General Agreement on Trade in Services (GATS) is a crucial agreement that has been reached as part of the World Trade Organization (WTO) agreements. It was established to facilitate the development of trade in services between different countries.
The primary objective of the GATS is to promote transparency, predictability, and stability in the trade of services between countries. It achieves this objective by setting out a framework of rules and regulations that govern the trade of services, outlining the rights and obligations of the trading countries.
GATS aims to liberalize the trade of services globally by promoting fair and equal treatment of service providers from different countries. This agreement also aims to improve the access of service providers to foreign markets by eliminating trade barriers such as discriminatory regulations and standards.
GATS covers a wide range of service sectors, including financial services, telecommunications, transport, tourism, and many others. It provides a framework for member countries to negotiate their commitments to open up their markets to foreign service providers.
So far, more than 160 countries have become members of the WTO and are therefore bound by the GATS agreement. These countries have made commitments towards liberalizing their trade in services sectors, which means opening up their markets to foreign service providers.
The GATS agreement provides flexibility to countries, allowing them to make commitments based on their own priorities, interests, and circumstances. However, all member countries must follow certain rules and regulations, including the most favored nation principle, which prohibits discrimination against foreign service providers.
Moreover, GATS imposes obligations on member countries to ensure that both domestic and foreign service providers are treated equally in terms of regulation, taxation, and other trade-related matters. This approach is expected to create a level playing field for all service providers, thereby promoting healthy competition and innovation in the services sector.
In conclusion, GATS is a critical agreement that has played a significant role in the liberalization of global trade in services. It has created a level playing field for service providers worldwide and has helped in the economic growth of member countries. As a result, the agreement has become a key driver of globalization in the services sector.