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 4: Non-discrimination

Bregt Natens

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


GATS contains two main non-discrimination obligations. The MFN obligation in Article II GATS, which applies to all measures covered by the agreement, is probably GATS’ most important unconditional obligation. Article XVII GATS contains a national treatment obligation, which applies solely to sectors for which specific commitments have been scheduled. The case law addressing these obligations under GATS has focused on the national treatment obligation. Many of the interpretations of Article XVII GATS are directly relevant to Article II GATS. Therefore, national treatment is addressed first. Article XVII:1 GATS requires Members to accord treatment no less favourable to services or service suppliers of any other Member than that treatment which it accords to its own similar services or service suppliers. The obligation applies to all measures affecting trade in services in sectors for which specific commitments have been scheduled, in so far as these commitments are not subject to scheduled limitations. The scope of the national treatment obligation is not limited to actual service suppliers. The Panel in EC – Bananas III considered some potential service suppliers relevant to the assessment of the national treatment obligation: vertically integrated companies, which on the facts of EC – Bananas III are existing incumbents in the relevant market, are relevant potential service suppliers. The AB did not address the issue of potential service suppliers explicitly, but narrowed the Panel’s finding by referring only to existing banana companies.

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