Driving the GATS Forward : A Chinese Perspective

The General Agreement on Trade in Services (GATS) under the WTO is a newly-born and the first ever multilateral agreement on trade in services. Despite of potential development and welfare prospects abound in the services sector, only moderate liberalization has been achieved under the GATS and negotiations have been lagging behind. On the contrast, newly acceded members including China have made extensive and ambitious commitments under the GATS. With its eight years’ membership, China might be the only place where GATS rules have been extensively practiced and testified and thus provides valuable lessons for the GATS itself and other WTO members. The transitional review provided under China's Accession Protocol and conducted under the Council for Trade in Services and the Committee on Trade in Financial Services serves as an effective forum for members to discuss China’s implementation of its commitments under the GATS. With a survey of the comments and questions made at the latest transitional review, I highlight a few outstanding issues which I regard of systemic importance for the development of services disciplines, including: the relationship between obligations under market access (Article XVI), national treatment (Article XVII) and domestic regulation (Article VI); implications of cross-sector and cross-modes of supply (e.g. distribution of a service); regulation of investment vs. services liberalization; and liberalization against broader regulatory framework. The overall picture suggests that the supply of services can be affected by measures stemming from different regulatory domain (from macroeconomic policy to sector-specific regulation) at different levels of governance and in different forms. The GATS’s rules on market access, national treatment and domestic regulation could well serve as powerful tools to deal with this complicated regulatory network should they be further clarified with due consideration being given to the real world’s complexity and diversity. Luckily with China’s experience, we already felt the “stone in the river”. Presented at the SIEL 2010 Conference in Barcelona