How to Read GATS?

The GATS is the first multilateral agreement to provide legally enforceable rights to trade in all services.  The market liberalization commitments made by GATS members are with respect to the following four modes of supply:
 

Cross-border supply: foreign suppliers to supply services cross-border into the territory of a GATS member (e.g. telephone call).
 

Consumption aboard: residents of one GATS member to purchase services in the territory of another GATS member (e.g. tourist).
 

Commercial presence: foreign suppliers to establish an operation in the territory of a member (e.g. branch office).
 

Presence of natural persons: entry and temporary stay of residents from one  GATS member in the territory of another GATS member (e.g. fashion model).
 

In nearly all schedules, commitments are split into three sections:

Horizontal (Cross-sectors) Commitments;
Sector-specific Commitments; and
MFN (Most-Favoured-Nation) Exemptions.
 

The following description of each section is adapted from Guide To Reading The GATS Schedules of Specific Commitments and The Lists of Article II (MFN) Exemptions. (http://www.wto.org/wto/new/guide1.htm)
 

. Horizontal Commitments

Horizontal commitments stipulate commitments made by a GATS member that apply to all of the sectors included in the member’s schedules.  These often refer to a particular mode of supply, notably commercial presence and the presence of natural persons.
 

. Sector-specific Commitments

In the second section of the schedule, commitments which apply to a particular sector or sub-sector are listed. The schedule contains a clear definition of the sector, sub-sector or activity that is the subject of the specific commitment

In general the order in which the sectors are listed are as follows:

1. Business Services
2.  Communication Services
3.  Construction and Engineering Services
4.  Distribution Services
5.  Education Services
6.  Environment Services
7.  Financial Services
8.  Health Services
9.  Tourism and Travel Services
10. Recreation, Cultural, and Sporting Services
11. Transport Services
12. Other Services

Furthermore, in most cases, the sectoral entries are accompanied by numerical references to the Central Product Classification system of the United Nations (UNCPC) which gives a detailed explanation of the services activities covered by each listed sector or sub-sector. Where this was not possible, a sufficiently detailed definition is provided to avoid any ambiguity as to the scope of the commitment.

The format used to present the details of commitments has also been standardized wherever possible. What follows is a description of the information which has to be inscribed in the schedules.

a. Market access section

When a member undertakes a commitment in a sector or sub-sector it must indicate for each mode of supply what limitations, if any, it maintains on market access.

b. National treatment section

A member wishing to maintain any limitations on national treatment - that is any measures which result in less favourable treatment of foreign services or service suppliers than their domestic counterparts - must indicate these limitations in this section of its schedule

c. Additional commitments section

Entries in this section are not obligatory but a member may decide to make additional commitments in a given sector relating to measures other than those covered in the market access and national treatment sections, for example qualifications, standards and licensing matters.  Additional commitments often appear in telecommunications and financial services in the form of an attachment.
 

. How Commitments Are Recorded

In essence, the entries which constitute a legally binding commitment in a member's schedule indicate the presence or absence of limitations on market access and national treatment in relation to each of the four modes of supply for a listed sector, sub-sector or activity.

Where there are no limitations on a mode of supply under market access or national treatment in a given sector, the entry reads NONE.  Note that a NONE entry in the specific commitment section of a sector does not necessarily mean there is no limitation on this sector.  The reason is because there may be limitations in the horizontal commitment section ?which applies to all sectors.

If a GATS member wishes to reserve the right in a given sector and mode of supply to introduce or maintain measures under market access or national treatment, the GATS member needs to enter in the appropriate space the term UNBOUND.

In some situations a particular mode of supply - such as the cross-border supply of  bridge-building services - may not be technically possible or feasible. In such cases the term UNBOUND* has been used, usually in conjunction with an explanatory footnote stating “Unbound due to lack of technical feasibility?

In many cases, there are textual descriptions of limitations on market access or national treatment.
 
 

. Lists of MFN Exemptions

A GATS member is allowed to maintain some measures inconsistent with the MFN obligation - in principle for not more than ten years and subject to review after not more than five years. These must be specified in a list of MFN Exemptions.

The lists are largely self-explanatory and are structured in a straightforward manner.  Each member is required to provide five types of information for each exemption:

1. Description of the sector or sectors in which the exemption applies;
2. Description of the measure;
3. The country or countries to which the measure applies;
4. The intended duration of the exemption;
5. The conditions creating the need for the exemption.
 

. Features of the E-handbook

1. The GATS covers the original agreement signed in 1994 and subsequent supplementary agreements signed for the financial services, telecommunications services and movement of natural persons.  All these supplements are merged into the original agreement in our e-handbook to reflect all the current commitments made by member countries and to simplify reading task.

2. Users can easily select multiple countries to view their commitments for a particular sector or sub-sector.

3. The information is presented at different levels of details to tailor for the different needs of users.

4. Definitions of key GATS terminology are provided on-line: simply click the words or phrases.