General Agreement On Trade In Services Research Articles

The Recent Development On The Discipline Of Services Domestic Regulation And The Debate On The Necessity Test: From The Perspective Of The CPTPP, RCEP, And SDR Reference Paper

The discipline of services domestic regulation (“SDR discipline”), with a view to ensuring progressive liberalization of trade in services while also respecting the national regulatory prerogatives at the same time, addresses issues concerning the formulation, publication, and administration of SDR, and the authorization for the supply of a service. In addition to Article VI General Agreement on Trade in Services (GATS), an increasing number of international trade agreements has developed the SDR discipline with GATS-plus or GATS-extra characteristics, which helps enhance the transparency and regulatory quality of SDR, promote trade facilitation and increase the predictability and efficiency of authorization procedures for the services providers hoping to do business in foreign markets. This paper investigates the negotiating history of the SDR discipline at the multilateral, plurilateral, and regional levels, explores the evolving trends of the SDR discipline from the perspective of the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), Regional Comprehensive Economic Partnership (RCEP), and the Reference Paper on SDR, and addresses the debate on the necessity test surrounding the SDR discipline negotiation. services domestic regulation, necessity test, transparency, trade facilitation, predictability of authorization, gender equality

The Magnificent Seven: Exemption, Relief, Equivalence, Recognition, Substitution, Deference, Trust – Reducing Regulatory Duplication and Frictions in the Cross-Border Supply of Financial Services

AbstractA financial services supplier authorised in its home state that wishes to supply services cross-border into another state will, absent any relief, have in addition to meet the regulatory requirements of that host state to trade in it. Regulatory frictions including duplicative regulatory requirements are barriers to cross-border trade. This article considers certain techniques deployed to reduce such barriers, noting that trust plays a part in many of them. These techniques grant relief to incoming firms from obligations to comply with the regulatory requirements of a host state. They may take the form of unilateral arrangements, with or without any conditions. There may be assessments of equivalence as a basis for relief from compliance with the host state’s rules: deference to the home state’s regime, a basis for recognition, whether unilateral or mutual. Recognition may be given effect through a party’s domestic laws or in international law under the General Agreement on Trade in Services (GATS) Article VII. A GATS Article VII agreement can relieve regulatory frictions in the financial services sector alone as there is no requirement for “substantial sectoral coverage” as required for regional trade agreements under GATS Article V. Mutual recognition agreements for financial services in international law are, however, few in number.

Should digital taxation be in sync with the OECD-G20 Two-Pillar Framework? An Analysis of the Equalization Levy in India and Its Aftermath.

The flourishing growth of the digital economy in India has made digital taxation an indispensable system in India’s revenue generation. The study provides a detailed assessment of the OECD (Organization for Economic Cooperation and Development)- G20(Group of 20) group’s initiatives on digital economy taxation. Furthermore, there is an in-depth analysis of the limitations of the Indian ‘Income Tax Act 1961’ and the subsequent adoption of the equalization levy. The effect of equalization levies on tax treaties, rules, and the General Agreement on Trade in Services (GATS) are examined in detail. The economic impact of the equalization levy is also evaluated by analyzing the digital trade restrictiveness index. Finally, an evaluation is carried out on the OECD- G20 Two-Pillar framework on the background of the problems of digital taxation. The study also examines the growth of the equalization levy in India and assesses the USTR (United States Trade Representative) report in light of the equalization levy.

The Time Factor in the MFN Obligation in Services Trade: Will the Lion Ever Roar?

Trade disciplines under the General Agreement on Trade in Services (GATS) apply to the treatment of products (i.e., services) and to that of producers (i.e., service suppliers). Unlike rules on merchandise trade, the GATS thus covers the conditions governing a producer’s commercial establishment and, hence, its competitive position. That raises the question whether Members are free to modify these conditions over time or, instead, whether they are required under the GATS Most-Favoured-Nation (MFN) obligation to provide newly arriving producers with the most attractive conditions they accorded in the past. In the latter case, Members might shy away from launching trade-promoting initiatives beyond their existing GATS commitments, which have remained quite modest overall. As a way forward, Members could consider an informal understanding, possibly inspired by recent regional trade agreements (RTAs), to clarify the application of the GATS MFN obligation over time. services, trade in services, GATS, RTAs, most-favoured nation, MFN, discrimination, time factor, temporal effect

