Regulatory Autonomy and International Trade in Services

Regulatory Autonomy and International Trade in Services

The EU Under GATS and RTAs

Bregt Natens

This book considers how the interplay between multilateral and preferential liberalisation of trade in services increasingly raises concerns, both from the perspective of the beneficiaries of such liberalisation (whose rights are uncertain) and that of regulators (whose regulatory autonomy is constrained). The author shows how these concerns lead to vast underutilisation of, and strong prejudices against, the benefits of services liberalisation. The book meticulously analyses and compares the EU's obligations under the GATS and the services chapters of several RTAs to finally assess the merits of the raised concerns.

Chapter 2: Structure of GATS and the selected EU RTAs

Bregt Natens

Subjects: law - academic, european law, international economic law, trade law, regulation and governance


To understand GATS, and specifically its impact on regulatory autonomy, one must understand its flexible structure. The flexibility is likely due to the novelty of regulating trade in services at the time of GATS’ conclusion and to the difficulties with predicting its implications. The flexibility allowed the drafters to construct a potentially very powerful agreement, which also contained room for moulding obligations which were acceptable to all parties. In other words, GATS has the inherent potential to be encompassing and stringent, but it does not need to be so in practice. The structural flexibility of GATS is evident in two ways: first, in the structure of its obligations, and second, in the approach to scheduling specific commitments. This section further addresses how the EU made use of the flexibilities of GATS. GATS contains non-discrimination obligations, market access sensu lato obligations, obligations based on recognition-based regimes and transparency obligations. Concerning their applicability, the obligations can be divided into the following categories: a. Unconditional general obligations apply to any measure affecting trade in any service covered by GATS. The most important of these obligations is the Most-Favoured-Nation (MFN) obligation. In line with the flexible nature of GATS, the MFN obligation is limited by a list of individual exemptions, drawn up by each Member at the conclusion of GATS. b. Conditional obligations apply only to measures affecting trade in services in sectors for which specific commitments have been scheduled by the Member.

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