Understanding GATS [3.2.1]

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How To Understand GATS and the Schedule of Commitments

The GATS basic structure:

  • The general obligations and disciplines contained in the main text ( e.g. , MFN);
  • The annexes dealing with rules for specific sectors ( e.g. , Annex on Telecommunications);
  • The specific commitments of individual member to provide market access, any applicable applications ( e.g. , market access, national treatment and adherence to the reference paper).

For illustration purposes, below is an excerpt from Armenia 's Schedule of Specific Commitments in Services[1] as it relates to certain telecommunication services:

Modes of supply: 1 ) Crossborder supply 2 ) Consumption abroad 3) Commercial presence 4) Presence of natural persons

Sector or Subsector

Limitations on Market Access

Limitations on National Treatment

Additional Comments

SECTOR SPECIFIC COMMITMENTS

COMMUNICATION SERVICES

Telecommunications services

(1)(2)(3) Armenia will provide unlimited market access for any and all basic and value added telecommunications services subsector initially covered by the monopoly immediately upon suspension or termination of monopoly rights in that subsector on or at anytime prior to the end of the monopoly.

(4) Unbound, except as indicated in the horizontal section.

( i.e., point “ii” and “iii” above).

Armenia undertakes the obligations contained in the attached Reference Paper on Regulatory Principles

(a) Voice telephone services
(CPC 7521)

(1) Unbound under monopoly rights until 2013, none as of 01.01.2014.

(2) None

(3) Unbound under monopoly rights until 2013, none as of 01.01.2014.

(4) Unbound, except as indicated in the horizontal section.

• None

• None

• None

(4) Unbound, except as indicated in the horizontal section.

All schedules have two sections: (i) the horizontal commitment section, which establishes the limitations that apply to all sectors listed in the schedule; and (ii) the particular trade in services commitments that apply to a particular sector or subsector. In determining a country's sector-specific commitment, consideration must also be given to the overall horizontal commitments.

A “specific commitment” in the service schedule refers to the country's commitment to provide market access and national treatment for the service listed pursuant to the terms and conditions set forth in the schedule. Commitments are legally binding and once a specific commitment has been made, a government is “bound” to the specific level of market access and national treatment and it cannot, at a later time, impose measures that would restrict entry into such markets. This serves as a guarantee to service providers in other countries that market entry conditions will not become less restrictive, as they can only be improved.

Commitments and limitations to market access and national treatment are entered in the service schedule with respect to each of the modes of supply (see top row in the above example). Therefore, a commitment on the subsector of voice telephone services (which is within the telecommunications services subsector, that in turn is within the broader sector classification of communication services) will have eight entries: 4 under the column of market access (one for each of the 4 different modes of supply) and 4 under the column of limitations on national treatment.

In the above example, the entries that read “none” mean that there are no limitations on national treatment of voice telephone services as it relates to crossborder supply (1), consumption abroad (2) and commercial presence (3). There are also no market access limitations on the “consumption abroad” mode of supply of voice telephone services.

However, wherever Armenia has specified “unbound” in the schedule means that it may it may impose limitations on market access or national treatment with respect to the mode of supply identified and subject to the condition specified therein ( e.g. , termination of monopoly or horizontal commitments). For example, since voice telephone services are provided under monopoly rights in Armenia , it has remained “unbound” with respect to market access in the provision of that service through crossborder supply and commercial presence, but is required to remove any limitations by 1 January 2014.

The “Additional Commitments” column shows that Armenia has agreed to adopt the Reference Paper on Regulatory Principles. In this portion of the schedules, member include additional positive commitments; it may not be used to introduce further restrictions or limitations on a commitment.

A country's telecommunications commitments may also be limited by its MFN exemptions ( i.e. , the maintenance of measures inconsistent with the MFN obligation). Since MFN is a general obligation that applies to all trade in services, exemptions are listed in a separate, less complex schedule indicating: (i) the sectors to which the exception applies; (ii) the measure and why it is inconsistent with the MFN obligation; (iii) the countries to which the measure apply; (iv) the duration of the exemption; and (v) the need for the exemption.

Armenia, for example has made MFN exemptions with respect to audiovisual services:

Subsector

Description of Measure Indicating its Inconsistency with Article II

Countries to which the Measure Applies

Intended Duration

Conditions Creating the Need for the Exemption

Audiovisual Services – Production and distribution of motion picture and television programmes

Measures based upon co-production agreement of audiovisual works, which confer National Treatment to audiovisual works covered by such agreement.

Countries with which such bilateral or multilateral agreements are in force, now or in the future.

Subject to the duration of the agreement concerned.

In order to promote cultural links between the countries concerned

Member may, in limited circumstances seek exemptions to the MFN principle:

  • At the time of accession for new members
  • By waiver under Article IX:3 of the WTO Agreement.
  • Exemptions, in principle may not last longer than 10 years.

ENDNOTES

1 Working Party on the Accession of Armenia, Reproduction of Armenia's Schedule of Specific Commitments as set forth in the Protocol to Armenia's accession; Part II - Schedule of Specific Commitments in Services, List of Article II MFN Exemptions; WT/ACC/ARM/23/Add.2, 6 December 2002.

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