General Agreement on Trade in Services

General Agreement on Trade in Services is a multilateral trade agreement that aims to liberalize trade in services among its signatory countries, including Australia, Canada, China, European Union, India, Japan, South Korea, and the United States. The agreement is administered by the World Trade Organization (WTO) and is considered a key component of the Uruguay Round of trade negotiations. The General Agreement on Tariffs and Trade (GATT) and the General Agreement on Trade in Services are two of the main pillars of the WTO, along with the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS). The agreement has been influenced by the work of International Monetary Fund (IMF) and the Organisation for Economic Co-operation and Development (OECD).

● Introduction

The World Trade Organization (WTO) is the primary international organization responsible for promoting free trade and resolving trade disputes among its member countries, including Argentina, Brazil, Germany, Italy, Mexico, Russia, and South Africa. The General Agreement on Trade in Services is one of the key agreements under the WTO, and it has been ratified by over 160 countries, including Albania, Bulgaria, Chile, Colombia, Croatia, and Cyprus. The agreement is based on the principles of most-favored-nation treatment (MFN) and national treatment, which are also enshrined in the GATT and other WTO agreements, such as the Agreement on Sanitary and Phytosanitary Measures (SPS) and the Agreement on Technical Barriers to Trade (TBT). The World Bank and the Asian Development Bank have also played a significant role in promoting trade in services among their member countries.

● History

The Uruguay Round of trade negotiations, which took place from 1986 to 1994, was a major milestone in the development of the General Agreement on Trade in Services. The round was launched by the GATT and was attended by over 120 countries, including Austria, Belgium, Denmark, Finland, Greece, and Ireland. The negotiations were led by the GATT Director-General, Arthur Dunkel, and resulted in the creation of the WTO and the signing of several key agreements, including the General Agreement on Trade in Services and the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS). The Tokyo Round and the Dillon Round of trade negotiations also laid the groundwork for the General Agreement on Trade in Services, which was influenced by the work of John Maynard Keynes and Milton Friedman. The Bretton Woods system and the International Trade Organization (ITO) also played a significant role in shaping the agreement.

● Key Provisions

The General Agreement on Trade in Services contains several key provisions that aim to promote free trade in services among its signatory countries, including Ecuador, Egypt, Hungary, Indonesia, Malaysia, and New Zealand. The agreement establishes the principles of most-favored-nation treatment (MFN) and national treatment, which require countries to treat foreign service providers no less favorably than domestic providers, as enshrined in the GATT and other WTO agreements, such as the Agreement on Subsidies and Countervailing Measures (SCM) and the Agreement on Safeguards (SG). The agreement also sets out rules for market access and domestic regulation, which are designed to prevent countries from imposing unnecessary barriers to trade in services, as outlined in the WTO Dispute Settlement Body and the WTO Appellate Body. The World Intellectual Property Organization (WIPO) and the International Labour Organization (ILO) have also played a significant role in shaping the agreement.

● Scope and Coverage

The General Agreement on Trade in Services covers a wide range of services, including financial services, telecommunications services, transport services, and tourism services, which are critical to the economies of countries such as France, United Kingdom, Spain, and Portugal. The agreement also applies to mode 1 (cross-border supply), mode 2 (consumption abroad), mode 3 (commercial presence), and mode 4 (presence of natural persons) of service supply, as defined by the WTO and the OECD. The agreement does not cover services supplied in the exercise of governmental authority, which are exempt from the agreement, as outlined in the GATS and the WTO Agreement. The United Nations Conference on Trade and Development (UNCTAD) and the Food and Agriculture Organization (FAO) have also played a significant role in promoting trade in services among their member countries.

● Negotiations and Amendments

The Doha Development Round of trade negotiations, which was launched in 2001, aimed to further liberalize trade in services and to improve the General Agreement on Trade in Services. The round was attended by over 150 countries, including Afghanistan, Algeria, Angola, Armenia, and Azerbaijan. The negotiations were led by the WTO Director-General, Pascal Lamy, and resulted in the signing of several key agreements, including the Bali Package and the Trade Facilitation Agreement (TFA). The Cancun Ministerial Conference and the Hong Kong Ministerial Conference also played a significant role in shaping the agreement, which was influenced by the work of Joseph Stiglitz and Amartya Sen. The International Chamber of Commerce (ICC) and the World Economic Forum (WEF) have also played a significant role in promoting trade in services among their member countries.

● Implementation and Impact

The General Agreement on Trade in Services has been implemented by over 160 countries, including Bahamas, Bahrain, Bangladesh, Barbados, and Belarus. The agreement has had a significant impact on trade in services, with many countries experiencing increased trade and investment in services, as outlined in the WTO Trade Policy Review and the OECD Economic Survey. The agreement has also helped to promote economic growth and development, particularly in developing countries and least developed countries, as defined by the United Nations Development Programme (UNDP) and the World Bank. The International Finance Corporation (IFC) and the Multilateral Investment Guarantee Agency (MIGA) have also played a significant role in promoting trade in services among their member countries. The General Agreement on Trade in Services has been influenced by the work of Nobel laureates such as Paul Krugman and Joseph E. Stiglitz, and has been shaped by the G20 and the G7 summits. Category:World Trade Organization