The Impact of GATS on the Insurance Sector: Empirical Evidence from Pakistan

Abstract This study aims to analyse the effects of the General Agreement on Trade in Services (GATS) on the investment activities of the Pakistani insurance sector. First, we analyse the impact of GATS on the overall and company-wise return on investment of the insurance sector of Pakistan. In a panel data setting, the traditional fixed and random effect models are unsuitable for dealing with the possible issues, including endogeneity, unobserved heterogeneity, profit persistency, and the correlation between lagged dependent variables and independent variables. Therefore, we apply the Generalised Method of Moments (GMM) system estimator to the panel data from 1984 to 2018. In the Arellano-Bond framework, the estimated results indicate that the overall investment returns of the Pakistani insurance sector have increased after the GATS membership. However, company-wise analysis reveals mixed evidence. The average returns of IGI Insurance Limited and EFU General Insurance Limited have increased significantly after the GATS membership. These results support one of our empirical conjectures that a rising tide lifts some boats more than it does others. Then, we apply Markowitz’s Portfolio Theory to estimate the portfolio returns and the associated risk using the financial statements data from 1984 to 2018. The estimates of portfolio analysis reveal that the portfolio returns of the Pakistani insurance sector improve by 6.70 percentage points after the membership. However, the associated portfolio risk also increases by 11.13 percentage points, 7.40 times higher than the Pre-GATS risk. Despite the better returns, there is an intensive increase in investment volatility after GATS membership. This study provides a valuable reference for insurance managers and the Ministry of Finance and Securities & Exchange Commission of Pakistan to control and improve the insurance sector’s performance in Pakistan.

FDI in Tourism and the Feasibility of Incorporating the UN Guiding Principles on Business and Human Rights in Indonesia

Foreign direct investment (FDI) is critical to Indonesia's economic development. Tourism is one of the most appealing investment industries. It has made a significant contribution to employment creation, tax revenue and domestic value addition. However, FDI in tourism has had negative environmental consequences. Moreover, Indonesian trade agreements and investment treaties do not reflect environmental concerns. The schedule under the General Agreement on Trade in Services (GATS) follows a similar trend, although other countries’ practices have shown that Indonesia can add this concern. Domestic laws and policies are also silent because the goal of economic growth outweighs protecting the environment. The United Nations Guiding Principles on Business and Human Rights (Guiding Principles) govern states' obligations to defend human rights and companies' obligations to respect and give remedy. This article examines the feasibility of incorporating the Guiding Principles into FDI in tourism. The Guiding Principles, together with the Global Code Ethics for Tourism, would provide a starting point for more robust legal frameworks for foreign tourism companies and emphasise sustainable development.

The H-1B Visa and US GATS Market Access Commitments: Options and Strategies for India

Indian IT firms and professionals have been one of the primary beneficiaries of the US H-1B visa. However, the new US ‘buy American, hire American’ policy and the consequent suspension of the H-1B visa have resulted in India’s claims that the US measures are discriminatory and not in compliance with various provisions of the World Trade Organization’s (WTO) General Agreement on Trade in Services (GATS). The present article aims to assess the consistency of the US measures on H-1B category visa in the context of its specific commitments under Mode 4 of GATS and explore India’s options in finding a suitable solution. Our analysis posits that India’s concerns are well-founded, and the US measures at issue may have direct implications on its commitment under the GATS Schedule of Commitments. At the same time, for India, the option of the invocation of the WTO redressal process to force the well-guarded discretionary sovereign power associated with entry visas could be counterproductive and finding a mutually beneficial solution seems to be the way forward. The article will also help understand and explore India’s options in dealing with the highly sensitive area of entry for foreign nationals that falls under the domain of sovereign prerogative of a State.

An Overview of the WTO’s Plurilateral Agreement on Services Domestic Regulation

TheWTO’s General Agreement on Trade in Services (GATS), which has been in effect since 1995, has been used byWTO Members to facilitate increased growth in trade in services by regulating global transactions on trade in services in line with the specific commitments undertaken by everyWTO Member in the GATS. However, growth in trade in services has been clouded by significant barriers to trade in services that continue to exist in many countries in the form of unintended trade-restrictive measures across most services sectors, obscure regulations, and burdensome regulatory procedures. The successful conclusion of the Reference Paper on services domestic regulation is an effort to reduce these barriers and further stimulate trade in services. WTO, GATS, Services Domestic Regulation, Joint Initiative, Plurilateral Declaration, Negotiated Disciplines, regulatory processes, Reference Paper, barriers to services trade, predictability and transparency

