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The digitalization of the economy combined with sophisticated tax planning has enabled some multinationals to avoid paying almost any income tax in most market jurisdictions from which they earn substantial profits. Faced with financial and political pressures to act, market states have sought to expand their tax bases so that these multinationals, especially those providing internet advertising and digital intermediation services, pay their ‘fair’ share of tax. The failure to reach an agreed outcome among Organisation for Economic Co-operation and Development and Group of Twenty members has led to an increasing number of states to take unilateral measures. In doing so, states need to navigate their obligations under double taxation agreements and trade agreements. An examination of typical double taxation agreements, the General Agreement on Trade in Services, and recent preferential trade agreements shows that states have limited options to expand their tax bases in compliance with their international obligations. Here, the imposition of an appropriately designed digital services tax has political and legal advantages. The growing volume of cross-border digital services and data flows suggests that greater engagement between the international tax and trade regimes is likely in the future, including in the negotiations of disciplines on electronic commerce.

The World Trade Organization (WTO) faces a watershed. Developed country Members want to abandon the Doha round and negotiate ‘new issues’, notably electronic commerce, as part of a broader US-led strategy to rewrite the global trade rules for the 21st century. Developing countries insist the Doha round be concluded before considering new issues and most reject the e-commerce agenda as foreclosing their options for digital development. This standoff dominated the MC11. The new e-commerce agenda has its genesis in the Trans-Pacific Partnership. Three factors complicate moves to export it to the WTO. First, those rules are blunt instruments designed to protect the first mover status and oligopolistic power of Big Tech. Second, they lack any development flexibilities or obligations. Third, their application to major developing country competitors and the potentially lucrative markets of larger developing countries requires multilateralization through the WTO, but that will be a highly contested process. That contest is now playing out through the plurilateral process announced by the e-commerce proponents during the MC11. The proposals assume a major expansion of Members’ commitments under the General Agreement on Trade in Services (GATS). Favourable interpretations of sectoral classifications, modes of trading services, and the application of technological neutrality to historical commitments would override the original GATS acquis that ensures developing countries can control their exposure, and seriously diminish their regulatory autonomy to maximize the opportunities of the digital economy and minimize the risks. Such an agenda could deepen the crisis at the WTO.

The conclusion of the Transatlantic Trade and Investment Partnership (TTIP) constitutes a priority and key component of the external trade policy of the European Union (EU). It is also an immediate follow-up to several years of regulatory cooperation between the two global trade powers. In an era of megaregionals, services is the only area where significant negotiating traction exists at the bilateral and multilateral level. However, recent events such as the imminent Brexit and the withdrawal of the USA from the Transpacific Partnership (TPP) cast doubt on the future of trade deals. Even so, services remain a key sector of export interest for the EU and thus completing agreements such as the TTIP or the Trade in Services Agreement (TiSA) is of crucial importance, allowing the EU to create new opportunities for service suppliers but also to reshape the regulatory philosophy governing the future regulation of global trade in services. With respect to TTIP, the EU Commission, backed by the EU executive, has advanced an ambitious agenda and submitted a conditional offer to the US, hoping for further liberalization on the two sides of the Atlantic. Against this backdrop, this article offers a critical account of the EU external trade policy, focusing on the EU’s recent external action with respect to services liberalization. The article advances three theses: first, that such ambitious agreements mark a new era of offensive services strategy which, however, is contained by internal conflicts and disagreements regarding certain still sensitive silos such as audiovisual or public services and Brexit shall exacerbate such internal conflicts in the medium run; second, that megaregionals can be used to accelerate domestic regulatory reform and openness in the service sector; and third, that TiSA will constitute a litmus test for the EU’s commitment to the World Trade Organization (WTO) cause. When appropriate, the article draws parallels with existing EU legislation and case law; other EU Free Trade Agreements such as the recently concluded Comprehensive Economic and Trade Agreement (CETA) with Canada; the General Agreement on Trade in Services (GATS); and TiSA.

