SCOPE

 Introduction
 Main principles and scope
 Related sectors and sub sectors
 How does GATS work?
 Modes of trade
 Gats and public services
 Gats and health care systems
 Conclusion
INRODUCTION
The General Agreement on Trade in Services (GATS) is the first multilateral
agreement covering trade in services. It was negotiated during the last round of
multilateral trade negotiations, called the Uruguay Round, and came into force in 1995.
The GATS provides a framework of rules governing services trade, establishes a
mechanism for countries to make commitments to liberalize trade in services and
provides a mechanism for resolving disputes between countries.
The GATS requires all members to be transparent about the conditions for doing
business in their countries. It also requires that members not discriminate among
foreign service providers seeking access to their markets. This is known as most-
favoured nation (MFN) treatment.
MAIN PRINCIPLES AND SCOPE
Similar in principle to the General Agreement on Tariffs and Trade (GATT), which
deals with trade in goods, the GATS has two primary objectives: first, to ensure that all
signatories are treated equitably when accessing foreign markets; and second, to
promote progressive liberalization of trade in services (over time, eliminating trade
barriers to enable further participation in one another's markets). GATS cover almost all
services, in total 155 service sectors However it does not cover services supplied in the
exercise of government authority
The GATS allows each member to choose - through its specific commitments - to
what extent it wishes to open its markets to foreign service providers. The GATS
recognizes the right of governments to regulate services in order to meet national policy
objectives. The GATS further states that liberalization shall take place with due respect
for the level of development of individual members and that special consideration shall
be given to the least-developed countries.
RELATED SECTORS & SUB SECTORS OF GATS
 Business Services
a) professional services
 - Medical and Dental Services
- Midwives, nurses, paramedical services
 Financial Services
- All insurance and insurance-related services
 Health Related and Social Services
a) Hospital Services
b) Other Human health services

HOW DOES GATS WORK?

The GATS provides for successive rounds of negotiations to take place in order
to progressively increase the level of commitments. Currently, individual country
commitments with respect to market access and national treatment are most common in
the areas of distribution, tourism, banking, insurance, telecommunications and
professional services.
The two key obligations of the GATS are national treatment (i.e. foreign service
suppliers must be treated the same way as domestic suppliers) and market access (i.e.
certain quantitative restrictions to market access are prohibited). They apply only in
sectors where countries undertake specific commitments. These commitments are
listed in country-specific schedules that list the conditions, for each sector, under which
market access and national treatment are guaranteed.
MODES OF TRADE
1. Cross-Border Supply or Mode 1- is when a service is supplied from the
territory of one Member into the territory of any other Member. This is most often done
using electronic delivery (i.e. telephone, fax or internet)
Example: A user in country A receives services from abroad through its
telecommunications, information technology or postal infrastructure. Such services may
include consultancy or market research reports, tele-medical advice, distance training,
or architectural drawings. As per data Mode 1 contributes to 35% of services trade
internationally. There are several sectors where Mode 1 is important, these include:
Professional Services
Computer Related Services
Telecommunication Services
Courier Services
Other Sectors conducive to Consultancy Services
 2. Consumption Abroad or Mode 2- refers to a service which is supplied when
consumers from one country make use of a service in another country.

Example: Nationals of country A have moved abroad to country B as tourists, students

or patients to consume the respective service. Mode 2 contributes to 10% to 15% of
services trade internationally.

Mode two is very relevant in the Tourism Sector.

3. For commercial Presence or Mode 3- this covers services supplied by a

services supplier of one Member by establishing a presence in the foreign market by
opening an office in the territory of any other Member. This could be done by a
company setting up a subsidiary or branches in another country.

Example: The service is provided within country A by a locally-established affiliate,

subsidiary, or representative office of a foreign-owned and controlled company, such as
a bank, hotel group or construction company. Mode 3 contributes to 50% of services
trade internationally. This mode is very important on the following sectors:
Financial Services
Oil, Gas and Mining Services
Telecommunication Services
Environmental Services

4. Temporary Movement of Natural Persons or Mode 4 covers services supplied

by a service supplier of one Member through the presence of natural persons of a
Member in the territory of any other Member. For example, this is often done through
the movement of company staff to other countries.
Example: An advance team of engineers preparing for an investment in another
country, a consultant or manager traveling from their country to another country to
supply their service. Mode 4 contributes to 1% - 2% of services trade internationally.
Mode 4 is very important on Sectors which include:
Information Technology
Professional Services
Other services where the movement of service supplying personnel is crucial (i.e.
after sales services)
GATS AND PUBLIC SERVICES

The GATS applies to all measures affecting trade in services, including

measures taken by regional or local governments (such as provinces and
municipalities) and non-governmental bodies that exercise delegated authority (such as
self-regulatory professional bodies). The GATS does not apply to "services supplied in
the exercise of governmental authority" (i.e. services that are supplied neither on a
commercial basis nor in competition with one or more service suppliers, including those
in the fields of health and public education).

GATS A ND HEALTH CARE SYSTEMS

MODE OF TRADE HEALTH SERVICES

1) Cross- border supply - Telemedicine

2) Consumption abroad - Patients seeking health care in foreign countries.

- Medical health educational services provided to
foreign students.

3) Commercial Presence - Foreign commercial presence:

a. In hospital operation/ management sector
b. In the health insurance/education sector
4) Presence of natural persons - Temporary movement of medical health
professionals to provide services abroad.
CONCLUSION
GATS is “ first and foremost, an instrument for the benefit of business, and not only for
business in general, but for individual service companies wishing to export services or
to invest and operate abroad.

REFERENCES

 https://www.slideshare.net/DhanyaAgri/gats-65497242
 https://www.coursehero.com/file/32557888/GATS-PPTppt/
 https://www.international.gc.ca/trade-agreements-accords-commerciaux/wto-
omc/gats-agcs/index.aspx?lang=eng