FOG in GATS commitments – why WTO Members should care

The entry into force of the General Agreement on Trade in Services in 1995 marked a new stage in the history of the multilateral system. Given the peculiarities of services trade, the Agreement contains a variety of conceptual innovations, including its extension to transactions (modes of supply), beyond conventional cross-border trade, and various types of non-tariff restrictions. In turn, the new concepts needed time to be absorbed by the ministries and agencies involved, many of which might have been surprised by ‘their’ sectors being covered by a trade agreement and the ensuing government-internal coordination needs. Thus, understandably, the schedules that emerged from the Uruguay Round, which still account for the majority of current commitments, contain a variety of ill-specified entries. Such entries undermine the transparency and predictability of market conditions, thereby affecting trade and investment decisions in services. Poorly specified commitments also give rise to trade disputes. While the scheduling conventions agreed for the Doha Round provided for technical refinements that would leave the substance of commitments unchanged, this possibility was used far more sparingly than could have been expected. Moreover, additional flaws would have been introduced if some of the (preliminary) offers had entered into effect. The following discussion tries to explain the scope for refinements and develop a clearer picture of the commitments warranting correction – whether in the form of a final Doha Round outcome or through negotiation-independent action by WTO Members.