GATS-what is it?

Summary

The script discusses the General Agreement on Trade in Services (GATS), a WTO trade agreement aimed at limiting government authority, particularly in regulating services. It emphasizes how GATS covers a broad range of services, from alcohol permits to zoning laws, and its impact on state and local regulations. The agreement mandates non-discrimination against foreign service providers and restricts quantitative limits on service suppliers. The discussion also highlights concerns over domestic regulations being influenced by international trade rules, potentially pressuring states to align their policies with GATS commitments.

Takeaways

• 📜 The General Agreement on Trade in Services (GATS) is a World Trade Organization (WTO) agreement designed to limit government authority in trade-related areas.
• 🌐 GATS has far-reaching implications for local governments because it affects services, which constitute a large part of the U.S. economy and are traditionally regulated by local authorities.
• 🔄 GATS includes a built-in agenda for continuous negotiations, meaning future discussions and rules are ongoing without needing new legislative action from Congress.
• 🏛️ The GATS Council for Trade in Services is a major part of the WTO, with the power to influence global trade rules and local regulations.
• 📦 GATS applies to a wide range of services from alcoholic beverages to financial services, impacting state laws that affect trade, even indirectly.
• 📊 Specific commitments under GATS focus on certain economic sectors like financial services, and these commitments include rules against discriminating against foreign service suppliers (National Treatment) and limiting the number of service suppliers (Market Access).
• 🎲 The Antigua case is an example where GATS rules were used to challenge U.S. laws on internet gambling, illustrating how GATS can be leveraged to challenge domestic regulations.
• 🧾 General obligations in GATS apply to all services and include rules like ensuring regulations are objective, transparent, and not overly burdensome.
• 💡 Public services provided for free, such as libraries or public parks, are generally exempt from GATS rules, but services with user fees are often considered commercial and covered by the agreement.
• 📢 There has been little public discussion or transparency in the U.S. regarding GATS negotiations, raising concerns about the potential impact on state and local government regulations, particularly in sectors like higher education and energy.

Q & A

What is GATS and its purpose within the WTO?

GATS stands for General Agreement on Trade in Services. It is one of the 18 WTO agreements that includes trade rules designed to limit government authority, especially in the area of services which are traditionally regulated and provided by local governments.

How does GATS affect government authority?

GATS constrains government authority by setting rules that limit the ability of governments to regulate services, which can impact local laws and regulations.

What is the role of the WTO's dispute settlement process in relation to GATS?

The WTO's dispute settlement process, as illustrated by the Antiga case, can be used to resolve conflicts arising from GATS rules and can influence future negotiations.

How are GATS negotiations structured within the WTO?

GATS negotiations are structured within the WTO through the Council for Trade in Services, which reports to a committee on trade negotiations, ultimately leading to decisions made by the Ministerial Council.

What is the scope of services covered by GATS?

The scope of services covered by GATS is extensive, ranging from A to Z, including everything from alcoholic beverages to zoning, as long as they affect trade and service.

How do local laws relate to GATS trade commitments?

Local laws are covered by GATS trade commitments, and the legal nature of conflicts that arise can lead to international pressure or internal lobbying to change state laws.

What are the two types of trade rules in GATS?

The two types of trade rules in GATS are Specific Commitments, which apply to individual economic sectors, and General Obligations, which apply more broadly to all services.

What does the term 'National Treatment' mean in the context of GATS?

In GATS, 'National Treatment' means that foreign service suppliers should not be discriminated against, essentially requiring equal treatment as domestic suppliers.

What is 'Market Access' in the context of GATS?

Market Access in GATS refers to the rule that governments should not set quantitative limits on service suppliers, such as quotas or monopolies.

How do General Obligations under GATS affect domestic regulation?

General Obligations require that domestic measures be objective, transparent, and not more burdensome than necessary to ensure service quality, potentially limiting the legislative compromises made in a democratic process.

What are some specific sectors that the United States has committed to under GATS?

The United States has committed to sectors such as Financial Services, including sub-sectors like banking, insurance, and credit cards, as well as Library Services and higher education.

What is the potential impact of GATS on state and local governments in the United States?

GATS has the potential to significantly impact state and local governments by constraining their ability to regulate services and potentially leading to pressure to change laws to comply with GATS rules.