The General Agreement of Trade and Services (GATS) is a multilateral agreement that was created to govern international trade in services. It is an important component of the World Trade Organization (WTO), and its main objective is to promote free trade in services across the globe.
GATS was negotiated during the Uruguay Round of trade negotiations, which was held from 1986 to 1994. The agreement was signed in 1994 along with the other agreements that emerged from the Uruguay Round. It came into force in 1995 alongside the establishment of the WTO.
The goal of GATS is to create a fair and transparent environment for international trade in services. It provides a framework of rules and regulations that all WTO member countries must adhere to when conducting trade in services. These rules aim to remove barriers to trade and prevent discrimination against foreign service providers.
GATS covers a broad range of services, including financial services, telecommunications, transportation, tourism, and professional services such as consultancy and engineering. It also covers the movement of natural persons, which allows professionals to work in other countries temporarily.
The agreement is based on three key principles: most-favored-nation (MFN) treatment, national treatment, and progressive liberalization. MFN treatment means that WTO member countries must treat all other member countries equally when it comes to trade in services. National treatment requires that foreign service providers receive the same treatment as domestic providers once they have entered a market. Progressive liberalization refers to the process of gradually reducing barriers to trade in services over time.
GATS has been successful in promoting free trade in services and increasing transparency in international trade. It has also helped to create a more predictable and stable environment for businesses operating in the service sector. However, some critics argue that GATS may lead to a loss of sovereignty for member countries, as the agreement requires them to adhere to certain rules and regulations.
In conclusion, GATS is an essential agreement for promoting free and fair trade in services across the globe. While it has its detractors, the benefits of the agreement are clear in terms of increasing transparency and predictability in international trade and creating a more level playing field for businesses. As global markets continue to evolve, GATS will play an important role in shaping the future of international trade in services.