General Agreement on Trade in Service ( GATS )

The General Agreement on Trade in Services (GATS) is a multilateral agreement negotiated under the World Trade Organization (WTO) that regulates international trade in services. The GATS is the first and only comprehensive international agreement that covers all modes of supply of services, including cross-border trade, consumption abroad, commercial presence, and the presence of natural persons.

The GATS aims to liberalize trade in services by reducing trade barriers and establishing a transparent and predictable regulatory framework for services trade. The GATS applies to all services sectors, including financial services, telecommunications, transport, tourism, and professional services such as legal and accounting services.

The GATS requires WTO member countries to provide market access to foreign service providers, which means that they must allow foreign service providers to establish a commercial presence in their territory and to supply services across borders. However, countries may limit market access for reasons such as national security, public order, or protection of public health or morals.

The GATS also requires WTO member countries to ensure that their domestic regulations do not unnecessarily restrict trade in services. This means that regulations must be transparent, objective, and non-discriminatory, and should not constitute a disguised restriction on trade. Countries are allowed to maintain regulations that are necessary to protect public health, safety, or the environment.

The GATS provides for a framework for negotiations between member countries to further liberalize trade in services. It also establishes a mechanism for settling disputes related to the GATS, similar to the dispute settlement mechanism established under the WTO’s General Agreement on Tariffs and Trade (GATT). The GATS has been in effect since 1995 and has been the basis for many negotiations on trade in services among WTO member countries.