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General Agreement on Goods in Services

4.5/5

Prelims: Indian Economy (Agreement of National Importance), General Agreement on Goods in Services

Mains: General Studies-III, Effects of Liberalization on the Economy, Changes in Industrial Policy and their Effects on Industrial Growth.

Why in the News ?

Around 72 nations have agreed to take on additional obligations in services under the General Agreement on Goods in Services (GATS) to ease non-goods trade among themselves and extended the similar concessions to all other members of the World Trade Organisation (WTO).

 Source: FE

Key Facts 🗝️


General Agreement on Goods in Services

  • It was signed at the Uruguay Round of Multilateral Trade Negotiations’s conclusion and entered into force on January 1, 1995. 

About:

  • General Agreement on Goods in Services

    • It is a treaty of the World Trade Organization (WTO).
    • It was created to extend the multilateral trading system to the service sector, in the same way, the General Agreement on Tariffs and Trade (GATT) provides such a system for merchandise trade.
    • It was signed at the Uruguay Round of Multilateral Trade Negotiations’s conclusion and entered into force on January 1, 1995. 
    • Members: All WTO members are at the same time members of the GATS including India.
    • Basic obligations under the GATS may be categorized into two broad groups:
      • General obligations that apply to all members and services sector.
      • Specific commitments: These are obligations that apply only to the sectors inscribed in a member’s schedule of commitments. Such commitments are laid down in individual schedules whose scope may vary widely between members.
  • The GATS applies in principle to all service sectors, with two exceptions.

    • Services supplied in the exercise of governmental authority: These are services that are supplied neither on a commercial basis nor in competition with other suppliers.
    • These include social security schemes and any other public service, such as health or education that is provided at non-market conditions.
    • The Annex on Air Transport Services exempts from coverage measures affecting air traffic rights and services directly related to the exercise of such rights.
  • New obligations

    • The new obligations under their schedules in GATS seek to mitigate the unintended trade-restrictive effects of measures related to licensing requirements and procedures, qualification requirements and procedures and technical standards among themselves.
    • The disciplines will be applied on a “most-favoured nation” principle, meaning that they will benefit all WTO members. 
    • These disciplines have been named Services Domestic Regulation (DSR) and came into force in the 13th Ministerial Conference of the WTO.

UPSC CSE EXAMS Corner


Mains: PYQ/FAQ

Q. World trade organisation (WTO) as a multilateral body is facing challenges on various counts. In this light discuss the relevance of WTO and also suggest suitable reform in its functioning. 

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