GATS and Public Health Care: An Uneasy Relationship

Abstract

The General Agreement on Trade in Services (GATS) has been at the epicenter of public discussions due to its possibly adverse effects on the domestic regulation of public services. While the GATS has an admittedly broad scope, its ‘bite’ largely depends on commitments undertaken by WTO Members. The paper critically reviews the current legal framework affecting trade in services and identifies its weaknesses, most notably caused by the various built-in negotiating mandates in the GATS. To date, commitments in health services are fairly modest and the prospects for bolder commitments in the current round of negotiations are weak. The paper argues that there is a variety of reasons for this, including the outdated services sectoral classification system used in the GATS; the uncertainty about the scope of various GATS provisions; and intensive lobbying against liberalization. Meanwhile, global trade in health services grows apace irrespective of the GATS current impasse. Developing countries do play an active role in this equation, but in an unbalanced and uncoordinated manner. Drawing from the EU experience, the paper predicts that, when it comes to health issues, adjudication at the global level will exercise deference. This confirms that the health sector belongs to the very core of those sensitive services in which even successful preferential trade agreements failed to bring about considerable openness.