Business Guide to the General Agreement on Trade in Services

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Author(s):
ITC
31 Dec 2002
Pages:
279
ISBN:
9789213618509 (PDF)
http://dx.doi.org/10.18356/4b2fcfbe-en

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The General Agreement on Trade in Services (GATS) is an historical agreement covering a wide range of international service transactions. This guide presents the key features of the multilateral system of trade rules covering services. It also identifies the main opportunities and challenges that may be encountered at the practical business level in the implementation of GATS rules and market access commitments.

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  • Foreword

    The General Agreement on Trade in Services (GATS) is an historical agreement covering a wide range of international service transactions. The underlying theme of this Guide is that competitive suppliers of all kinds of services, both from developing and developed economies, can expect to benefit directly from the more open trading regime of GATS which aims to reduce and eventually eliminate regulatory restrictions affecting the international supply of services. Users of services, including service businesses themselves, can also expect to gain from the greater variety of service products and prices offered by more companies around the world. The primary focus of the Guide is to inform the business community of the key features of the multilateral system of trade rules covering services. It seeks to improve understanding by the business community of the rights and benefits GATS confers and the obligations it imposes on them and their governments. It also identifies the main opportunities and challenges that may be encountered at the practical business level in the implementation of GATS rules and market access commitments.

  • Acknowledgements

    This Guide is published jointly by the International Trade Centre UNCTAD/WTO (ITC) and the Commonwealth Secretariat. It was written by Dorothy Riddle, President of Service-Growth Consultants Inc., Vancouver, Canada. Doreen Conrad, Head of the ITC Trade in Services Unit, is responsible for ITC’s trade promotion and development activities on services. The Guide was edited by Leni Sutcliffe. Carmelita Endaya prepared the Guide for printing.

  • Note
  • About the General Agreement on Trade in Services

    Until 1995, no multilateral agree ment ex isted on rules for the trade in serv ices. This was largely due to a lack of knowledge about the services trade itself. Economists generally viewed services as not tradeable or, even worse, as non-productive economic activities and therefore un wor thy of pol icy fo cus. Aca demic stud ies had concentrated on employment pat terns in services or on serv ices as sup ports to manu fac tur ing – ig nor ing the di rect con tri bu tions serv ices in dus tries made to do mes tic pro duc tion and for eign ex change earn ings. Gov ern ment ex port de vel op ment plan ning tended to target goods, and so government agen cies were largely unfamiliar with the activities of their own services ex port ers. As na tional sta tis ti cal agen cies did not col lect detailed trade statistics on services, few ac curate and com pre hen sive data sets ex isted.

  • General and supporting obligations
  • Specific commitments
  • Implications for developing and transition economies

    At the beginning of the Uruguay Round, many assumed that trade in services was a post-industrial issue. As discussions progressed, though, Members began to realize that most economies obtain the largest part of their gross domestic product from services industries. Re-examination of economic development showed that, of the countries commonly looked to as economic leaders, neither the United States nor Japan has ever been primarily a manufacturing economy. Both countries went from basically agricultural economies to mainly services economies at the beginning of this century. Some developing and transition economies continue to believe that protecting the emerging domestic services industries is critical to development. Actual experience has shown that, because services enterprises are both suppliers and users of services, they typically benefit overall from rapid liberalization initiatives and are constrained by any service inefficiencies that result from protection.

  • The ongoing liberalization process

    As agreed in Article XIX, a new round of negotiations on trade in services was launched in January 2000. The purpose of the new round is to achieve ‘progressively higher levels of liberalization .… with a view to promoting the interests of all participants on a mutually advantageous basis and to securing an overall balance of rights and obligations’ (Article XIX). Although the Seattle Ministerial Conference in late November 1999 was not successful in launching a complete new round (including goods), the mandate to negotiate on services was never questioned. It was clear that services trade issues have moved from being the most contentious of the Uruguay Round to being perhaps the least controversial within WTO.

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