ratchet clause

A Ratchet clause in an international trade agreement means that if – after entry into force of an agreement –

IF a Party unilaterally removes a barrier in an area where it had made a commitment, it cannot reintroduce it anymore unless some provision allowing a procedure to do so exists.

"Removes a barrier" means deregulate, for example, eliminating any requirement after a trade agreement decides it becomes in all practical terms irreversible if a ratchet clause exists. (Unless some majority or unanimous approval of international Parties agree to change it)

In other words it locks in. Its a one way "ratchet". Because of the cost of violating these provisions, restoring the right to regulate can be made very expensive.

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There is a very good description of ratchet, standstill date and rollback in this document from the (failed) MAI agreementMost of what it says also is implemented quite similarly in the US sponsored add ons to GATS so it applies to the US if the sector is financial services.

Here is another explanation from the EuropeanFAQ on TISA.

"Standstill and ratchet clauses
A Standstill clause in a trade agreement means that the Parties have to list all the barriers as
they are at the moment of taking commitments and afterwards cannot introduce any new
barriers.
A Ratchet clause in a trade agreement means that if – after entry into force of an agreement
– a Party unilaterally removes a barrier in an area where it had made a commitment, it
cannot reintroduce it anymore. Typically, these are subject to exceptions (i.e. TiSA parties
exempt several sectors from the clause). For example, the EU offer contains exceptions
related to public services such as health, education, and water distribution which will not be subject to standstill and ratchet.
It is important to note that in TiSA standstill and ratchet clauses do not apply to market
access commitments. Standstill and ratchet clauses only apply to measures that allow the Party to discriminate and treat foreign services suppliers worse than domestic service
suppliers.
These clauses do not in any way affect the right of governments to introduce regulatory
measures or standards that treat all services providers – be it from domestic or foreign – in
the same way. Therefore, TiSA Parties will remain free to introduce new laws setting
minimum wages, and social, safety, quality or environmental standards, as long as these
applies equally to foreign and local suppliers.
For the EU, which already offers a high degree of openness to foreign service providers,
ratchet and standstill clauses make it possible to ensure an ambitious outcome in the
Agreement and to secure reciprocal treatment for our service providers abroad.

Basically, ratchet means limit changes to only deregulation, liberalization.

This serves to set aside democracy in these areas by mutual agreement of nations' ownership.