Seminar 3, 22 October 2021
General Agreement on Trade in Services (GATS)
The General Agreement on Trade in Services (GATS) emerged from the Uruguay Round negotiations as one of the three pillars of the WTO. GATS material on the WTO website is available at: http://www.wto.org/english/tratop_e/serv_e/serv_e.htm. This seminar explores: (1) the nature and scope of the GATS; and (2) the relationship between the GATS and other WTO Agreements – (GATT & TRIPS).
GATS Objectives
The GATS was inspired by essentially the same objectives as its counterpart in
merchandise trade, the General Agreement on Tariffs and Trade (GATT):
creating a credible and reliable system of international trade rules;
ensuring fair and equitable treatment of all participants (principle of non-
discrimination);
stimulating economic activity through guaranteed policy bindings; and
promoting trade and development through progressive liberalization.
When assessed in value-added terms, services account for about 50 per cent of world
trade.
All WTO members are at the same time members of the GATS and, to varying degrees,
have assumed commitments in individual service sectors.
Recommended Reading
General Agreement on Trade in Services,
http://www.wto.org/english/docs_e/legal_e/26-gats.pdf
The General Agreement on Trade in Services: An Introduction (29 March 2006),
http://www.wto.org/english/tratop_e/serv_e/gsintr_e.doc
WTO, GATS Training Module, https://www.wto.org/english/tratop_e/serv_e/cbt_course_e/course_index_e.htm
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Matusushita, M., et. al., The World Trade Organisation (Oxford University Press, 3rd edn, 2015) chapter 16, https://ebookcentral.proquest.com/lib/brunelu/detail.action?docID=4310768
Further Reading
Lester, S., Mercurio, B., and Davies A., World Trade Law: Text, Materials and Commentary (Hart Publishing, 3rd edn, 2018) chapter 14.
Chantal Blouin, Nick Drager, and Richard Smith (eds.), International Trade in Health Services and the GATS: Current Issues and Debates (World Bank, 2006).
Jackson, J.H., The World Trading System: Law and Policy of International Economic Relations (MIT Press, 2nd edn., 1997) pp. 305-310.
WTO Appellate Body Reports:
United States – Measures Affecting the Cross-border Supply of Gambling and Betting
Service, WT/DS285/AB/R (7 April 2005), http://www.sice.oas.org/dispute/wto/ds285/ds285a1e.asp or http://www.worldtradelaw.net/search/searchreports.htm
European Communities – Regime for the Importation, Sale and Distribution of Bananas,
WT/DS27/AB/R (9 September 1997),
https://www.wto.org/english/tratop_e/dispu_e/27abr.pdf
WTO, A Handbook on the GATS Agreement (Cambridge University Press, 2005), https://www.wto.org/english/res_e/publications_e/handbook_gats_e.htm
Mattoo, A., and Wunsch-Vincent, S., ‘Pre-Empting Protectionism in Services: The GATS and Outsourcing’ (2004) 7(4) Journal of International Economic Law 765-800.
Seminar Questions (write down your notes to the following questions and be prepared to discuss your answers at the seminar)
1. (a) What is meant by ‘trade in services’ under the GATS?
Peter Van den Bossche, Essentials of WTO Law, 2nd edn, (CUP 2021) chapters 4 and 6 (concerning trade in services only).
Peter Van den Bossche and Werner Zdouc, The Law and Policy of the World Trade Organization: Text, Cases, and Materials (CUP, 4th edn, 2017; or 5th edn, 2021)
chapters 4, 5,7, 8, 9 and 10 (concerning GATS only).
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(b) How can services be traded? The GATS distinguishes between four modes of trade in services: (i) cross-border trade (ii) consumption abroad (ii) commercial presence (iv) presence of natural persons. Discuss each of these modes.
2. Under the GATS, Article 1(3)(b) and (c), the GATS does not extend to services provided ‘in exercise of governmental authority’. Examine the scope and implications of this exemption. Based on this provision, are taxpayer-supported, government-run schools ‘supplied in the exercise of governmental authority’?
3. Are there any barriers to trade in services? See Article XVI:2 (a) to (f) of the GATS.
4. Discuss the meaning and purpose of the following rules on non-discrimination obligations concerning trade in services:
(a) Most-Favoured-Nation (or MFN) treatment (see GATS, Art. II:1).
(b) National treatment (see GATS, Art. XVII).
5. Examine the effects of COVID-19 on trade in travel and tourism services.
See WTO, International Trade in Travel and Tourism Services: Economic Impact and Policy Responses During The COVID-19 Crisis (30 September 2020), https://www.wto.org/english/res_e/reser_e/ersd202011_e.pdf
Post-seminar activity
Read the following Report of the WTO Appellate Body, Canada – Certain Measures Affecting the Automotive Industry (Canada – Autos) (2000) ,
Full report: https://www.wto.org/english/tratop_e/dispu_e/2823d.pdf Summary:
https://www.wto.org/english/tratop_e/dispu_e/cases_e/1pagesum_e/ds142sum_e.pdf
Prepare a case note (no longer than 600 words) setting out the following:
(i) Summary of facts
(ii) Dispute between parties (measure or product at issue)
(iii) Summary of legal arguments
(iv) Panel/Appellate Body findings
(v) Your comments – Did the Appellate Body correctly interpret and apply the law
on the facts?
