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Domestic Regulation within the Framework of GATS

by Jan Wouters and Dominic Coppens, Institute for International Law Working Paper No 93 - May 2006 1. INTRODUCTION ............................................................................................... 4 2. EXPLORING THE WEIGHING SCALE OF GATS: BALANCING MEMBERS’ RIGHT TO REGULATE AND TRADE LIBERALIZATION ....... 4 3. GENERAL FRAMEWORK OF GATS ............................................................. 7 3.1. SCOPE ............................................................................................................. 7 3.2. GENERAL OBLIGATIONS ................................................................................... 8 3.3 SPECIFIC COMMITMENTS ................................................................................... 9 3.4. GENERAL EXCEPTIONS ................................................................................... 11 3.5. PROGRESSIVE LIBERALIZATION ...................................................................... 12 3.6. INSTITUTIONAL ISSUES ................................................................................... 12 4. ARTICLE VI ON DOMESTIC REGULATION WITHIN THE FRAMEWORK OF GATS ................................................................................... 12 4.1. THE ROLE OF ARTICLE VI IN THE FRAMEWORK OF GATS................................ 12 4.2. ADMINISTRATION AND APPLICATION OF DOMESTIC REGULATIONS.................. 14 4.3. FUTURE DISCIPLINES ON DOMESTIC REGULATION .......................................... 16 4.3.1. The Working Party on Domestic Regulation (WPDR)............................. 17 4.3.2. Disciplines Developed under Article VI:4: the Accountancy Disciplines 19 4.3.3. Key Issues for Future Disciplines........................................................... 21 a) Legal Status of Future Disciplines............................................................ 21 b) Scope of Future Disciplines ..................................................................... 22 1. Type of Measures................................................................................. 22 2. Restricted to Non-Discriminatory Measures? ....................................... 24 3. Unconditional or Conditional Disciplines? ........................................... 35 4. Level of Government ........................................................................... 36 5. Sectoral or Horizontal Level?............................................................... 38 c) Content of Future Disciplines................................................................... 39 1. Transparency disciplines ...................................................................... 39 2. Necessity Test...................................................................................... 41 3. Mutual Recognition.............................................................................. 48 4. Role of International Standards ............................................................ 50 4.3.4. Article VI:5 on Provisional Application ................................................. 51 5. CONCLUSION: BALANCING THE RIGHT TO REGULATE AND TRADE LIBERALIZATION, EQUILIBRIUM REACHED?........................................... 53

Non-Discrimination and the Pillars of International Economic Law – Comparative Analysis and Building Coherency

Nicolas F. Diebold University of Lucerne Date Written: June 30, 2010 Abstract This working paper was presented at the Second Biennial Global Conference of the Society of International Economic Law (SIEL) 2010 in Barcelona, available on SSRN and as IILJ Emerging Scholars Paper 18 (2010). The final version is published uner the title 'Standards of Non-Discrimination in International Econocmic Law' 60 International and Comparative Law Quarterly (2011), 831-865. The principle of non-discrimination constitutes a corner-stone in different fields of international economic law, notably international trade in goods and services as well as intellectual property and investment protection. While its basic rationale appears to be straight forward, the application of the different elements which constitute a non-discrimination obligation has proven to be most complicated. Due to the high fragmentation in international economic law, adjudicating bodies are applying different interpretations and standards with regard to ‘less favourable treatment,’ ‘likeness,’ ‘regulatory purpose’, and ‘necessity’. This article shows the different theories for each of these elements on the examples of WTO law, NAFTA, investment protection and EU law and demonstrates how these theories affect the scope and liberalizing effect of the non-discrimination obligation. The article then attempts to develop a coherent factor-based application of non-discrimination rules suitable for all fields of international economic law. The article submits the theory that the elements of nondiscrimination should not be applied as strict legal conditions which must be proven by a complainant, but as a range of soft-factors which may be weighed and balanced by the adjudicating bodies. Keywords: Non-Discrimination, National Treatment, Like Products, Like Circumstances, Less Favourable Treatment, WTO, GATT, GATS, NAFTA, Bilateral Investment Treaties

The Draft GATS Domestic Regulation Disciplines – Potential Conflicts With Developing Country Regulations

(This is really a must read to understand what kinds of new destructions of democracy are in the pipeline, and what they mean.) "The most recent draft by the WPDR chairperson would impose seventy-one separate disciplines on domestic regulation that could be used separately or in combination to challenge services regulations through the WTO dispute process. The South Centre’s 2006 Analytical Note identified a number of common themes in the submissions developing countries have made to the WPDR. These themes are used below to organize discussion of key disciplines. A. Necessity tests"

'Ticking Time Bomb': Corporate Lawyers Openly Discussing Suing Nations Over Profits Lost to Covid-19 Measures

By Jake Johnson, Common Dreams. This is a major issue, Like Slovakia with its health insurance mess, in Achmea, once countries sign trade deals, they can't enact regulations that they need for common sense reasons, ISDS makes it impossible for countries to do things like close for epidemics, or limit business operations in needed ways, or (if they apply to foreign companies and their workers) It may even make it FTA illegal to raise minimum wages. Imagine if you could not fix deep seated problems like environmental risks, lack of affordable healthcare or rising education prices. That would be the US today. Thanks to ISDS and ISDS-like provisions in the WTO, now, for 20 years, corporations have always come first. This is why people can't be allowed to vote for improvements.

The Necessity Test The following communication has been received from the delegation of Korea with the request that it be circulated to the Members of the Working Party on Domestic Regulation.

COMMUNICATION FROM THE REPUBLIC OF KOREA 1. There have been many constructive discussions on how to define the “necessity test” in the context of domestic regulation for trade in services. The proposals made by Canada, Australia, and EC have each contributed to stimulating and advancing the discussions in this area. However, as each proposal and relevant agreement uses different wording for outlining and defining the necessity test, there has been some confusion as to the exact meaning and implications of its use. 2. Korea is of the view that the different wording – such as “trade-restrictive” or “burdensome,” – despite some variance in nuance and focus, does not differ in their implications. This paper thus aims to clarify any differences that exist, elaborate on the possible alternatives that can be used, and suggest a draft provision for the necessity test that could be used in establishing multilateral rules for domestic regulation. 3. In the meantime, there still remain unresolved issues like what should be considered a “legitimate policy objective,” or what factors should be considered to determine the feasibility of an alternative measure. For an effective and strict application of the necessity test, these two issues need to be resolved. However, they will have to be discussed at another time.

DS503

DS503 is a WTO dispute that was filed in 2016 by India against the US. It contains a number of innocent-looking requests that when investigated...

General Agreement on Trade in Services: negotiations concerning Domestic Regulations under GATS Article VI(4)

(November 24, 2000) "In the current preparatory negotiations on services (part of the “built-in” agenda at the WTO) governments are developing positions regarding GATS Article VI(4) which requires the development of “disciplines” on countries’ domestic regulations over services. Specifically, the article seeks to prevent “unnecessary barriers to trade” in regulations regarding “qualification requirements and procedures, technical standards and licensing requirements” and to ensure that regulations are “not more burdensome than necessary to ensure the quality of the service.” In our view, this entire exercise is unjustified. There should be no role for the WTO in overseeing non-discriminatory domestic regulations (those which do not discriminate in standards and qualifications based on nationality.) This exercise represents a wholly unwarranted intrusion of trade law into important domestic public safety laws".