GATS

What is meant by 'trade in services'?

Services include such varied things as health, water, education, transport, internet usage, fast food outlets , tourism and telecommunications. The General Agreement in Trade in Services (GATS) deals with this diversity of sectors by setting out rules specific to 'modes' that group certain types of services. These are:

• Cross-border supply: Services supplied from one country to another (e.g. international telephone calls)
• Consumption abroad: Consumers or firms making use of a service in another country (e.g. tourism)
• Commercial pressure: A foreign company setting up subsidies or branches to provide services in another country (e.g. foreign banks setting up operations in a country)
• Presence of natural persons: Individuals travelling from their own country to supplt services in another (e.g.consultants or nurses)

Privatisation and the GATS

The GATS aims to liberalise  services. Privatisation of services is said by some to offer improved services to poor countries and by others to be an opportunity for transnational corporations to make large profits. Efforts are being made to encourage developing countries to incorporate privatisation and trade reforms into their Pover Reduction Strategy Papers (PRSPs). These policies are controversial because the GATS is said to force governments to privatise services that most consider to be public goods that should be accessible to all, such as health, water, education etc. When transnational corporations, with their well-established and well-financed business models, have the opportunity to take over these services, the fear is that they will be monopolised and services priced out of the reach of poorer people.