The General Agreement on Trade in Services (GATS) was included in the WTO at the end of the Uruguay Round. It aims to open up the provision of all services to international ‘free trade’. It prohibits governments from discriminating against foreign multinational companies that want to buy government services or compete to supply them, in areas that governments agree to liberalize.
GATS includes a framework agreement outlining the rules under which trade in services should occur, annexes to that agreement, and schedules of commitments by individual countries as to which sectors they are opening to GATS rules. The idea is that subsequent negotiation rounds will involve nations committing to the opening of more and more of their service sectors to GATS. GATS is administered by a Council for Trade in Services, within the WTO.
GATS covers the following types of services:
Defenders argue that GATS does not apply to ‘government-provided’ public services. However the definition of government services is very narrow and is confined to services supplied by governmental authority ‘neither on a commercial basis, nor in competition with one or more service supplier’. The proportion of public services provided by government monopolies on a completely non-commercial basis in these days of widespread free-market ‘reforms’ are few and far between. Government services all over the world have been opened up to competition and corporatized to operate on a commercial basis. Similar wording in the EU Treaty has not protected government services and in eight challenges, the government services have been deemed not to be covered by the exemption for government services.