“Mode Switching” as an Interpretational Problem under Articles XVI and XVII of the GATS

Economic studies provide evidence of inter-modal linkages across the different modes in the World Trade Organization (WTO) General Agreement on Trade in Services (GATS) mode of supply framework. Despite the scheduling of specific commitments under each mode, substitutability and complementarity across the modes exist in commercial practices. These cross-modal interdependencies are sometimes referred to as “mode switching”. Article I:2 of the GATS defines the four modes as delivery channels without indicating to any interdependence they may have. The 2001 Scheduling Guidelines of the WTO’s Council of Trade in Services provide modal separability in the scheduling of commitments even when the delivery of a service requires the necessary utilization of two or more modes. Nevertheless, the interpretational implications of such scheduling practices have not been addressed in the literature or the GATS jurisprudence. This article, thus, identifies and examines the interpretational lacunae associated with complementary inter-modal linkages. In order to do so, it utilized GATS jurisprudence to identify whether inter-modal linkages are considered in adjudicating disputed measures. It also used “mode switching” as an analytical lens to evaluate the interpretational challenges posed by cross-modal interdependencies. Accordingly, it argues that complementary inter-modal linkages unfold interpretational issues related to the legal characterization of modes, the internal consistency of commitments, and the interpretation of cumulative obligations. It suggests interpreting Article I:2 and specific schedules of commitments undertaken as per Articles XVI and XVII of the Agreement in accordance with its purpose and objective to maintain the economic function of cross-modal linkages.