Environmental Engineering Reference
In-Depth Information
This chapter provides an overview of GATS as the legal framework for global trade in
services and summarizes the debates over who should regulate the service economy. Then
the focus shifts to how GATS could a
ect environmental policy. One section covers com-
mitments in several environmental sectors, and another covers negotiations on new disci-
plines for domestic regulation.
ff
GATS in a nutshell
WTO trade disputes
WTO agreements do not automatically nullify or pre-empt domestic laws. Rather, they
are enforced through trade disputes between nation-states. The agreements obligate
national governments to 'ensure' compliance by sub-national governments (GATS art.
I(3)). A dispute panel hears and decides a case, and the losing country may seek review by
the WTO's Appellate Body (WTO-DSU, 1994). The country that wins a WTO dispute
may impose trade sanctions in order to prompt the losing country to repeal or amend the
o
s or ignoring patents or copy-
rights. Since trade sanctions are often applied to commerce outside of the sector in
dispute, they work like a secondary economic boycott. When a WTO panel decides a trade
dispute, it must answer three questions that re
ff
ending law. Sanctions include imposing punitive tari
ff
fl
ect the structure of trade agreements,
including GATS.
1.
Is the measure covered by a trade agreement?
2.
If covered, is the measure consistent with trade rules?
3.
If not consistent, is the con
fl
ict excused by a general exception?
Coverage
GATS covers measures that a
ect trade in services, except for services supplied
under 'government authority'.
1
However, this carves out only some government ser-
vices: those that are neither commercial (e.g. free) nor in competition with another
supplier.
Some GATS rules cover measures in all sectors, and some apply only where a WTO
member has agreed to 'commit' a particular service. Countries make commitments for
particular sectors and 'modes' of supplying services, for example, establishing commer-
cial presence of a subsidiary company.
2
The USA has commitments in many sectors that manage or a
ff
ect the environment,
including pollution control, wastewater, solid waste, hazardous waste, construction, ser-
vices incidental to mining and services incidental to energy distribution, to name a few.
The USA has o
ff
ered to make new commitments in sectors that would cover the infra-
structure of LNG ports, including bulk storage of fuels and pipeline distribution of fuels
(USA, 2005; USTR, 2007e)
ff
Existing trade rules
The most signi
fi
cant GATS rules are:
Most favored nation
- MFN prohibits discrimination for/against certain countries.
It covers all sectors (art. II).
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