GATS AND WELFARE SERVICES

GATS and Welfare services



GATS and Welfare services

Introduction

Mode 4 is one of the four modes of supply through which services may be traded under the GATS. Simply put, mode 4 occurs when a natural person of one WTO Member seeks to enter, or is present in, the territory of another Member in relation to the supply of a service. In other words, the GATS does cover the movement of people, but only to the extent that such movement is for the purpose of supplying a service (Jansen, 2005, 56).

Article I of the GATS defines mode 4 trade as "the supply of a service by a service supplier of one Member, through presence of natural persons of a Member in the territory of any other Member" Article XXVIII further defines a "service supplier" as "any person that supplies a service", and, in turn, a "person" means "either a natural or a juridical person".

1 ) Mode of trade

Mode 4 always involves a natural person, through whose presence services are being traded. However, that natural person is not necessarily the "service supplier". Depending on the nature of the transaction, the service supplier may be another natural person, or a juridical person. In each case it is vital to identify the service supplier, to whom the obligations in the GATS are owed. It is also important to determine the origin of the mode 4 service supplier, since the main substantive provisions of the Agreement, i.e. Most Favoured Nation treatment (Article II), market access (Article XVI) and national treatment (Article XVII), focus on "service suppliers of any other Member" (Mattoo, 2000, 142).

This is hardly surprising, as it is only service suppliers of other WTO Members, and not a Member's own suppliers or the suppliers of a non-Member, that are eligible for the treatment provided under the GATS.

The second type covered according to the Annex are "natural persons of a Member who are employed by a service supplier of a Member" (World Tourism Organization, 2009, 86). In other words, a distinction is made between the natural person and the service supplier. The service supplier can be a natural person as well, but it will be that person's employee who is present and delivers the service in the host Member. More commonly, however, the supplier will be a juridical person. The natural person and the service supplier need to be from a ...