The General Agreement on Trade in Services (GATS) was created in 1995 as part of the World Trade Organization (WTO) with the goal of liberalizing global trade in services. The agreement is designed to promote international cooperation and open up markets for service providers around the world.
The GATS agreement is built on several key principles. First, it recognizes the importance of maintaining diversity in service industries and the need for countries to have the flexibility to regulate those services as they see fit. Second, it encourages transparency and communication between member countries to promote the flow of information and prevent trade barriers. Finally, the agreement establishes a framework for resolving disputes between member countries.
The GATS agreement covers a wide range of service sectors, including finance, telecommunications, transportation, tourism, and professional services, among others. Each member country is required to submit a list of its service sectors that it is willing to open to foreign providers, along with any limitations or conditions on access.
One of the key benefits of the GATS agreement is that it promotes competition in service markets, which can lead to better quality services and lower costs for consumers. Additionally, by opening up markets to foreign providers, the agreement can help to spur innovation and increase productivity within service industries.
However, the GATS agreement also has its critics. Some argue that it can lead to a loss of domestic control over service sectors, as foreign providers may not be subject to the same regulations or standards as domestic providers. Others argue that the agreement can exacerbate inequalities between developed and developing countries, as developed countries may have a competitive advantage in service industries.
Despite these criticisms, the GATS agreement has been influential in promoting liberalization of trade in services around the world. As more countries have joined the WTO and implemented the agreement, there has been a significant increase in global trade in services. With ongoing negotiations to expand and update the agreement, the GATS remains an important framework for international cooperation and trade in services.