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General Agreement on Trade and Services
The General Agreement on Trade in Services (GATS), negotiated in the Uruguay Round, is the first multilateral trade agreement on services.
The GATS covers all services except services supplied in the exercise of governmental authority.
The sectoral classification generally used to schedule commitments under the GATS (document MTN.GNS/W/120) contains 11 main services sectors and one residual “other” category. These are business, communication, construction, distribution, educational, environmental, financial, health-related and social, tourism and travel-related, recreational cultural and sporting, and transport services.
Trade in services is defined in terms of four modes of supply:
1. Cross-border supply, whereby, for example, domestic consumers purchase telecommunications services from a supplier in another country;
2. Consumption abroad, whereby consumers consume services abroad, sometimes by physically moving to the location of the suppliers, as in the case of tourism services, or by sending their property abroad, as in the case of ship repair services;
3. Commercial presence, whereby, for example, a foreign bank or transport company establishes a branch or subsidiary in the territory of a country and supplies services; and
4. Movement of natural persons, whereby, for instance, natural persons supply consultancy or construction service in the territory of a foreign Member country.