Explain GATS – General Agreement on Trade in Services.

The General Agreement on Trade in Services (GATS) is a multilateral treaty established by the World Trade Organization (WTO) to regulate international trade in services. GATS entered into force in 1995 as part of the Uruguay Round negotiations and represents a comprehensive framework for the liberalization of services trade among WTO member countries.

Key Features of GATS:

1. Scope and Definition of Services:

   • GATS covers a broad range of services, including business, communication, construction, education, environmental, financial, health, tourism, and more. Services are defined as anything other than a tangible product.

2. Most-Favored-Nation (MFN) Treatment:

   • GATS principles include the MFN treatment, requiring that any advantage, favor, privilege, or immunity granted by one member to a service provider of another member must be extended to all members. This ensures equal and non-discriminatory treatment.

3. Market Access and National Treatment:

   • GATS establishes commitments related to market access and national treatment. Market access deals with limitations on the number of service providers, transactions, or the value of service output. National treatment requires that foreign service providers receive treatment no less favorable than domestic providers.

4. Progressive Liberalization:

   • GATS allows member countries to make commitments to liberalize specific sectors over time. Members submit schedules outlining their commitments, including limitations and conditions. The idea is to progressively liberalize trade in services based on negotiations and member consensus.

5. Recognition of Domestic Regulations:

   • GATS acknowledges the right of member countries to regulate services to meet public policy objectives, such as social welfare, environmental protection, and public health. However, such regulations should not be used as a means of arbitrary or unjustifiable discrimination.

6. Flexibility for Developing Countries:

   • GATS recognizes the special needs and circumstances of developing countries, allowing them to undertake commitments commensurate with their development, financial, and trade needs.

7. Dispute Settlement Mechanism:

   • GATS includes provisions for dispute resolution, allowing members to seek redress for violations of GATS commitments through the WTO's dispute settlement mechanism.

GATS facilitates negotiations and agreements on liberalizing trade in services by providing a structured framework for member countries. The agreement reflects the growing importance of services in the global economy and aims to create a more open and predictable environment for cross-border trade in services while allowing members to pursue their domestic policy objectives.