While rules of origin (ROOs) for goods have been thoroughly discussed, similar rules for services remain nascent and have attracted insufficient scholarly attention to date. Despite their crucial role in determining the existence of trade in services and granting preferential treatment, current ROOs for services bear serious limitations as they are tied to the defectious approach of the General Agreement on Trade in Services (GATS). This article aims to examine the main strands of thought on this topic over the past two decades to illustrate the necessity of a new approach. It starts by affirming the importance of ROOs for services in the context of new patterns of trade. Next, it demonstrates how the GATS-based approach has brought progress in both rule-making practice and academic research to a standstill. By revisiting the ‘substantial transformation’ criterion, it then reveals the possibility of importing certain concepts from the sphere of goods to that of services and suggesting that some hints for the discussion should be found in other fields of law. Finally, it comes up with the recommendation that origin rules for services should be designed bottom-up and sector-specific.

At first glance, this article deals with a simple classification issue only: the coverage of certain manufacturing operations and the resulting products under the General Agreement on Trade in Services (GATS) rather than under its long-standing counterpart in merchandise trade, the General Agreement on Tariffs and Trade (GATT). Yet there are important structural/conceptual differences between the two Agreements, which may have far-reaching consequences, inter alia, for the use of GATT-based tariffs and trade remedies. It is submitted that the generally applied classification system in services could prompt companies to (re-) define the ownership conditions of otherwise identical production activities, with a view to achieving cover under the GATS and thus avoiding GATT disciplines. However, the relevant criteria separating goods- from services-related operations are not only hard to specify and monitor in practice, but it is also difficult to see an underlying economic rationale. In the interest of clarity and consistency, WTO Members might thus want to close this definitional trapdoor. Due to the rapid proliferation of international production-sharing arrangements, the stakes will likely be rising. The Author 2013. Published by Oxford University Press. All rights reserved., Oxford University Press.

High international mobile roaming charges have created concerns for consumers and regulators around the world, leading to discussion and activity in a range of international organizations as well as national and regional bodies, including in the course of ongoing negotiations. Policy-makers seem inclined to intervene in the market to reduce these charges, but the complexities of international telecommunications and the way in which roaming services are supplied present a barrier to a practicable regulatory solution at the local level. Proposals for bilateral agreements have therefore emerged in some jurisdictions, often involving capping wholesale roaming charges imposed by domestic telecommunications operators on foreign telecommunications operators from particular countries on a reciprocal basis. Before concluding any such agreement, governments must ensure that they fully consider their international trade obligations, including the most-favoured nation obligation in Article II of the World Trade Organization's General Agreement on Trade in Services. A potential violation of this obligation could be avoided if the roaming arrangement is carefully structured to ensure that it falls within the exception for economic integration in Article V of that agreement. The Author 2013. Published by Oxford University Press. All rights reserved., Oxford University Press.

The recent stunning failure of banks has put regulatory intervention high on the agenda of governments. Adequate risk monitoring, including by credit rating agencies, as well as measurement and management have proven a daunting task, whereas regulation of innovative financial instruments has not brought about adequate disclosure and transparency. Before the recent financial crisis, financial innovation was regarded as inextricably linked with economic growth and aggregate welfare. In the wake of the crisis, criticism as to the utility of financial innovation became more unequivocal. After reviewing the virtues and pitfalls of financial innovation, the paper analyses the main transparency initiatives undertaken in the EU and the US in the aftermath of the crisis to harness various financial innovations that have marked the history of financial markets in the past three decades, including hedge funds, derivatives and credit ratings. Furthermore, the paper critically assesses the likely impact of such regulations on the future of financial innovation. In addition, the paper reviews the approach to financial innovation that the General Agreement on Trade in Services (GATS) of the World Trade Organization (WTO) adopted in the 1990s and assesses the likely impact of the recent financial crisis on this stance. As the perimeter of regulation grows and countries become more suspicious about home-country financial regulation, trade in financial services is unlikely to remain unaffected. Nevertheless, the GATS appears to be running out of analytical tools, a fact that undermines its global role. The emergence of a new international financial architecture, including the upgrade of the FSB, the BIS and the IMF, exemplifies a shift of power away from the GATS in favour of this new matrix of specialized institutions. Within this new landscape, the GATS is bound to change – or become irrelevant.

