General Agreement on Trade in Services (GATS)

General Agreement on Trade in Services (GATS)

The GATS is composed of a preamble and six parts 29 lines. The first 28 lines are framework agreements, which sets out the principles and rules for the liberalization of trade in services. The 29 line is annex (8 annexes in total). These include: scope and definition, general obligations and disciplines, specific commitments, progressive liberalization, institutional clauses, final clauses and so on, the core are MFN, national treatment, market access, transparency and payments and transfers of the free flow. GATS applies to policy measures adopted by members to influence trade in services, including those adopted by central government, regional or local governments and authorities and non-governmental organizations whose powers are delegated.

The GATS aims to expand the global trade in services and promote economic growth and the development of member services in developing countries, in the context of transparency and progressive liberalization. Taking into account the imbalances in the development of trade in services among members, the agreement allows members to carry out the necessary management of trade in services and encourages developing country members to become more involved in world trade in services by enhancing their domestic service capacity, efficiency and competitiveness.

The GATS stipulates that international trade in services includes four ways:

1, Cross-border Supply

2, Consumption Abroad

3, Commercial Presence

4, Movement of Natural Persons

The GATS covers 12 sectors: business, communications, construction, marketing, education, environment, finance, health, tourism, recreation, transportation and others, divided into more than 160 sub-sectors. The Agreement sets out the general obligations and principles, consultation and dispute settlement steps that all members must follow.

In accordance with the provisions of the Agreement, the WTO established the Council for Trade in Services, responsible for the implementation of the Agreement. As China entered WTO for more and more years, China would become a key player of GATS.