Information AboutGats |
| CATEGORIES ABOUT GENERAL AGREEMENT ON TRADE IN SERVICES | |
| treaties | |
| world trade organization | |
| international trade | |
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All members of the WTO are signatories to the GATS. The basic WTO principle of Most Favoured Nation (MFN) applies to GATS as well. HISTORICAL BACKGROUND Before the WTO's Uruguay Round negotiations began in 1986, services were not included in international trade agreements. Most services have traditionally been classed as domestic activities difficult to trade across borders. Some service categories have been viewed as domains for government ownership and control, given their infrastructural importance and susceptibility to national monopolies. A third important group of sectors, including health, education and water services are considered in many countries as governmental responsibilities to be tightly regulated and not left to the vagaries of markets. Nevertheless, some service sectors—in particular, international finance and maritime transport—have been largely open for centuries, as necessary components of merchandise trade. Other large sectors have undergone fundamental technical and regulatory changes in recent decades, opening them to private commercial participation and reducing barriers to entry. Development of information technologies and the internet have helped introduction of a range of internationally tradeable service products including e-banking, 'telemedicine', distance learning and such blights as international gambling, 'spam' and pornography. Governments are increasingly being influenced to expose former monopoly services to international competition. At the same time, powerful countervailing arguments and civil-society movements have been pressing for fuller accountability and legislative restriction of potentially unethical market and corporate behavioursFor instance, a former 'GATSwatch' network published a critical statement which was supported in 2003 by over 500 organisations in 60 countries. See GATSwatch, 2003 . FOUR MODES OF SUPPLY The GATS agreement covers four modes of supply for the delivery of services in cross-border trade: Countries can, in principle, freely decide where to liberalize on a sector-by-sector basis, including which specific mode of supply they want to cover for a given sector. However, the target of those driving the negotiations is ''total liberalization''. Member countries' commitments are governed by a "ratchet effect" meaning that commitments are one-way and cannot be wound back once entered into. The ratchet effect was one of the objectionable features of the failed MAI Treaty . SECTORS ADDRESSED Services Sector Classifications addressed in the GATS are defined in the so-called " W/120 list", 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''. CRITICISMS The GATS document has been criticized for allegedly replacing the authority of national Legislature , with the authority of the GATS Disputes Panel. Such allegations argue that GATS intends to override all "burdensome rules". The WTO and member governments disagree with such allegations. GATS hearings are closed and held in secret. While national governments have an option to exclude any specific service from liberalisation under the GATS, they are also under international pressure to refrain from so excluding any service "provided on a commercial basis". However, important public utilities including water and electricity supply 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 E.g., 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 . The most notorious privatisation of a public utility occurred in January 2000 when the government of . REFERENCES FURTHER READING
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