Services / GATS

The General Agreement on Trade in Services (GATS) is the agreement within the WTO that sets forth rules for how countries can regulate services, and gives transnational services suppliers rights not only to operate, but also rights in the way that they operate, in foreign countries. Countries have agreed to “bind” their services sectors to WTO rules in their Schedules in the GATS. This agreement was part of the founding of the WTO due to the lobbying of Big Finance and other transnational corporations (TNCs) in the services sector. The majority of developing countries have long opposed the expansion of the GATS, and talks faltered as the Doha round stalled.

Proponents then launched talks towards a services-only pact, the Trade in Services Agreement (TiSA). OWINFS members, together with Public Services International, conducted a grassroots and advocacy campaign for four years against the TiSA. We were successful in December 2016 when the talks collapsed.

Now, a dangerous corporate agenda is behind a new effort to have new rules limiting domestic regulation of services, within the General Agreement on Trade in Services (GATS) of the WTO. “Domestic Regulation” (DR) rules would restrict the types of rules that governments can make even if the rules are applied the same to foreign and domestic companies. They would even apply to domestic (non-traded) services (like construction) as well as services that are traded (like air travel). The proposed rules would apply to private companies as well as to public services not covered by the narrow public services exception.

While proponents argue that the “right to regulate” would still be safeguarded, the WTO has ruled in the past that “Members’ regulatory sovereignty is an essential pillar of the progressive liberalization of trade in services, but this sovereignty ends whenever rights of other Members under the GATS are impaired.” Thus the “right to regulate” ends where the WTO rules begin. Using the undemocratic WTO as the platform, some governments completed negotiations on a new deal in late 2021. The new “Reference Paper on Services Domestic Regulation” is a corporate lobbyists’ charter and more. Those governments want to bring the text into effect by early 2023 through the backdoor after developing countries have blocked consensus support for it in the WTO. So, we have a short window to stop our countries from adhering to the text.

In addition, some countries are seeking to restart the negotiations to expand the scope and coverage of the GATS in the WTO. This would involve countries agreeing to subject even more services sectors to the disciplines of the WTO, which would further privilege foreign transnational services providers at the expense of domestic services. Services sectors currently targeted include environmental (engineering, architecture, construction (water related), distribution, data processing, consulting); tourism and related; agriculture related (services incidental to agriculture such as wholesale trade in live animals, sale on contract of food products, wholesale trade in food and beverage, food retailing); and logistics. This agenda also overlaps with the digital trade negotiations, as many services sectors targeted relate to the information and communications sector, and rules on cross-border data transfer are also included in the GATS.

One of the primary concerns of civil society with regards to the proposed DR rules, like those of Investment Facilitation, is the “Transparency” provisions which would give foreign TNCs greater input and oversight over domestic policymaking processes at the expense of public interest concerns of citizens.

OWINFS members have long maintained core demands with regards to services in the WTO:

  • Countries should not take additional commitments to “discipline” their services sectors, through expanded GATS negotiations, Domestic Regulation rules, or through digital trade talks.
  • Current and future public services in particular must be excluded from any existing or future agreements that include services with a broad and authentic carve-out. This must include services that may need to be re-municipalized in future.
  • In addition, a fundamental assessment of the implications of the GATS on ensuring proper regulatory oversight of services and ensuring access to quality public services should be undertaken by member states and the WTO. Any constraints on achieving the Sustainable Development Goals (SDGs) with regards to good health and well-being, inclusive and equitable quality education, clean water and sanitation, affordable and clean energy, and other services should be removed without challenge from the WTO rulebook.

Current Civil Society Statements and Analysis

The illegitimacy of Joint Statement Initiatives and their systemic implications for the WTO, by Jane Kelsey. Journal of International Economic Law, Volume 25, Issue 1. (March 2022)

“Domestic Regulation” Rules in the World Trade Organization (WTO) (2-page Briefing, 10 June 2022)

Webinar on The Corporate Threat to Democratic Regulation of Our Services: the WTO’s “Domestic Regulation” Agreement (1 June 2022)

Services: English, Spanish. (Kinda Mohamadieh, TWN, 10 November 2021)

Reference paper on services domestic regulations: Overview of main content and regulatory implications. (Kinda Mohamadieh, TWN, November 2021)

Certification of GATS schedules and the plurilateral reference paper on services domestic regulation. (Jane Kelsey, November 2021)

Briefing note on Services Domestic Regulation JSI text of 27 September 2021 (INF/SDR/1) (Jane Kelsey, October 2021)

Why the Joint Statement Initiatives Lack Legal Legitimacy in the WTO, by Law Professor Jane Kelsey, a rebuttal to a previous document by Hamid Mamdouh, “Plurilateral Negotiations and Outcomes in the WTO.” Resumen en español. (22 June 2021)

Plurilateral Initiatives and their Interaction with WTO Rules. (Kinda Mohamadieh, TWN, 2020)

