GATS

1
GATS

• - WHAT IS IT?
• - TO WHAT EXTENT DOES IT APPLY TO AIR
  TRANSPORT?
• Pierre Latrille - WTO - March 2003

2
GATS WHAT IS IT?

• One of the three pillars of WTO
• WTO, founded 1995
• Successor GATT (1947)
• Which successfully liberalized and expanded trade
  in goods, by applying
• most-favoured-nation principle
• National treatment principle
• Tariff bindings
• Dispute settlement mechanism

3
GATS WHAT IS IT?

• WTO Coverage goods, services, intellectual
  property, with integrated dispute settlement
• The General Agreement on Trade in Services lowers
  barriers to trade through
• MFN
• Market access/national treatment bindings
• Transparency, rules on domestic regulation
• Dispute settlement

4
GATS WHAT IS IT?

• GATS principles applying across the board
• (i.e. regardless of the presence
• of absence of commitments)
• Most-Favoured-Nation Treatment (no discrimination
  among Members or preferences to non Members)
• Transparency (publication of measures)
• Domestic Regulation (mechanisms for appeal of
  administrative decisions)
• Recognition (of licenses and certifications and
  licensing and qualification criteria)
• Monopolies exclusive providers (prevent actions
  affecting MFN obligation)
• Business Practices (consultations on
  anti-competitive practices of companies)

5
GATS WHAT IS IT?

• GATS commitments
• Guarantee the conditions of operation of foreign
  services suppliers at a certain negotiated level
  of market access and national treatment
• Ensure that this level cannot be deteriorated
• Make this level available as a minimum to all WTO
  Members
• Are subject to periodic negotiations with a view
  to improve them

6
GATS WHAT IS IT? GATS PRINCIPLES APPLYING TO
COMMITTED SERVICES

• Transparency (notification of new or revised
  measures to WTO)
• Domestic Regulation (requirements, criteria
  standards to be objective, publicly known and not
  unnecessarily onerous, procedures not
  restrictive, implement measures impartially,
  promptly inform applicants for licenses or other
  authorizations)
• Monopolies exclusive providers (prevent actions
  adversely affecting commitments)
• Payments Transfers (no restrictions affecting
  commitments)

7
GATS WHAT IS IT?AREAS FOR FUTURE NEGOTIATIONS

• Emergency Safeguard Measures
• Government Procurement
• Subsidies
• Domestic Regulation A work program to
  elaborate more specific disciplines.

8
GATS WHAT IS IT?

• Scheduling principles
• Positive listing of sectors
• Negative listing of restrictions
• Market Access
• discriminatory and non-discriminatory measures
• 6 exhaustive categories
• number of suppliers,
• value of transactions/assets,
• number of operations,
• number of persons,
• legal form,
• foreign capital

9
GATS WHAT IS IT?

• Scheduling principles (continued)
• NT any discriminatory measure de facto or de
  jure
• The modes of delivery cross-border, consumption
  abroad, commercial presence, temporary movement
  of natural persons
• The additional commitments
• The freedom to modulate
• The minimum MFN standard effect

10
GATS WHAT IS IT?
11
GATS AND AIR TRANSPORT

• The annex on air transport excludes from the
  scope of the GATS
• traffic rights, however granted or
• services related to the exercise of traffic
  rights except
• aircraft repair and maintenance services
• selling and marketing of air transport services
• computer reservation system services

12
GATS AND AIR TRANSPORT

• Traffic rights are defined in a wide manner
• the right for scheduled and non-scheduled
  services to operate and/or to carry passengers,
  cargo and mail for remuneration or hire from, to,
  within, or over the territory of a Member,
  including points to be served, routes to be
  operated, types of traffic to be carried,
  capacity to be provided, tariffs to be charged
  and their conditions, and criteria for
  designation of airlines, including such criteria
  as number, ownership, and control.

13
GATS AND AIR TRANSPORT

• The services directly related to traffic rights
  are not defined except for the three of them
  explicitly included in the scope of the GATS
• "Aircraft repair and maintenance services" mean
  such activities when undertaken on an aircraft or
  a part thereof while it is withdrawn from service
  and do not include so-called line maintenance.