Interpreting GATS Schedules: Saudi Arabia and Crude Oil Energy Services

The world has become increasingly sensitive to the need to shift away from the utilization of crude oil and other fossil fuels. Nonetheless, the former continues to be a major contributor to the energy industry. Many crude oil-rich nations rely on foreign suppliers to provide them with production know-how and technology services within the ambit of the 1994 General Agreement on Trade in Services. While the General Agreement on Trade in Services (GATS) contains several obligations of importance, the focus here is on the agreement’s market access and national treatment obligations. More narrowly, the Schedule of service sector commitments agreed to by Saudi Arabia, the world’s single largest crude oil exporter, is examined in the context of three important sectors essential to the crude oil industry. The examination is conducted through the lens of the basic interpretive principles articulated in and gleaned from the small handful of World Trade Organization (WTO) adjudicative decisions addressing the matter of GATS Schedule interpretation. This approach illustrates how those principles operate in the context of real language deployed in the actual Schedule of an important energy supplier. market access, national treatment, MA, NT, ‘bound’, ‘unbound’, ‘none’, horizontal, engineering, mining, construction, pipelines, Vienna Convention, CPC, Sectoral Classification, Article XVI, Article XX, Saudi Arabia

TV Quotas Under the AVMS Directive After Brexit

The European Union (EU)’s Audiovisual Media Services Directive 2010/13/EU (AVMS Directive) requires broadcasters to seek to ensure that a majority of transmission time is dedicated to ‘European works’. The definition of eligible works for this cultural quota includes states party to the European Convention on Transfrontier Television (ECTT), of which twenty EU Member States and the UK are among the members. EU broadcasters can hence satisfy the quota with UK works. It appears, however, that post-Brexit the European Commission contemplates an attempt to exclude UK works from the definition, so as to enlarge the share of the market available to EU Member State producers. This article examines that ambition against the obligations of the EU and its Member States under the General Agreement on Trade in Services (GATS) and the ECTT, concluding that several obstacles stand in the way of achieving that policy goal. AVMS, ‘Television without Frontiers’, European works, broadcasting quota, Brexit, GATS

The Effect of WTO Membership on Service Sector Trade Liberalization

A large portion of labor and trade in most countries is devoted to the service sector, and thus service sector impacts are crucial to a full understanding of the effects of WTO membership. The effect of WTO membership on trade volume has been subject to debate in the past, but critically, these studies have failed to examine service sector trade specifically. Conventional wisdom would seem to suggest that WTO membership should have boosted services trade, particularly after the implementation of the General Agreement on Trade in Services (GATS) in 1995. However, the relationship has yet to be rigorously tested. Here, I use data comprising 178 countries across a span ranging from 1995 until 2015 to examine the impact that WTO membership, and specifically WTO accession, has had on service sector trade levels relative to goods trade levels after the adoption of GATS. Statistical tests yield weak evidence for any significant relationship between WTO membership and service sector trade, with some possible exceptions for states that underwent many rounds of negotiations. This exception is explored further through a comparison of the WTO accessions of China and Vietnam. However, even in these extreme cases, it is difficult to find clear evidence of service sector liberalization. Overall, the findings imply that, in almost all cases, WTO rules and accessions have underemphasized service sector trade in favor of agricultural and goods trade, generating lopsided impacts to trade efficiency.

Economic Migration, the Last Frontier

Moving goods and services is much easier than moving labor and obstacles to migration represent the biggest difference between the wave of globalization we are experiencing and that which occurred more than a hundred years ago. Universally, the General Agreement on Trade in Services (GATS) is the only multilateral treaty that specifically deals with the admission of migrants for labor purposes. Relevantly, according to some estimates, elimination of immigration controls would more than double the world’s real income. Despite the prospect of such significant welfare gains, migration is the most sensitive of all aspects of globalization, one of the most virulent political issues in international law and the unexplored frontier of globalization. Political realities largely explain the resistance, especially in wealthy countries, to liberalizing the flow of workers.

