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Basic Information on GATS

What is GATS?
What services are covered by GATS?
What laws are covered by GATS?
How can services be traded?
What kinds of rules does GATS have?
What is 'Most Favoured Nation Treatment' (MFN)?
What does 'Market Access' and 'National Treatment' mean?
What does 'Progressive Liberalization' mean?
What are 'National Schedules'?

What are 'Negotiating Proposals'?


What is GATS?
The General Agreement on Trade in Services (GATS) is the first set of multilateral rules covering international trade in services. It came into effect in 1995 and is being negotiated under the auspices of World Trade Organization (WTO).

GATS has three main parts: the main text with general principles and obligations; annexes with rules for specific sectors; and Member countries' specific commitments to provide access to their markets. The WTO provides links to the GATS text.

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What Services are covered by GATS?
GATS considers education as a tradable service. GATS covers 12 service sectors (Business; Communication; Construction and Engineering; Distribution; Education; Environment; Financial; Health; Tourism and Travel; Recreation, Cultural, and Sporting; Transport; "Other".). Two exceptions are services in the exercise of governmental authority and air traffic rights

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Which are laws are covered by GATS?
GATS applies to all measures affecting trade in services. GATS defines measures as all laws, regulations and practices from national, regional or local government or non-governmental bodies exercising powers delegated to them by government that may affect trade.

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How can services be traded?
GATS defines 4 ways that all services can be traded based on modes of supply:
1. Consumption abroad of service by consumers travelling to supplier country (e.g. students studying abroad);
2. Cross border supply of a service to consumer country without the supplier (e.g. open and distance education);
3. Commercial presence of a supplier in consumer country (e.g. offshore foreign universities); and
4. Presence of Natural Persons from supplying country in consuming country (e.g. professors, researcher working outside their home country).

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What kinds of rules does GATS have?
GATS has two broad categories of rules. The first category are general rules which apply, for the most part, to trade in all services. The second category are rules applicable to national commitments in specific service sectors.

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General Rules - Most Favoured Nation Treatment (MFN)
The most significant general rule is that of 'Most Favoured Nation Treatment' (MFN). MFN means that countries must give equal and consistent treatment to all foreign trading partners. WTO describes this as 'favour one, favour all'.

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Rules for national commitments - Market Access & National Treatment:
Market Access refers to the degree to which market access is granted to foreign providers in specific sectors. GATS sets 6 ways of limiting free market access. These limitations may not be applied unless their use is clearly provided for in the schedule of commitments. These limitations include : limitations on the number of service suppliers, limitations on the value of transactions, service operations or employees in the sector.

National Treatment means equal treatment for foreign and domestic services or service suppliers.

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What is Progressive Liberalization?
GATS has rules for Members schedules of specific commitments ('agenda for trade'). Through these schedules successive rounds of negotiations are foreseen to achieve progressively higher liberalization of trade in services.

What are National Schedules?
Each country must have a Schedule of Specific Commitments which identifies the service sectors that it is will open to foreign markets. These commitments also spell out any limitations on market access and national treatment.

What are Negotiating Proposals?
Negotiating Proposals outline the role of government, rationale/purpose of trade liberalization; benefits of trade liberalization; public private mix.

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References :
The Observatory on Borderless Higher Education (2002) Trade in Higher Education Services: The Implications of GATS, prepared by Jane Knight. This report is provided here, courtesy of the Observatory on Borderless Higher Education. Further resources and information relating to developments in borderless higher education are available on the Observatory's website.

WTO The General Agreement on Trade in Services (GATS): Objectives, coverage and disciplines. Prepared by the WTO Secretariat. Available from the World Trade Organization 'Services:Gats'.

WTO General Agreement on Trade in Services. Prepared from the WTO Secretariat. Available from the World Trade Organization 'Services: Agreement'.

WTO Services: rules for growth and investment. Prepared by the WTO Secretariat. Available from the World Trade Organization 'Trading into the future: The introduction to the WTO.

 


This section is prepared in the framework of the Global Forum on the International Dimensions of Quality Assurance, Accreditation and the Recognition of Diplomas. It will be regularly updated. Please send us your suggestions.

Intro| What is GATS?| GATS and HE| Links| Negotiating Proposals

 

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