Backgrounder on the GATS

During the Uruguay Round of trade negotiations which resulted in the establishment of the World Trade Organization (WTO), Canada and other negotiating partners recognized the need for a comprehensive set of rules governing trade in services. The set of rules for trade in services that resulted from these negotiations is embodied in the General Agreement on Trade in Services (GATS).

Similar in principle to the General Agreement on Tariffs and Trade (GATT), which deals with trade in goods, the GATS has two primary objectives: first, to ensure that all signatories are treated equitably when accessing foreign markets; and second, to promote progressive liberalization of trade in services (over time, eliminating trade barriers to enable further participation in one another's markets).


WTO Members agreed at the end of the Uruguay Round to subsequent rounds of negotiations aimed at progressive liberalization of trade in services. Accordingly, the current GATS negotiations began in January 2000.

The November 2001 Ministerial Conference in Doha set in motion the market access phase of the GATS negotiations and mandated that “participants shall submit initial requests for specific commitments by June 30, 2002 and initial offers by March 31, 2003.” In view of these deadlines, Canada and other WTO Members have submitted initial requests in 2002 and submitted initial offers at the end of March 2003.

Subsequent to the exchange of initial requests and initial offers, WTO Members agreed to submit revised market access offers by May 31, 2005. In accordance with this declaration, Canada submitted its revised offer on May 18, 2005.

Each country's offer takes into account the basic negotiating parameters that the country has set for itself, as well as the various bilateral requests it has received from other members. For example, in Canada, these basic parameters make clear that health, public education, social services and culture are not negotiable. These offers and all subsequent offers are conditional on the overall level of liberalization produced at the end of the negotiations.

At the end of the negotiation process, the results of the bilateral request-offer negotiations will be made available on a "most favoured nation" basis (i.e. made available to all WTO countries). In this way, all member countries benefit from the bilateral negotiations, regardless of whether they negotiated market access commitments bilaterally or not.

Ministers from WTO Member countries met in Hong Kong, China, December 13 - 18, 2005 for the Sixth WTO Ministerial Conference. One of the key outcomes of the Hong Kong Ministerial meeting was an agreement among Ministers to embark upon a plurilateral request-offer negotiating process as a means of advancing the services negotiations. The purpose of this plurilateral process is to complement, not replace, the bilateral request and offer process that has been employed since the launch of the market access phase of negotiations on services in 2002. ARCHIVED - Canada is an active participant in plurilateral requests in a number of sectors.

As part of these negotiations, WTO Members are also negotiating possible rules for issues such as emergency safeguard measures, subsidies, government procurement, and "domestic regulation" (i.e. the development of disciplines relating to qualification requirements and procedures, licensing requirements and qualifications, and technical standards).

The GATS Framework


The GATS applies to all measures affecting trade in services, including measures taken by regional or local governments (such as provinces and municipalities) and non-governmental bodies that exercise delegated authority (such as self-regulatory professional bodies). The GATS does not apply to "services supplied in the exercise of governmental authority" (i.e. services that are supplied neither on a commercial basis nor in competition with one or more service suppliers, including those in the fields of health and public education).

The GATS allows each member to choose - through its specific commitments - to what extent it wishes to open its markets to foreign service providers. The GATS recognizes the right of governments to regulate services in order to meet national policy objectives. The GATS further states that liberalization shall take place with due respect for the level of development of individual members and that special consideration shall be given to the least-developed countries.

General Rules

The GATS requires all members to be transparent about the conditions for doing business in their countries. It also requires that members not discriminate among foreign service providers seeking access to their markets. This is known as most-favoured nation (MFN) treatment.

Specific Commitments

The two key obligations of the GATS are national treatment (i.e. foreign service suppliers must be treated the same way as domestic suppliers) and market access (i.e. certain quantitative restrictions to market access are prohibited). They apply only in sectors where countries undertake specific commitments. These commitments are listed in country-specific schedules that list the conditions, for each sector, under which market access and national treatment are guaranteed.

The GATS provides for successive rounds of negotiations to take place in order to progressively increase the level of commitments. Currently, individual country commitments with respect to market access and national treatment are most common in the areas of distribution, tourism, banking, insurance, telecommunications and professional services. The schedules of commitments of Canada and all other members can be found on the WTO Web site.