A Study on Likeness of Services and Service Suppliers under the GATS

WTO의 서비스무역 분쟁에서 피제소국과 제소국 간의 분쟁대상이 되는 서비스 및 서비스 공급자에 대한 동종성 판단 여부는 가장 핵심이 되는 이슈이다. 특히 그 분쟁이 GATS의 제2조(최혜국대우) 혹은 제17조(내국민대우)에 관한 사안일 경우 동종성 판단이 선행되지 않고서는 해당 분쟁을 자체를 논하거나 판결할 수가 없기 때문에 그 중요성은 매우 크다고 할 수 있다. 동종성 판단이 단순하지 않은 이유는 우선 GATS 협정문에 ‘동종’에 대한 명확한 정의가 내려져 있지 않기 때문이다. 나아가 상품과는 달리 서비스의 무형성 때문에 GATS의 서비스 및 서비스 공급자의 동종성에 관한 판단은 GATT의 동종 상품 판단에 비해 모호해질 수밖에 없고 이는 더욱 면밀하고 복잡한 분석 절차를 요구하게 된다. 한편 CPC는 각 회원국의 양허표상 서비스 분류에 대한 기준을 제시해주는 반면에 단순히 CPC 분류만으로는 해당 서비스의 동종성에 대한 직접적 판단이나 비약적인 결론을 내릴 수는 없다. 동종성 판단에 대한 법적인 기준은 그동안 다양한 GATS 분쟁을 통해 논의되어 왔으나 지금까지도 명확한 기준이 되는 리스트가 제시되지는 않은 상태이다. 따라서 본 연구를 통해 지금까지 GATS의 동종성이 이슈가 되었던 7개의 WTO 분쟁사례에 대한 패널 및 상소기구 보고서를 분석함으로써 동종성 판단에 대한 분쟁 당사국들의 주장과 논거를 살펴보고 각 분쟁에서 동종성 판결의 근거가 된 법리를 종합하여 향후 적용 가능한 기준을 도출해보도록 한다.A determination on “likeness” between domestic and foreign services and service suppliers is one of the most critical issues in disputes under the General Agreement on Trade in Services (GATS). Likeness under the GATS requires a complex analysis because the term “like” is not defined in the GATS text itself. In the meantime, the intangible nature of services and its four different modes of supply make it inappropriate to transpose the traditional like standards used under the GATT. While the “CPC” provides a list of services classification for the schedule of specific commitments for Members, the categories alone do not fully solve the question of likeness. Therefore, this article seeks to discuss seven GATS dispute cases where the likeness of services and service suppliers was analyzed and determined and provide some level of a general rule for likeness determination extrapolated based on the reasoning of the panel and Appellate Body in these disputes.

When International Trade Law Meets Tax Policy: The Example of Digital Services Taxes

With the rise of digital services taxes (DSTs) all over the world, questions have arisen regarding their compatibility with international trade law. Between 2019 and 2021, the United States initiated investigations into several DSTs and published observations on the DSTs adopted by Austria, France, Italy, India, Spain, Turkey and the United Kingdom. In addition to the argument that these taxes violate international tax principles, the US considers that they are discriminatory. This article uses this claim as a basis to analyse the likelihood for DSTs to be incompatible with World Trade Organization (WTO) law. First, it provides an overview of the unilateral, regional and multilateral tax proposals to mitigate the challenges of the digitalized economy. Second, it discusses the main legal issues that could arise under the law of the WTO, focusing on legal issues under the General Agreement on Trade in Services (GATS). While recognising that there may be good tax policy reasons to oppose DSTs, this article concludes that arguments based on WTO law provide, if at all, a weak justification to oppose such taxes. Digital Service Taxes (DST), GATS, Unilateral taxes, Digitalized economy, Destinationbased taxes, National treatment, Most-favoured-nation principle, Non-discrimination of services and service providers

Case C-66/18

On October 6, 2020, the Court of Justice of the European Union (CJEU) handed down its judgment in Commission v. Hungary. It found that Hungary had violated the General Agreement on Trade in Services (GATS), as well as internal European Union law—specifically the EU Charter of Fundamental Rights (EU Charter). The case arose out of Hungary's 2017 amendment to its higher education law. The amendment imposed two novel requirements on foreign universities operating in Hungary. It barred any non-EU university from operating unless its country of origin concluded a specific enabling treaty with Hungary. Moreover, it required that the foreign university actually provide educational services in its country of origin. While framed in general terms, it is hard to avoid the conclusion that the 2017 amendment was aimed at ending the operations of the Central European University (CEU) in Hungary.

The CJEU in Commission v Hungary Higher Education Defends Academic Freedom Through WTO Provisions

AbstractThe Court of Justice of the European Union (CJEU) in Commission v Hungary Higher Education ruled that the legal conditions introduced to enable foreign higher education institutions to carry out their activities in Hungary are incompatible with EU law. The Commission referred Hungary to the CJEU, claiming that the amendments to the Higher Education Act of 2011 are incompatible with Hungary's commitments as a member of the EU within the following frameworks: the General Agreement on Trade in Services (GATS); the freedom of establishment; the free movement of services; the provisions of the EU Charter of Fundamental Rights relating to academic freedom; the freedom to found higher education institutions; and the freedom to conduct a business. This note explains that Commission v Hungary Higher Education is the latest example of the ongoing efforts in Hungary to undermine the rule of law and threaten academic freedom in the EU

