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161 Tradable Services Covered Under The General Agreement On Trade In Services (Gats)

The provision of many services often requires the simultaneous physical presence of the producer and the consumer. There are therefore many cases where, in order to be commercially reasonable, trade obligations must extend to cross-border consumer movements, the establishment of a commercial presence in a market or the temporary free movement of the service provider. The GATT considers these rules on investment in the services sector to be distorting factors that influence free trade. Therefore, these distortions must be eliminated or minimized. The GATS agreement applies to all services (there are 161 services negotiable under the GATS) – financial services (bank insurance, etc.), education, telecommunications, shipping, etc. The interests of developing countries have inspired both the overall structure of the agreement and certain articles. In particular, the objective of facilitating the increasing participation of developing countries in trade in services has been enshrined in the preamble to the agreement and is based on the provisions of Article IV. In particular, this article obliges Members to negotiate specific commitments to strengthen the national service capacity of developing countries; Improving developing countries` access to distribution channels and information networks; and liberalizing market access in the areas of interest to these countries. While the concept of progressive liberalisation is one of the fundamental principles of the GATS, Article XIX provides that liberalisation takes place in accordance with national political objectives and the level of development of members, both in the various sectors and in the various sectors. Developing countries will thus have flexibility to open fewer sectors, liberalize fewer types of transactions and gradually expand market access depending on their development situation. Other provisions ensure that developing countries have greater flexibility in implementing the policy of economic integration, maintaining constraints on the reasons for the balance of payments and determining access and use of their telecommunications networks and services.

In addition, developing countries are entitled to technical assistance from the WTO secretariat. The existence of specific commitments entails other obligations relating, among other things, to the notification of new measures having a significant impact on trade and the prevention of restrictions on international payments and transfers. The creation of the GATS was one of the key principles of the Uruguay Round, the results of which came into force in January 1995. The GATS was essentially inspired by the same objectives as its merchandise trade counterpart, the General Agreement on Tariffs and Trade (GATT): the creation of a credible and reliable system of international trade rules; Ensure fair and equitable treatment of all participants (principle of non-discrimination); boosting economic activity through guaranteed political ties; Promoting trade and development through gradual liberalization. MFN Treatment: Article II of the GATS authorizes members to treat the service providers of all other members without delay and unconditionally, “a treatment that is no less favourable than that given to comparable service providers in another country.” In principle, this is a prohibition of preferential regimes between groups of members in certain sectors or reciprocity rules that limit access to the dense to trading partners who give similar treatment. While services currently account for more than two-thirds of world output and employment, they account for no more than 25% of total trade, as measured by the balance of payments. But this apparently modest proportion should not be underestimated. Indeed, the balance of payments statistics do not cover one of the types of services defined in the GATS, i.e. the supply by commercial presence in another country (mode 3).