governmental authority exclusion

These are articles on the all important exclusion that defines what member government activities can be called "public services" and be excluded from the onerous GATS rules.

Article 1:3

Source - UNCTAD

(UN) short course on GATS dispute resolution.

if they have commitments in those areas, like the US has, the country has to go through the Article XXI procedure to leave GATS jurisdiction.


Is a Healthcare System under the control of the GATS?


Note: A 1998 note from the WTO's ruling Secretariat clarifies healthcare somewhat, making it more restrictive and less ambiguous. Unfortunately it means that "public option" systems like the UK's NHS are more clearly not exempt from GATS or its onerous rules. .

Another Example - education system - Flowchart by A. Verger.


Here is the text.

"For the purposes of this Agreement...

(b) 'services' includes any service in any sector except services supplied in the exercise of governmental authority;
(c) 'a service supplied in the exercise of governmental authority' means any service which is supplied neither on a commercial basis, nor in competition with one or more service suppliers."


Important Reading:

Essay "GATS and Public Services Systems"
by the British Columbian government (this is an extremely informative article) PDF.

A legal analysis, written in a law book style.- its the clearest analysis on Article 1:3 b+c out there.

It will help you understand the US healthcare situation a lot better!

If you are interested in the full story make sure to read the footnotes at its end.  You can actually read the entire thing from this animation.

GATS and Public Services Systems by the Canadian Government


The important Annex on Financial Services, is where what is arguably the most important version of the definition of the scope of this exclusion is.

It is, the one that could punitively impact Medicare if Medicare was "expanded" without leaving GATS first.

I wouldn't be surprised if this was actually the intent!

But its less well known than the one in Aricle I:3 b and c.

I would lso pay close attention to the leaked texts from TISA and TTIP and any other new FTAs which also take care to use this definition and might in the future be used to modiy it - unless we could somehow get them to change this, they might make it worse.

Changing this definition might be able to make changes to GATS and other FTAS that borrow from it but there really needs to be a GLOBAL discussion on this between developed countries. Because our interests are not the same as the developing countries who want the jobs in developed countries to take the pressure off their elites to raise wages.

They are claiming our elites traded them rights to a potentially very large number of jobs..

Here is the actual text from the Annex..


Annex on financial services
1. Scope and Definition
(a) This Annex applies to measures affecting the supply of financial services. Reference to the supply of a financial service in this Annex shall mean the supply of a service as defined in paragraph 2 of Article I of the Agreement.

(b) For the purposes of subparagraph 3(b) of Article I of the Agreement, “services supplied in the exercise of governmental authority” means the following:

(i) activities conducted by a central bank or monetary authority or by any other public entity in pursuit of monetary or exchange rate policies;

(ii) activities forming part of a statutory system of social security or public retirement plans; and

(iii) other activities conducted by a public entity for the account or with the guarantee or using the financial resources of the Government.

(c) For the purposes of subparagraph 3(b) of Article I of the Agreement, if a Member allows any of the activities referred to in subparagraphs (b) (ii) or (b) (iii) of this paragraph to be conducted by its financial service suppliers in competition with a public entity or a financial service supplier, “services” shall include such activities.

(d) Subparagraph 3(c) of Article I of the Agreement shall not apply to services covered by this Annex.

please read the commentary on the Annex in the "GATS and Public Services Systems"

document from the British Columbia (Canadian provincial) government

and also please read Patricia Arnold's essay here.

Especially her footnotes on it.

This is really quite important, because there is real danger of Americans being led into a sort of trap and losing the affordable cross-subsidized version of Medicare by our misunderstadning its meaning.


This is what's outside of the scope of the GATS


WTO Secretariat. Health and social services: background note by the Secretariat S/C/W/50, 18 September, 1998 (98-3558)

Markus Krajewski's essay on GATS scope is also very much worth reading.

Interpretation of Article I, Section 3 (b) and (c) of GATS - PublicServicesScope - article for CIEL by Markus Krajewski

Another useful explanation.

This is from two South African legal scholars and it was written for the ICTSD, part of the UN.

Public Services and the GATS - (Article by Cassim/Steuart) International Center for Trade and Sustainable Development

This document combines all the US GATS commitments in one file.
US GATS Schedule of Specific Commitments -(combined file made by Public Citizen)

WTO | Services: Guide to reading the GATS schedules of specific Commitments and the list of article II (MFN) exemptions

VIDEO: Scott Sinclair of explains the Governmental Authority Exclusion at the WTO Public Forum on TISA.

GATS and Libraries  (brief) 

Important -

What is a _service supplied in the exercise of governmental authority_ under Article I_3(b) and (c) of the General Agreement on Trade in Services_ _ HighBeam Business_ Arrive Prepared.pdf (excerpt)

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