Commentaries

Trade in Services: The most dynamic segment of international trade

“Trade in Services: The most dynamic segment of international trade” written by WTO is published in 2015.

Introduction

General Agreement on Trade in Services

The WTO’s General Agreement on Trade in Services (GATS) entered into force in 1995. It remains the only set of multilateral rules covering international trade in services. The Agreement reflects the gradual transfer of responsibility for many services from government-owned suppliers to the private sector and the increased potential for trade in services brought about by advances in information and communication technology.

The GATS acknowledges that in many instances suppliers and consumers have to be in physical proximity for services to be traded. It identifies four different ways, or “modes”, of supplying services.

Services covered by the GATS are not automatically opened to competition. WTO members guarantee access to their markets only in those sectors and modes of supply specified in their “schedules of commitments”, subject to any “limitations” they wish to maintain. These schedules provide legally binding commitments. The only obligation that applies across all services covered by the GATS is the most-favoured-nation (MFN) principle, meaning suppliers of services from all countries are treated in the same way.

The GATS covers all services, with the exception of “services provided in the exercise of governmental authority” and the bulk of air transport services.

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