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 8: Exceptions

Bregt Natens

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


GATS contains several exception clauses which mitigate the reach of its obligations. Measures which violate GATS obligations may be justified using one of these provisions. Exceptions, by their very nature, create room for regulators. The carved-out regulatory autonomy was always part of the compromise: it is unlikely that a Member would have signed a GATS containing no exceptions. The most important issue for the present purposes is the interpretation of the exception clauses. In addition to some specific exceptions that have already been addressed, such as the exceptions to the MFN obligation, this chapter addresses the exceptions that are, for the most part, applicable to all obligations in GATS. Article III bis GATS states that the agreement shall not require any Member to provide confidential information if the disclosure of such information would: (i) impede law enforcement; (ii) otherwise be contrary to the public interest; or (iii) prejudice legitimate commercial interests of particular enterprises, public or private. The provision appears to have been inserted following Article III because it is most applicable to transparency obligations. However, it is applicable to all obligations arising from GATS, not only the unconditional general obligations related to transparency. Indeed, the provision contains a general exception for the protection of confidential information. In practice, this provision seems most relevant as a defence vis-à-vis a breach of GATS transparency obligations. Since the 1970s, the world economy has, primarily, been based on flexible exchange rates.

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