The General Agreement on Trade in Services (GATS) is one of the founding treaties of the World Trade Organization. It came into force in 1995 and applies to trade in services the same logic that the GATT had applied to goods since 1947: members open their markets, treat foreign suppliers like domestic ones and bind those commitments so they cannot easily be withdrawn.
How it is built
GATS covers four “modes” of supply: cross-border trade (an architect e-mails plans abroad), consumption abroad (a tourist or a student), commercial presence (a bank opens a branch) and the movement of natural persons (a consultant works abroad temporarily). Unlike the goods agreement, GATS is a “positive list”: a country is only bound in the sectors it has explicitly scheduled, and it can attach limits. General obligations such as most-favoured-nation treatment and transparency apply across the board.
The controversy
Around 2000 the WTO opened a new round of services negotiations, and campaigners in Europe, Canada and elsewhere argued that GATS could force the liberalisation of education, health, water and culture. The agreement exempts services “supplied in the exercise of governmental authority”, but only if they are provided neither commercially nor in competition with other suppliers, a condition that few modern public services meet. Teachers’ unions, local councils and researchers such as the Belgian analyst Raoul Marc Jennar pushed for public services to be excluded outright. The EU eventually kept education, health and audiovisual services out of its offers.
Where it stands
The Doha Round, launched in 2001, never concluded, so the GATS schedules of most countries still date from 1995. Services liberalisation has since moved into bilateral and regional agreements and into the plurilateral Trade in Services Agreement negotiations, which stalled in 2016. A WTO “joint initiative” on services domestic regulation, concluded in 2021 by about seventy members, is the main recent result. The old campaign questions about public services have shifted to investment protection chapters and to digital trade rules.
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