Water is the ‘Blue Gold’: Upholding Access to Water as a Human Right in Ghana

Protecting access to water represents human dignity and remains the traditional right upon which other forms of human rights are realised. This article argues that privatisation of Ghana Water and Sewerage Corporation (GWSC), which was conceived by the IMF/WB, and facilitated by the WTO’s General Agreement on Trade in Services (GATS); disfigures the humanity of poor Ghanaians, who lack the financial resource to purchase water. Similarly, it contends, that guided by avarice and greed, some MNCs characterised water as ‘blue gold’ to be exploited for financial and economic gains; thereby undermining the communal status of water, as stipulated in the water policy of Ghana. The article further argues, that by eschewing corruption-related practices, the Ghanaian government as well as state institutions, especially the judiciary, should protect the people’s access to water-supply; by construing international human rights instruments and domestic constitution to the people’s access to water. Keywords: Access, Water, human rights, GATS, Trade Liberalisation, Corruption, IMF/WB DOI: 10.7176/JLPG/110-08 Publication date: June 30 th 2021

Regulating Foreign Labor in Emerging Economies: Between National Objectives and International Commitments

The dialectics of the regulation of foreign workers, is a problematic indication as a legal problem in Indonesian legislation. This article aims to describe the urgency of critical studies concerning the regulation of foreign workers by exploring existing legal problems with national commitments to ratify international agreements regarding free trade, with a case study in Indonesia. By using normative and juridical approach with a variety of approaches both the law approach, conceptual approach, case approach and comparative approach, the study found that the regulation there is an inconsistency clause regarding special competencies that must be owned by foreign workers, including the selection and use of terminology in Act No. 13 of 2003 concerning Manpower. Thus, this study offers a constitutional solution due to the regulation of the subordinate foreign workers on international trade commitments which in turn negate the constitutional goals of creating the welfare of domestic workers. The normative consequences that immediately bind Indonesia after integrating itself in the World Trade Organization (WTO) membership are services trade agreements that are contained in the regulations of the General Agreement on Trade in Services (GATS). Based on the GATT/WTO rules, national legislation or labor regulations that are too protective are considered to violate WTO provisions because the WTO substantially requires the creation of policies without discrimination in all matters including equalizing the position of foreign workers and domestic workers. The final finding of this study offers to draft the concept of future regulation regarding the regulation of foreign workers who are loaded with elements of the objectives of constitutional-based law.
 
 Received: 25 September 2020 / Accepted: 9 April 2021 / Published: 10 May 2021

No More Strategical Neutrality on Technological Neutrality: Technological Neutrality as a Bridge Between the Analogue Trading Regime and Digital Trade

AbstractThe World Trade Organization (WTO), a unique multilateral trading regime, has failed to establish its relevance to the digital nature of trade. This article revisits the ‘principle of technological neutrality’ to make the cross-border supply of services by electronic means subject to the current rules-based trading regime. I argue that the principle of technological neutrality could help resolve a number of thorny legal issues: confirming the applicability of the General Agreement on Trade in Services (GATS) rules to the delivery of services by electronic means; providing a guideline to determine the likeness of services in the era of digital trade; and backing up an evolutionary approach to interpreting the GATS schedules of commitments. However, the WTO adjudicatory bodies have been reluctant to rely on the principle of technological neutrality, which is referred to as strategic neutrality in this article. This article urges the WTO adjudicatory bodies to abandon their strategically neutral position on technological neutrality immediately. It also explores ways to incorporate the principle of technological neutrality into the world trading system at the bilateral, plurilateral, and multilateral levels.

Unpacking the Concept of ‘Energy Security’: Lessons from Recent WTO Case Law

‘Energy security’ is a crucial concept in international relations, as well as in international (economic) law. Although no international legal definition of this multi-layered notion exists, and the concept has been recognized as ‘vague’ in international relations literature, it remains a term that is used time and again by states when referring to measures taken in connection with safeguarding their national energy supply. This contribution identifies the various dimensions of the concept of energy security, after which it studies its role in international (economic) law and zooms in on the World Trade Organization (WTO). It critically assesses how the panel and Appellate Body (AB) have dealt with WTO Members’ arguments connected to energy security in two recent WTO disputes, India – Solar Cells and EU – Energy Package. The article demonstrates that while energy security concerns may be a valid basis for defending a Member’s measure, they will not hold if that measure is applied in a discriminatory manner. This may be problematic, as energy security concerns are frequently geo-political in nature and may be inherently discriminatory. The contribution also explains why ‘long-term energy security’ defenses are more likely to meet the threshold of the Article XIV(a) General Agreement on Trade in Services (GATS) public policy exception, rather than the ‘products in local short supply’ exception of Article XX(j) GATT. Energy Security, ECT, IEA, OPEC, PTAs, WTO, dispute settlement, public policy exception, local short supply