services (GATS) Four Modes of Supply comprises:

Mode 1 Cross border trade, which is defined as delivery of a service from the territory of one country into the territory of other country;

Mode 2 Consumption abroad - this mode covers supply of a service of one country to the service consumer of any other country;

Mode 3 Commercial presence - which covers services provided by a service supplier of one country in the territory of any other country, i.e., foreign direct investment undertaken by a service provider;

Mode 4 Presence of natural persons - which covers services provided by a service supplier of one country through the presence of natural persons in the territory another economy.Statistics which correspondent to the GATS Four Modes of Supply comprise quantitative data addressing:

Trade in services, which is defined as delivery of a service from the territory of one country into the territory of other country, specific disaggregation as per GATS Four Modes of Supply may not apply, i.e., this depends on decisions taken by each country;

Foreign direct investment (FDI) Cross-border foreign investment as per International Monetary Fund guidelines. Roughly correspondent to Mode 3

Foreign Affiliate Trade Statistics (FATS) Statistics, or corporate data detailing the operations of foreign direct investment-based enterprises, including sales, expenditures, profits, value-added, inter- and intra-firm trade, exports and imports; Roughly correspondent to Mode 3Statistics which detail commercial services trade taking place under the GATS are in a state of development in most countries. Most countries don't have information which details trade as per the GATS Four Modes of Supply, which makes trade negotiations in this realm difficult, especially for developing country WTO members. The United States Bureau of Economic analysis produces rich statistics in this area, but they do not address the GATS Four Modes of Supply directly, rather, they address only cross-border services, generally defined, and statistics related to FDI. FATS, are collected by the United States BEA, and several other OECD countries.

Uruguay Round

The Uruguay Round was the 8th round of multilateral trade negotiations (MTN) conducted within the framework of the General Agreement on Tariffs and Trade (GATT), spanning from 1986 to 1993 and embracing 123 countries as "contracting parties". The Round led to the creation of the World Trade Organization, with GATT remaining as an integral part of the WTO agreements. The broad mandate of the Round had been to extend GATT trade rules to areas previously exempted as too difficult to liberalize (agriculture, textiles) and increasingly important new areas previously not included (trade in services, intellectual property, investment policy trade distortions). The Round came into effect in 1995 with deadlines ending in 2000 (2004 in the case of developing country contracting parties) under the administrative direction of the newly created World Trade Organization (WTO).The Doha Development Round was the next trade round, beginning in 2001 and still unresolved after missing its official deadline of 2005.

World Trade Organization

The World Trade Organization (WTO) is an intergovernmental organization that is concerned with the regulation of international trade between nations. The WTO officially commenced on 1 January 1995 under the Marrakesh Agreement, signed by 124 nations on 15 April 1994, replacing the General Agreement on Tariffs and Trade (GATT), which commenced in 1948. It is the largest international economic organization in the world.The WTO deals with regulation of trade in goods, services and intellectual property between participating countries by providing a framework for negotiating trade agreements and a dispute resolution process aimed at enforcing participants' adherence to WTO agreements, which are signed by representatives of member governments and ratified by their parliaments. The WTO prohibits discrimination between trading partners, but provides exceptions for environmental protection, national security, and other important goals. Trade-related disputes are resolved by independent judges at the WTO through a dispute resolution process.The WTO's current Director-General is Roberto Azevêdo, who leads a staff of over 600 people in Geneva, Switzerland. A trade facilitation agreement, part of the Bali Package of decisions, was agreed by all members on 7 December 2013, the first comprehensive agreement in the organization's history. On 23 January 2017, the amendment to the WTO Trade Related Aspects of Intellectual Property Rights (TRIPS) Agreement marks the first time since the organization opened in 1995 that WTO accords have been amended, and this change should secure for developing countries a legal pathway to access affordable remedies under WTO rules.Studies show that the WTO boosted trade, and that barriers to trade would be higher in the absence of the WTO. The WTO has highly influenced the text of trade agreements, as "nearly all recent [preferential trade agreements (PTAs)] reference the WTO explicitly, often dozens of times across multiple chapters... in many of these same PTAs we find that substantial portions of treaty language—sometime the majority of a chapter—is copied verbatim from a WTO agreement."

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