14
GATS AND AIR TRANSPORT

• "Selling and marketing of air transport services"
  mean opportunities for the air carrier concerned
  to sell and market freely its air transport
  services including all aspects of marketing such
  as market research, advertising and distribution.
  These activities do not include the pricing of
  air transport services nor the applicable
  conditions.
• "Computer reservation system (CRS) services" mean
  services provided by computerised systems that
  contain information about air carriers'
  schedules, availability, fares and fare rules,
  through which reservations can be made or tickets
  may be issued

15
GATS AND AIR TRANSPORT

• Results of the negotiations (1990-1993)
• maintenance 34 commitments
  2 MFN exemptions
• marketing 23 commitments
  17 MFN exemptions
• CRS 28 commitments 16 MFN
  exemptions

16
GATS AND AIR TRANSPORTAnalysis of Commitments
Made by Members on Maintenance Services(Number
of Full, Partial and Non-Commitments by Mode of
Supply)
17
GATS AND AIR TRANSPORTAnalysis of Commitments
Made by Members on Selling and Marketing Services
(Number of Full, Partial and Non-Commitments by
Mode of Supply)
18
GATS AND AIR TRANSPORT Analysis of Commitments
Made by Members on Computer Reservation Services
(Number of Full, Partial and Non-Commitments by
Mode of Supply)
19
GATS AND AIR TRANSPORT WHAT NEXT? Other
Commitments taken in Air Transport Services
(Number of Full, Partial and Non-Commitments by
Mode of Supply)
20
GATS AND AIR TRANSPORTMFN Exemptions in Air
Transport Services
21
GATS AND AIR TRANSPORT

• Between 1995 and 2003, 14 acceding countries out
  of 22 have taken air transport commitments,
  namely
• Albania, Bulgaria, China, Chinese Taipei,
  Croatia, Ecuador, Estonia, Georgia, Jordan,
  Kyrgyz Republic, Latvia, Oman, Panama and Armenia

22
GATS AND AIR TRANSPORT

• Among the 13 offers of acceding countries that
  are presently discussed, 5 contain air transport
  draft commitments, namely
• Cambodia, FYROM, Russia, Saudia Arabia,
  Ukraine
• Two parallel processes started in 2000
• the review
• the GATS 2000 Negotiations

23
GATS AND AIR TRANSPORT WHAT NEXT?

• 1 Doha Development Agenda
• like all other services, the three explicitly
  covered services will be the subject of new
  negotiations as of November 1999 in order to
• add or improve commitments
• reduce or suppress MFN exemptions

24
GATS AND AIR TRANSPORTWHAT NEXT?

• Negotiations started January 2000
• Exchange of requests June 2002
• Exchange of offers March 2003
• Cancun Min. Conference September 2003
• End of Negotiations December 2004

25
GATS AND AIR TRANSPORTWHAT NEXT?

• Discussions based on negotiating proposals
• Over 100 proposals, among which 6 are on air
  transport (EU, Norway, Chile, New Zealand and
  Colombia Costa Rica)

26
GATS AND AIR TRANSPORTWHAT NEXT?

• Except for Colombia and Costa Rica...
• Great similarities in the proposals
• Inclusion of ancillary services such as ground
  handling, leasing, catering, airport
  management, services auxiliary to all modes of
  transport
• But also some variations
• - Norway Over flight and transit
• - Australia Non-scheduled, dedicated freight,
  ownership
• No formal proposal yet

27
GATS AND AIR TRANSPORTWHAT NEXT?

• 2 review
• The annex stipulates that The Council for Trade
  in Services shall review periodically, and at
  least every five years, developments in the air
  transport sector and the operation of this Annex
  with a view to considering the possible further
  application of the Agreement in this sector.

28
GATS AND AIR TRANSPORTWHAT NEXT?

• A) Review of developments in 14 subsectors
• 1. Aircraft repair and maintenance
• 2. Selling and marketing including e-com
• 3. Computer reservation services
• 4. Franchising
• 5. Services auxiliary to all modes of transport
• 6. Rental and leasing
• 7. Catering

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GATS AND AIR TRANSPORTWHAT NEXT?

• (contd)
• 8. Refuelling
• 9. Ground handling
• 10. Airport management services
• 11. Air traffic control services
• 12. General aviation services
• 13. Other auxiliary services
• 14. Commercial aviation

30
GATS AND AIR TRANSPORTWHAT NEXT?

• B) Operation of the Annex
• Conflicting views
• C) Extension of the Annex
• No consensus for an extension of the Annex
• No consensus to undertake work of
  clarification on the Annex
• 4 Meetings so far
• Sept Dec 2000, October 2001 March 2002