Gats Free Trade Agreement

The General Agreement on Trade in Services (GATS) is a treaty created by the World Trade Organization (WTO) that aims to liberalize trade in services between member countries. It came into effect in 1995, and as of 2021, 164 countries are members of the WTO.

Under the GATS, member countries agree to treat foreign service providers no less favorably than domestic service providers. This means that foreign service providers should have the same access to a country`s market as domestic providers. The GATS covers a wide range of services, including business, communication, construction, education, health, tourism, and transportation.

In addition to the most-favored-nation (MFN) principle, which prohibits discrimination between member countries, the GATS also includes the national treatment principle. This principle requires member countries to treat foreign service providers the same as domestic providers in terms of laws and regulations. However, countries can still regulate their service sectors for various reasons, such as public health, safety, or morals.

The GATS also includes specific commitments by member countries to liberalize trade in particular service sectors. These commitments are listed in each country`s schedule of commitments, which is an annex to the treaty. The commitments can be either unilateral or negotiated with other member countries.

The GATS has been a controversial treaty since its creation. Critics argue that it prioritizes the interests of multinational corporations over the needs of developing countries. They also claim that it undermines the ability of governments to regulate their service sectors to protect public interest. Supporters of the GATS argue that it promotes economic growth, increases competition, and creates new business opportunities.

Overall, the GATS is an important treaty that facilitates trade in services between member countries. While it is not perfect, it has contributed to the liberalization of service sectors worldwide. As the global economy evolves, the GATS will continue to play an important role in shaping the future of services trade.

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