GATS Annexes FactSheet

FACTSHEET
GATS Annexes form an integral part of the MFN (Art II) Exemptions
Agreement (Art XXIX). They address particular
policy concerns or the special situation of individual Art II.2 gave a one-off opportunity to Members, at
service sectors and modes to further refine certain the entry into force of the GATS, to maintain
provisions of the GATS. Some are complemented measures inconsistent with their MFN obligation,
by related instruments like Ministerial Decisions according to the conditions defined in this Annex.
and organised some further negotiations beyond In principle, these exemptions should not have
the end of the Uruguay Round ("built-in agenda"). exceeded 10 years in duration, but in fact most of
them have been taken for an indefinite period. The
exemptions are subject to review every 5 years.
Financial Services The MFN-inconsistent measures had to be
presented in a separate list identifying also the
The first Annex includes a set of definitions on sector and countries concerned, their intended
financial services, service suppliers and services duration and the conditions creating the need for
supplied in the exercise of governmental authority the exemption.
(i.e. outside the scope of the GATS). It creates the
"prudential carve-out" whereby Members shall not
be prevented from taking any measure for
prudential reasons (e.g. protection of investors, Air Transport Services
integrity and stability of the financial system). Such
prudential measures may be recognised by other This Annex excludes from the coverage of the
Members according to conditions very similar to GATS measures affecting traffic rights and
those in Art VII. services directly related to the exercise of traffic
The Understanding on Commitments in rights (i.e. the vast majority of the trade in the
Financial Services organises a different way of sector). In this sector the GATS only applies to
scheduling specific commitments in the sector, that aircraft repair and maintenance, the selling and
Members were free to adopt. Instead of the marketing of air transport services and computer
bottom-up approach in part IV of the GATS (no reservation systems. The Annex provides a
commitment unless it is scheduled), the definitions of these sub-sectors and for periodic
Understanding provides for a top-down approach reviews (every 5 years) of the application of these
whereby a Member undertakes full commitments in provisions.
the sector unless it schedules an exception. A
limited number of Members based their
commitments in the sector on this Understanding. Telecommunication Services
The first Annex recognises the dual role of the
Mode 4 – Movement of Natural sector: it is a distinct sector of economic activity
and an underlying means of performing other
Persons economic activities (e.g. mode 1). Governments
must ensure that foreign service suppliers are
The Annex specifies that the GATS shall not
given access to the public telecommunication
apply to natural persons trying to migrate to
networks without discrimination. The Annex also
another Member (e.g. persons seeking access to
contains a set of definitions, provisions on
the employment market of another Member, or
technical co-operation in favour of developing
seeking citizenship, residence or employment on a
countries, and on the co-operation with
permanent basis in that Member).
international organisations relevant to the sector.
Annexes to the General Agreement on Trade in Services
Professional Services
Annex on Article II Exemptions The Ministerial Decision mandated further work
Annex on Movement of Natural Persons Supplying in this sector, within the framework of Art VI and
Services under the Agreement VII. More specifically, Members had to give
Annex on Air Transport Services priority to the accountancy sector for which they
Annex on Financial Services were supposed to develop disciplines on domestic
regulation, encourage co-operation with relevant
Second Annex on Financial Services international standard setters, and establish
Annex on Negotiations on Maritime Transport Services guidelines for the recognition of qualifications.
Work on the accountancy sector was formally
Annex on Telecommunications completed in December 1998. Other professional
Annex on Negotiations on Basic Telecommunications services are covered within the wider mandate of
the Working Party on Domestic Regulation.
Related Instruments
Decision on Institutional Arrangements for the GATS Maritime Transport Services

Decision on Certain Dispute Settlement Procedures for the
GATS The Annex and the Ministerial Decision define
Decision on Trade in Services and the Environment the sector as covering international shipping,
auxiliary services and access to and use of port
Decision on Negotiations on Movement of Natural Persons facilities. They organise extended negotiations in
Decision on Financial Services the sector, which should conclude by June 1996.
Until the negotiations are concluded, the MFN
Decision on Negotiations on Maritime Transport Services obligation is suspended in the sector (Annex) and
Decision on Negotiations on Basic Telecommunications Members shall not apply any measure affecting
trade in the sector (Decision). In the sector, at the
Decision on Professional Services conclusion of the negotiations Members are free to
Understanding on Commitments in Financial Services take MFN exemptions, and to improve, modify or
withdraw any specific commitment without offering
compensation. The negotiations were suspended
in June 1996 and folded into the Doha Round.
Annexes no longer applicable

The Ministerial Decision on Negotiations on Movement of Natural Persons, the Second Annex on Financial
Services and the related Ministerial Decision, the Annex on Negotiations on Basic Telecommunications
and the related Ministerial Decision organised extended negotiations in these domains. These negotiations
also formed part of the so-called "built-in agenda" left over from the Uruguay Round. They have now been
completed and these Annexes and Decisions are no longer applicable.

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FACTSHEET

Decision on Institutional Arrangements for the GATS Maritime Transport Services

Annexes no longer applicable

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