Which WTO agreement governs international trade in services such as banking, tourism and telecommunications?
Answer
General Agreement on Trade in Services
The General Agreement on Trade in Services governs international trade in services such as banking, tourism and telecommunications.
Known as GATS, the agreement was created during the Uruguay Round and entered into force with the WTO on 1 January 1995. It was the first multilateral agreement to establish general rules for international trade in services.
GATS covers four modes of supplying a service: cross-border supply, consumption abroad, commercial presence and the presence of natural persons. Examples include sending a service electronically, studying overseas, opening a foreign branch or temporarily providing services abroad.
GATS does not require every member to make identical market-opening commitments. Each member lists the sectors and conditions under which it grants access and national treatment. This schedule-based structure is why GATS is not simply a universal tariff-cutting agreement.