GATS

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Context: The WTO has initiated the Services Domestic Regulation (DSR) agreement, with 72 member nations voluntarily assuming extra obligations to streamline service trade, addressing issues like licensing, technical standards, and qualification procedures.

Details

• The World Trade Organization (WTO) has implemented the Services Domestic Regulation (DSR) agreement, with 72 member nations voluntarily committing to additional obligations aimed at facilitating service trade among themselves.
• This initiative is centred on alleviating challenges associated with licensing requirements, technical standards, and qualification procedures, thus aiming to streamline and simplify the process of trading services among the participating nations.

Services Domestic Regulation (DSR)

• DSR is a set of disciplines aimed at addressing unintended trade-restrictive effects related to licensing requirements, procedures, qualification requirements and procedures, and technical standards in the services sector.
• These disciplines are designed to ease non-good trade among the participating nations.

Implementation and Participating Nations

• The DSR pact, with voluntary obligations, came into force on the second day of the 13th Ministerial Conference of the WTO.
• 72 nations have agreed to take on additional obligations under GATS, extending similar concessions to all WTO members.
• The obligations are outlined in the schedules in GATS, and they aim to create a more favourable environment for services trade.

Most-Favored-Nation (MFN) Principle

• The disciplines will be applied on a "most-favoured-nation" principle, meaning that the benefits will extend to all WTO members.
• Indian professional companies are expected to have equal opportunities to access markets in the 70 participating countries if they meet the specified standards.

Economic Projections

• A new research study by the WTO suggests that the implementation of these new obligations will reduce services trade costs, with estimated savings of $127 billion.
• By 2032, it is projected that global real income will increase by at least 0.3% (representing $301 billion), and global service exports are expected to rise by 0.8% (amounting to $206 billion).

Participating Countries

• The initiative includes 72 nations, such as Albania, Argentina, Australia, Bahrain, Brazil, Canada, China, Colombia, Costa Rica, Japan, Korea, New Zealand, Norway, Saudi Arabia, Singapore, Switzerland, the United Arab Emirates, the UK, and the US.

About General Agreement on Trade in Services (GATS)
Key Points	Description	Importance
Scope	A WTO agreement created in 1995 to establish rules for international trade in services.	Provides a legal basis for the growth of services trade.
Key Principles	Most Favored Nation (MFN): Prohibits discrimination among WTO members regarding services trade. National Treatment: Requires equal treatment for foreign and domestic service providers in a member's market. Market Access: Members must outline open service sectors and any limitations. Transparency: Members must publish relevant laws and regulations.	Ensures fair competition and predictability for businesses operating internationally.
Structure	Framework Agreement: Establishes overarching principles and rules. National Schedules of Commitments: Each country lists specific market access & national treatment commitments in different service sectors. Annexes: Address special rules or exemptions for certain sectors.	Provides a flexible framework for tailoring liberalization across sectors and countries.
Benefits	Promotes Trade: Reduces barriers and increases investment in services. Economic Growth: Spurs innovation, efficiency, and development across sectors. Developing Countries: Includes provisions to support the participation of developing nations.	Has major potential to boost economies globally.

Conclusion

• The DSR pact aims to enhance the trade environment for services among participating nations and is expected to have positive economic impacts, including increased global real income and service exports. The principles of most-favoured-nation treatment and the involvement of a diverse group of nations underline the collaborative and multilateral nature of this initiative within the WTO framework.

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WTO: https://www.iasgyan.in/daily-current-affairs/wto#:~:text=About%20World%20Trade%20Organization,introduced%20procedures%20for%20dispute%20settlement.

PRACTICE QUESTION Q. The General Agreement on Trade in Services (GATS) was established in an era before the rise of e-commerce and other technology-driven services. How do new technologies challenge the existing framework of GATS, and how can the WTO adapt to effectively address these challenges?