GATS

As a result of the Uruguay Round negotiations, world trade in services is covered for the first time ever by a global trade agreement. This General Agreement on Trade in Services brings trade and services into a multilateral framework of rules and disciplines broadly compared to that provided for trade in goods by the GATT. The GATS is an annex to the World Trade Organisation (>WTO), a global intergovernmental treaty that entered into effect on 01 January 1995, and for which the WTO constitutes a single international framework with a common dispute-settlement system.

The main body of the general framework includes general obligations, which apply directly and involuntary to all members and service sectors, such as the so-called Most-Favourite Nation (MFN) treatment and transparency.

Unlike the general obligations, specific commitments, applying only to specific sectors, are laid down in individual country schedules whose scope may vary broadly among members. Specific commitments relate to “Market Access” and “National Treatment”. The granting of “Market Access” may be made subject to various types of limitation. For example, limitations may be imposed on the number of services suppliers, service operations in the sector, the legal form of the service supplier or the participation of foreign capital.

The Uruguay Round also established a WTO dispute settlement system which arises if a Member considers that another Member has not conformed to its obligations under the WTO and GATS, whether on substantive or procedural matters. The fundamental objective of this mechanism is to obtain a mutually satisfactory solution to a dispute through consultations between the interested Members.

The existing Agreement on Government Procurement extends coverage to services (including construction services), procurement at the sub-central level (for example, states, provinces, departments and prefectures), and procurement by public utilities. The new agreement took effect on 1 January 1996. It also reinforces rules guaranteeing fair and non-discriminatory conditions of international competition. The agreement applies to contracts worth more than specified threshold values. For construction contracts, in general the threshold value is SDR 5,000,000.

The interest of European service suppliers are represented by the European Commission which set up the European Services Forum (>ESF) whith the task to identify market access barriers.

GATS DG Trade WTO