Understanding the European Union’s understanding on computer and related services. (Jane Kelsey, September 2020)

Briefing paper: Disciplining non-discriminatory domestic regulations in the services sectors – Another plurilateral track at the WTO. (Kinda Mohamadieh, TWN, October 2019)

Session at the 2019 WTO Public Forum: #111. What would services as the next trade frontier look like? (11 October 2019)

Session at the 2019 WTO Public Forum: #119. Why are computer and related services important? (11 October 2019)

Comprehensive analysis: Analyses of Domestic Regulation Disciplines. (Sanya Reid Smith, TWN, December 2017)

Two-page summary: “Domestic regulation” rules in the WTO: English: pdf, docx. Spanish: pdf, doc. (November 2017)

Book: Serving Whose Interests? The political economy of trade in services agreements. (Jane Kelsey, Routledge Cavendish, 2008)

FINAL TEXT

WTO Members negotiating a non-mandated plurilateral agreement for new disciplines on Domestic Regulation finalized their text, called a Reference Paper. In contravention to WTO rules, this Reference Paper was first published AFTER the text was finalized: JOINT INITIATIVE ON SERVICES DOMESTIC REGULATION REFERENCE PAPER ON SERVICES DOMESTIC REGULATION. (27 September 2021)

Leaked Texts

WTO plurilateral services domestic regulation disciplines draft schedules. These are the services sectors they are proposing the new rules would apply to. (10 February 2021)

WTO plurilateral services domestic regulation disciplines - Chair’s summary of meeting held on 10 December 2020. (9 February 2021)

WTO plurilateral services domestic regulation disciplines draft text as of 18 December 2020.

Some Articles & Updates on the Negotiations

Trade: WTO-WB report on services-led export diversification harmful to South?, by D. Ravi Kanth. (6 July 2023)

WTO: JSI members on services DR “frustrate” India & South Africa, by D. Ravi Kanth. (29 March 2023)

Trade: South Africa elicits responses from 35 JSI members on services DR, by D. Ravi Kanth. (15 March 2023)

WTO: India, South Africa sharply object to JSI on services domestic regulation, by D. Ravi Kanth. (8 February 2023)

WTO Services Division propagates "dangerous" narrative on JSIs. (D. Ravi Kanth, 11 April 2022)

Participants make headway in finalizing negotiations on services domestic regulation at MC12, WTO News. (4 November 2021)

Participants on track to conclude negotiations on services domestic regulation at MC12, WTO News. (25 October 2021)

Developing countries to lose from digital services tax of OECD, by D. Ravi Kanth. (26 October 2021)

JSI on services domestic regulation leads to plurilateralization at WTO, by D. Ravi Kanth. (22 July 2021)

Growing "lawlessness" at WTO ahead of MC12, by D. Ravi Kanth. (12 July 2021)

JSIs lack legal status, fragments WTO, by D. Ravi Kanth. (10 May 2021)

WTO DG acknowledges her "mistake" on JSIs, by D. Ravi Kanth. (5 May 2021)

Proponents fail to respond to challenge over legal status of JSIs, by D. Ravi Kanth. (4 March 2021)

Members sharply divided on WTO reform, fisheries subsidies & JSIs, by D. Ravi Kanth. (1 March 2021)

JSIs will erode WTO's multilateral rules-based architecture, by D. Ravi Kanth. (24 February 2021)

Renewed JSI efforts to extend e-com duties moratorium to services, by D. Ravi Kanth. (6 August 2020)

US to target countries that impose digital services taxes, by D. Ravi Kanth. (4 June 2020)

WTO "Friends of Services" for permanent moratorium on E-transmissions, by D. Ravi Kanth. (28 March 2020)

US launches probe into France's proposed digital services tax, by D. Ravi Kanth. (15 July 2019)

EU, Australia table draft MC12 statement on domestic regulation, by D. Ravi Kanth. (25 April 2019)

Understanding the European Union’s Understanding on Computer and Related Services, by Professor Jane Kelsey

No outcome likely at MC11 on domestic regulation in services, by D. Ravi Kanth. (10 November 2017)

Outcome unlikely on domestic regulation in services at MC11, by D. Ravi Kanth. (26 October 2017)

India, Africa resist IC moves to finalize outcomes in GATS DR at MC11, by D. Ravi Kanth. (9 October 2017)

Efforts to import parts of failed TiSA into services DR thwarted, by D. Ravi Kanth. (12 May 2017)

Green room process on services domestic regulation, by D. Ravi Kanth. (6 February 2017)

For more articles and updates on the negotiations see here.

Previous work

OWINFS members, together with Public Services International, conducted a grassroots and advocacy campaign for four years against the TiSA, which was successful in December 2016 when the talks collapsed. OWINFS has also conducted many years of campaigning against the expansion of the GATS. This work can be seen here.