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 5: Market access

Bregt Natens

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


The market access obligation of Article XVI GATS states, in paragraph 1, that each Member shall accord services and service suppliers of any other Member treatment no less favourable than that provided for under the terms, limitations and conditions contained in the market access column of the Member’s Schedule of specific commitments. Thus, the obligation is a conditional one: it applies only to committed sectors, and is subject to any scheduled limitations. The scope of Article XVI GATS is extended by footnote 8 to Article XVI:1 GATS, which explains that the movement of capital must be allowed for commitments in two situations. First, movement of capital must be allowed for Mode 1 commitments if the cross-border movement of capital is an essential part of the service itself. ‘Cross-border movement of capital’ covers both inward and outward movements of capital. The obligation only extends to situations in which the movement of capital is an essential part of the service, thereby excluding movements that are merely related to the service. Second, as concerns its Mode 3 commitments, a Member must allow the transfer of capital into its territory where such a transfer is related to the service. Thus, in such a situation, a Member must grant market access in the sense of Article XVI GATS. The scope of the obligation is dependent upon the meaning of ‘granting market access’, which is elaborated upon in paragraph 2 of the market access obligation and discussed in greater detail below.

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