When it comes to global trade, services have just as much a role to play as goods. To ensure fair and open trade in services, the World Trade Organization (WTO) created the General Agreement on Trade in Services (GATS).
The GATS is a multilateral agreement that establishes a framework for trade in services among WTO member countries. It entered into force in 1995 and currently has 164 members. It covers a wide range of services, including financial, communications, healthcare, tourism, and education services, among others.
One of the primary objectives of the GATS is to promote the liberalization of trade in services. This means reducing barriers to entry, such as restrictions on foreign investment, discriminatory regulations, and discriminatory treatment of foreign service providers. By doing so, the GATS aims to promote competition and increase efficiency in the provision of services.
The GATS also aims to protect the interests of service providers and consumers. It does so by ensuring that WTO member countries apply non-discriminatory treatment to foreign service providers. This means that foreign service providers must be treated equally to domestic providers when it comes to market access and national treatment.
To ensure that the GATS is effectively implemented, the agreement includes a number of mechanisms. This includes a “request-offer” system, which allows WTO member countries to negotiate and make commitments on liberalization of trade in services. The GATS also establishes a dispute settlement system, which allows WTO member countries to seek resolution of disputes related to the agreement.
While the GATS has been in force for over two decades, there are ongoing debates about its effectiveness. Some critics argue that the GATS has not gone far enough in promoting liberalization of trade in services, particularly in areas such as healthcare and education. Others argue that the agreement has led to negative consequences, such as the loss of domestic jobs and the erosion of regulatory protections for consumers.
Regardless of these debates, the GATS remains an important framework for trade in services among WTO member countries. As the global economy continues to evolve, the GATS may need to be updated and reformed to ensure that it remains relevant and effective in promoting fair and open trade in services.