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 6: Domestic regulation

Bregt Natens

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


Article VI GATS on domestic regulation addresses the relationship between national regulators and individual service suppliers in six paragraphs. Paragraphs 1, 2, 3 and 6 contain transparency obligations. Paragraphs 4 and 5, however, encompass substantive obligations that are very much linked. Paragraph 4 contains the obligation to develop disciplines for measures relating to qualification requirements and procedures, technical standards and licensing requirements, while paragraph 5 contains disciplines which apply pending the entry into force of these new disciplines under Paragraph 4. Article VI:5 GATS clarifies that its obligations only apply to sectors in which specific commitments have been scheduled.It must be stressed that the term ‘domestic regulation’ in the context of Article VI:5 GATS refers solely to measures relating to licensing and qualification requirements and technical standards. It may be noted that, in US – Gambling, the Panel stated that Article VI:5 GATS covers measures that impose qualification requirements and procedures, technical standards and licensing requirements. The Panel thus extended the scope of Article VI:5 GATS to cover qualification procedures. However, there does not appear to be any textual basis for this. Therefore, in my view, these measures are covered by Article VI:4 GATS only. In any case, the covered types of regulatory measures are commonly used to attain a wide variety of policy goals in many services sectors. This is particularly true for professional and financial services, as domestic regulation combats information asymmetries.

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