Hong Kong is the most service-oriented economy in the world: the services
sector now accounts for 85% of Hong Kong's gross domestic product, or 93% if construction
and utilities are included. In his third Policy Address last October, the Hong Kong
Special Administrative Region (SAR) Chief Executive C. H. Tung expressed his desire to see
Hong Kong become a world-class, cosmopolitan city comparable to New York and London.
Services liberalisation and globalisation will play a major role in achieving this vision.
Hong Kong thus has a major stake in multilateral trade policy-making in services. The GATS
is too important for Hong Kong to ignore, not least because the GATS is the only
multilateral discipline governing trade in services.
Broadly speaking, the GATS has three components. First, a member can choose to open a sector to foreign suppliers, but she can maintain limitations on the entry of foreign suppliers. The GATS has several built-in mechanisms to ensure progressive liberalization. In this context, progressive liberalization is achieved by gradual withdrawal of the existing limitations. Furthermore, no new limitations can be added once a sector is put under the GATS.
Second, a fundamental principle of the GATS is that a member should treat suppliers from other members the same as its domestic suppliers (national treatment). However, the GATS allows a member to maintain exceptions to national treatment. Like market access restrictions, such exceptions can only be made when a sector is first put under the GATS. Commitments on market access and national treatment are referred as Schedule of Specific Commitments.
Third, another fundamental principle of the GATS is that a member should treat suppliers from all other members equally (MFN, most-favoured-nation, principle). Again, exceptions can only be maintained when a schedule is first put up, but normally not longer than 10 years. These exceptions can be found in MFN Exemption List.
Progressive liberalization can also be achieved via further negotiation. Sectoral negotiations on movement of natural person, maritime transport, telecommunications, financial services have been conducted since the GATS was established in 1994. The results of these negotiations may not be as satisfactory as one wishes, but they did make nontrivial achievement. On the technical side, they make the original GATS, a complex legal document, incomprehensible to ordinary people. The increasing complexity of the GATS motivates us to compile this handbook.
The two objectives of the handbook are:
?to improve business community's understanding of GATS;
?to help Hong Kong service providers in identifying potential business opportunities arising from GATS.