The General Agreement in Trade on Services (GATS) and the Health Care Systems
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seminar surveyer
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Joined: Sep 2010
17-01-2011, 03:24 PM

Miguel San Sebastián, MD, PhD

The World Trade Organization

1947: GATT (General Agreement on Tariffs and Trade)
1995: WTO (World Trade Organization)
- trade in goods + agriculture + services + intellectual property
- binding trade disputes procedure

151 members (3/4 developing countries)
Ministerial conference (every 2 years)
General Council (monthly)
oversees day to day operations
directs the dispute settlement system
encharge of the trade policy review mechanism

WTO: purposes

To assist the free flow of trade by facilitating the removal of trade tariffs or other border restrictions on the import and export of goods and services
- Multilateral trade agreements (MLAs)

To serve as a forum for trade negotiations
- Most favoured nation clause
- National treatment clause
- exceptions: poor countries
To settle trade disputes based upon an agreed legal foundation

MLAs relevant to Public Health

Agriculture Agreement
Agreement on Technical Barriers to Trade (TBT)
Agreement on Sanitary and Phytosanitary Measures (SPS)
Agreement on Trade Related Aspects of Intellectual Property Rights (TRIPS)
General Agreement on Trade in Services (GATS)

Successive rounds of negotiations “with a view to achieving a progressively higher level of liberalization” in their service sector (art. XIX)
WTO members make liberalization requests / offers of other member countries in bilateral secret meetings in Geneva

How does GATS work? (1)

Successive rounds of negotiations “with a view to achieving a progressively higher level of liberalization” in their service sector (art. XIX)
WTO members make liberalization requests / offers of other member countries in bilateral secret meetings in Geneva

Scope of GATS

151 countries (all WTO members)
Any sector (160) in any service except:
- Services supplied in the exercise of governmental authority (fire, police, …)
- Traffic air regulations

Key principles

Non discrimination
- Most Favoured Nation Treatment (MFNT): applies to all countries that signed GATS
- National Treatment (NT): applies only to those sectors for which commitments are made
Market access (6 quantitative limitations)

Transparency: all regulations accessible and open to appeal
Temporary exemption: to MFN and NT i.e., on short-term economic crises
Lock-in effect: once a commitment is made, it is very difficult to withdraw it

Health related sectors and sub-sectors

1. Business services
A. Professional services
h. Medical and dental services
j. Midwives, nurses, physiotherapists, paramedical services
7. Financial services
A. All insurance and insurance-related services
a. Life, accident and health insurance services
8. Health related and social services
A. Hospital services
B. Other human health services

GATS and public services

GATS does not apply to services “supplied in the exercise of government authority”

GATS and domestic regulation
“GATS does not remove a government´s right to regulate services in its country”
Government regulation of a service should be “not more burdensome than necessary to ensure the quality of the service” (possibility of necessity test)
 Threat to democracy?

To extend the number and extent of commitments made
To remove existing limitations on current commitments
To bind commitments so that they cannot be reversed

General Recommendations
Future negotiations

Call a halt to the current WTO negotiations on rules governing domestic regulation;
Call for a change to GATS rules which restrict countries from retracting commitments already made under GATS


GATS is “first and foremost, an instrument for the benefit of business, and not only for business in general, but for individual service companies wishing to export services or to invest and operate abroad” (European Comission)



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