Trade in Services and Regulatory Flexibility: 20 Years of GATS, 20 Years of Critique

Abstract

The General Agreement on Trade in Services (GATS) was a key achievement of the multilateral trade negotiations during the Uruguay Round. Twenty years later, the service sector is probably the most dynamic economic sector. The expansion of global value chains and of the on-demand economy will only increase the importance of services. However, the relevance of the GATS for the global economy has suffered from the deficiencies of the GATS legal framework. The purpose of the present article is not to defend the GATS. The GATS is an artefact of the 90s that struggles to remain a living instrument amidst the most severe existential crisis that has ever hit the multilateral trading system. Rather, this contribution aims at offering an account of the GATS birth defects, critically review its inability to take stock of the progress made the last 15 years of multilateral trade negotiations, discuss its development-related potential and assess its future prospects amidst regional service-related initiatives that threaten its existence, including the Transatlantic Trade and Investment Partnership (TTIP) and the Trade in Services Agreement (TiSA). A key conclusion of this paper is that a ‘GATS 2.0’ is warranted and should be focused on guaranteeing non-discrimination and ensuring good governance.