THE GATS AGREEMENT
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GATT – The General Agreement on Tariffs and Trade, was an agreement signed by 23 countries on October 30, 1947, to minimize setbacks on international trade through reduction and elimination of tariffs, quotas and subsidies as much as to preserve significant regulations.
The main difference between GATT and GATS is that GATT is the central agreement by the World Trade Organization covering trade on goods, whereas, GATS is an agreement by WTO that covers trade on services.
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The General Agreement on Trade-In services negotiations were aimed at reduction or elimination of the extreme effects on services trade, of measures as a way of providing access to markets effectively. This progressive liberation process was to be done through multilateral, bilateral or plurilateral negotiations, which targeted an increased overall level of specified duties partaken by the members.
GATS came into force in the year 1995, after negotiations during the final round of multilateral negotiations on trade, known as the Uruguay Round. It became the first multilateral agreement that covered trade-in services.
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All World Trade Organization members are entitled to take part in membership in GATS. These members, though, due to varying degrees, assume duties in individual service sectors.
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The main purposes of GATS include, among others: the creation of a reliable and credible international trade rules body, steering economic activities via secured policy bindings, boosting trade and development via means of step by step liberation, and finally, the principle of non-discrimination, assurance of fair and equitable treatment of all participants.
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GATS applies with regards and principle to and in all sectors of service, with only an exception of two sectors, these include:
Services offered in response to government authorities. These services are offered neither in competition with other suppliers nor on a commercial basis. Examples include public services such as education and health, unconditionally provided, or social security services.
Also, the control on Air transport services is exempted from measures of coverage that affect air transport services and rights directly in relation to the deliverance of the given rights.
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GATS classifies it’s supply services into four major categories: Cross-border trade or supply, which covers the flow of services from the territories of one member to that of the other; Commercial presence, where a service deliverer of one member creates a territorial establishment in another members’ area to provide service; Presence of natural persons, where persons from given members enter into another’s territory to provide services; Consumption abroad, a situation where a consumer gets into another members’ territory to be accorded services.
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Without access to efficient insurance, banking, accountancy, transport and telecoms systems, production and export of tangible products will not be effective. As much as the production and supply of goods are essential, that of services is as well destined, ultimately to satisfy individual demands and social needs, these and among the very many importance of service liberation to the economy.
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With regards to international politics and international economic relations, the most favored nation is a degree of treatment provided by one nation to another in international trade. This means that the receiving state of the given procedure has to nominally receive trade merits as the nation considered by the serving country, as the favored nation. Some of the general obligations include:: Measures to be administered in a reasonable, impartial and objective manner, specified duties not nullified through regulatory needs, and negotiations to be done on any required disciplines.