The General Agreement on Trade in Services (GATS)

The General Agreement on Trade in Services (GATS) is a treaty of the World Trade Organisation (WTO) that entered into force in 1995.

The objectives are

• to create a reliable and predictable system of international rules for trade in services
• to facilitate the progressive liberalisation of services markets

All members of the WTO are parties to the GATS.

The fundamental principles of the GATS apply, in principle, to all service sectors.

There are two exceptions

• services supplied in the exercise of governmental authority on a con-commercial basis, such as social security schemes, public health, education
• services related to air transport

The GATS also applies to all services procured by all levels of government (central, regional, local, etc.).

Governments remain free to decide which services sectors they actually liberalise.

Core principles

Most-favoured-nation treatment (MFN) ensures that each signatory country treats services and service suppliers of any member country indiscriminately, no less favourably than those of any another country, under the conditions and limits mentioned in the Schedule of Specific Commitments.

except under certain conditions, two countries cannot make preferential arrangements that are discriminatory to others

The National treatment principle states that each member country treats services of another member country no less favourably than its own national products, under the conditions and limits mentioned in the Schedules of Specific Commitments.

countries cannot operate discriminatory measures benefiting domestic services or service suppliers

Other commitments

• governments have to publish all relevant laws and regulations in a transparent and easily accessible way
• rules must be administered in a reasonable, objective and impartial manner
• member countries must ensure that monopolies and exclusive service suppliers do not abuse their position
• member countries will consult on ways to eliminate business practices that may restrain competition
• countries might join agreements on the recognition of professional qualifications
• international transfers and payments for current transactions relating to services commitments cannot be restricted, except in cases of balance-of-payments difficulties and under certain circumstances

Classification of services sectors

The GATS covers all services with few exceptions. The list of services sectors and sub-sectors covered are found in the Services sectoral classification list.