Preferentialism in services trade : an interpretation of the WTO rules and their application to the European Union's trade agreements in the field of services

Abstract

The thesis focuses on the liberalization of services in the context of preferential trade agreements (PTAs). The first part develops an interpretation of Article V of the General Agreement on Trade in Services (GATS) that regulates the conclusion of the so-called economic integration agreements (EIAs). It is argued that in the context of preferentialism, the GATS does not impose any market access discipline but aims at creating a non-discriminatory trading environment. Special attention is paid to Mode 4 and to the type of liberalization that it covers. In the second part of the thesis the main elements of Article V GATS (sectoral/modal coverage and non-discrimination) are employed to conduct an empirical analysis of EIAs. The chosen sample includes four of the European Unionﾒs international trade agreements that feature significant services liberalization. The services schedules of these four agreements are reviewed and rated to find out their level of liberalization. In the context of the EU, its services commitments continue, to a large extent, to be determined individually by its Member States. As the thesis shows, significant variations still exist among different Member States both in horizontal and sector-specific commitments. The thesis connects the EUﾒs internal situation to the wider issue of how deep EIAs should be in order to escape claims of non-compliance. It asks the question of how the exact coverage and level of non-discrimination should be assessed in a situation where commitments vary across different states or regions of the same contracting party. No clear answer can be provided but the thesis proposes that in order to be in line with its international obligations, the EU, as well as any WTO Member with internally divided regulatory powers in services, should ensure that when signing EIAs, the commitments of all Member States (or, in the case of other WTO Members, all states/regions/other entities with regulatory powers in services) reach the GATS threshold of substantiality in their level of liberalization.