INGENIEUR
of such trade under conditions of transparency
and progressive liberalisation and as a means
of promoting the economic growth of all trading
partners and the development of developing
countries.
GATS recognize the right of Members to
regulate, and to introduce new regulations, on
the supply of services within their territories in
order to meet national policy objectives and, given
asymmetries existing with respect to the degree
of development of services regulations in different
countries, the particular need of developing
countries to exercise this right.
GATS Article V Clause 1 states that GATS
agreement shall not prevent any of its Members
from being a party to or entering into any
agreement liberalising trade in services between
or among the parties to such an agreement,
provided that such an agreement:
Has substantial sector coverage;
●●
Provides for the absence or elimination
●●
of substantially all discrimination, in the
sense of Article XVII, between or among
the parties, in the sectors covered under
subparagraph (a), through,
i. Elimination of existing discriminatory
measures, and/or
ii. Prohibition of new or more
discriminatory measures,
Either at the entry into force of that
agreement or on the basis of a reasonable
time - frame, except for measures
permitted under Articles XI, XII, XIV, and
XIV bis.
Article XVII describes how Members handle
National Treatment. Each Member shall accord
to services and service suppliers of any other
Member, in respect of all measures affecting the
supply services, treatment no less favourable than
that it accords to its own like services and service
supplier. Formally identical or formally different
treatment shall be considered to be less favourable
if it modifies the conditions of competition in favour
of services or service suppliers of the Member
compared to like services or service suppliers of
any other Member.
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VOL 55 JUNE 2013
It should be noted that with the introduction
of GATS, Governments still have the power and
the right to regulate; the right to introduce new
regulations even after commitments to GATS.
Trade in Services
Traditionally, ser vices were considered not
“trade-able” and not storable. Services have
also been traditionally strongly monopolised by
Governments and Public Service. A majority of
services managed by Governments or Public
Service have been those that provide for noneconomic objectives and more focused on social,
cultural or safety objectives.
However, in the recent years Services have
become more trade-able as a result of technical
progress such as e-banking, telemedicine, and
distance learning. Furthermore, Government is
focusing on its core business and downsizing.
Hence, with market liberalisation and regulatory
reform, trade in services has been increasing.
World expor ts of goods and commercial
services have almost doubled since year 2000.
Service exports data by economic groups for
developed and developing countries for the
year 1980-2004 shows that in 1980, 80% of
the exports came from developed countries
while 20% came from developing countries,
including least developed countries (LDC)
and Commonwealth Indep endent S t ates
(CIS) countries. However in year 2004, the
percentages have changed to 76% for developed
countries and 24% for developing countries,
which includes LDC and CIS.
One obser vation from the above dat a
[Source WTO database] is that it seems the
develop ed countries combined benef ited
so much more from trade in ser vices and
li b e r alis a t i o n o f s e r v i c e s. F u r t h e r m o r e,
if we t ake into a c c o unt t h at t h er e ar e
more countries in the categor y developing
countries, LDC and CIS countries, then the
disparity between the benefit achieved by the
developed countries and the non- developed
countries will be huge.