Gats: Promotion And Liberalization Of International Trade.

1975 words - 8 pages

IntroductionService trade is the largest and fastest-growing sector of the international trading activates now. According to WTO document, service trade provides more than 60% of the global output and employment. More and more WTO members realized the importance of the international service trade, and in 1995 the General Agreement on Trade in Services (GATS) was established by WTO members in the Uruguay Round negotiations.Overview of the GATS.The GATS is one of the most comprehensive agreements of the WTO (Richard Sanders, 2001). GATS contains several levels of obligations. First, the agreement contains successive future negotiations to increase coverage and expend the agreement. Second it includes general rules, such as most-favored nation treatment and transparency, which apply to all members. Third, it contains specific commitment, such as market access and national treatment. Specific commitments are an individual country's binding commitment or obligations undertaken by members to open markets in specific areas (V. Wijayaratnam 2002). Finally, the agreement also contains other rules for particular sectors. It is a general structure of the GATS.The purpose of the essay.With the development of the international service trade, more and more business sectors and countries realize the importance of GATS. This essay will analyze how GATS remove barriers to international trade in service. In another word how GATS liberalize the international service trade. And how liberalization of international service trade, which is guaranteed by GATS, promotes the whole international trade. In one word the aim of this essay is to analyze the effectiveness of GATS in the international trade.The Effectiveness Of The GATS.Improve the liberalization of international trade.In the Uruguay Round, many countries made commitments in services. And an analysis of the commitment schedules indicates that most countries undertook very limited liberalization. Hoekman (1995) estimated that high-income countries (HICs) scheduled 45% of their service sectors and low and middle-income countries (LMICs) scheduled only 12% of service sectors (Rupa Chanda 2003, p2000). However, GATS frameworks make WTO members make a step toward liberalization. Liberalization means among other things, eliminating government policies whereby national providers are favored over foreign ones (Richard Sanders 2001). Because most trade in services occurs within a country, their barriers are not tariffs but internal domestic law, regulations and policies that may possibly discriminate against foreign service providers or even limit their profitability (Ralph Nader 2002). GATS in some degree eliminate the regulations, which prohibit foreign investors providing services in some area. The aim of the GATS is to liberalize "trade in service" among WTO members. Generally speaking it is effective for the GATS to advance the liberalization in the international service trade. And liberalization of GATS embodies...

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