General Agreement on Trade in Services (GATS) is a treaty established within the framework of the World Trade Organization (WTO) that governs international trade in services. The aim of this agreement is to create a level playing field for trade in services among member countries, and to promote the development of free and fair trade in services.
The GATS was signed on April 15, 1994, and came into effect on January 1, 1995. It is a comprehensive and binding agreement that covers 160 different service sectors, including financial services, telecommunications, transportation, and professional services.
The GATS agreement has several key principles that guide the way in which member countries can regulate or restrict trade in services. One of these principles is the Most Favored Nation (MFN) approach, which means that member countries must treat all other member countries equally, without discrimination.
Another key principle of the GATS is the National Treatment approach, which requires member countries to treat foreign service providers in the same way as their domestic service providers. This means that foreign service providers must have access to the same market and be subject to the same regulations as domestic providers.
The GATS also includes provisions for the progressive liberalization of trade in services, which means that member countries are required to remove any restrictions on trade in services over time. This includes reducing barriers to market access, such as quotas and licensing requirements, and ensuring that regulations are transparent and non-discriminatory.
In order to ensure that member countries comply with the provisions of the GATS, the agreement includes a dispute settlement mechanism. This mechanism provides a process for resolving disputes between member countries over the interpretation or implementation of the agreement.
The GATS is an important agreement for promoting free and fair trade in services among member countries. It provides a framework for reducing barriers to market access and ensuring that regulations are transparent and non-discriminatory. By promoting greater trade in services, the GATS can help to stimulate economic growth and development in member countries, and provide consumers with access to a wider range of services.