The financial services regime, comprising the General Agreement on Trade in Services and bilateral free trade and investment agreements, reflects the 'orthodoxy' of highly liberalized and lightly regulated financial markets that has supported the ascendancy of financialization. That orthodoxy has fractured as the post-2007 global financial crisis exposed systemic instability in the financialization model and the failings of the associated regulatory regime. Yet, binding and enforceable financial services and investment agreements tie governments to that regime. Although international institutions and commentators increasingly advocate alternative strategies, such as the imposition of currency controls, governments that adopt them risk legal challenges for breaching their trade obligations. This risk is illustrated by assessing South Korea's capital controls of June 2010 against the market access, national treatment and transfers obligations, investment protections and prudential exceptions in Korea's free trade agreements with the USA and the European Union. To date, states whose firms dominate global finance have resisted high-profile calls within and outside the World Trade Organization to revisit the financial services regime. If they maintain that position, these embryonic tensions seem likely to intensify. Placing unacceptable constraints on national governments could propel the trade in financial services regime towards a crisis of legitimacy. Oxford University Press 2011, all rights reserved, Oxford University Press.

Regional trade agreements in services are a relatively recent, but rapidly expanding phenomenon. Their relationship with commitments undertaken under the General Agreement on Trade in Services (GATS) or offered in the Doha Round has attracted some attention in the literature. Relevant publications tend to focus on the 'value added' that such agreements might generate through broader sectoral coverage or deeper levels of liberalization. This article takes a different perspective, however, and focuses on provisions that fall short of the same countries' GATS commitments. Such 'negative preferences' are more than an isolated occurrence: they can be found in most recent agreements, including agreements involving some of the largest World Trade Organization (WTO) Members. The existence of 'negative preferences' or 'GATS-minus commitments' may prove relevant for several reasons: in particular, they could impinge on an agreement's legal status under the GATS and help create a trading system beyond the WTO. It is conceivable that such minus-commitments are mutually conceded in 'sensitive' sectors or tacitly accepted in view of 'side-payments' in non-WTO currency (including development finance). Those who subscribe to Bhagwati's comparison of PTAs with termites might thus have additional reason to be alarmed: the bugs' unconventional table manners. Oxford University Press 2010, all rights reserved, Oxford University Press.

The financial crisis of 2008-09 has cast palpable doubt on the relevance of the current legal framework governing trade in services for financial crisis prevention and management. The crisis revealed the limited utility and effectiveness of services trade law in dealing adequately with the trade-related regulatory fallout from the financial upheaval and the potentially distortive measures taken to mitigate its effects. Even as the crisis had little to do with trade policy as a contributing factor, such a statement still leaves unanswered the question of whether services trade law can or should play a more critical role in shaping the post-crisis financial architecture. The paper posits a number of trade-related policy and legal ramifications flowing from the financial crisis and its resolution. The post-crisis period affords a unique opportunity to clarify the scope of GATS law in financial services; establish with greater precision the remit of the prudential carve-out; and complete long stalled rule-making journeys on the key outstanding GATS disciplines of necessity and subsidies without which the law of services trade runs the very genuine risk of remaining a construct more theoretical than real.

While principles of non-discrimination amount to key constitutional principles in trade regulation, most-favoured nation (MFN) and national treatment are virtually absent in financial regulation except for the General Agreement on Trade in Services (GATS). The current GATS financial services framework aims at disciplining regulation and contains few, if any, incentives for the development of sound regulatory standards and institutions. Future amendments should create a framework allowing for the negotiation needed for adopting, incorporating, or referring to appropriate prudential standards and other common regulations for the financial industry within the GATS. Incentives should be created to develop and implement such standards as a matter of binding and enforceable obligations. The principles of MFN and national treatment will play an important role in providing level playing fields. Recourse to graduation allows different levels of economic and social development of World Trade Organization Members to be taken into account in shaping common financial regulations. Oxford University Press 2010, all rights reserved, Oxford University Press.

This article reviews the successes of the World Trade Organization (WTO) Agreement on Subsidies and Countervailing Measures (the strengthened discipline on export subsidies), and the failures (the lack of discipline on domestic subsidies) from the birth of the WTO in 1995 to the onset of the financial crisis in 2007--09. During the crisis, governments poured money into economically necessary or politically deserving industries. The prohibition on export subsidies held up fairly well during the crisis, but the prohibition on import-substitution subsidies was likely flouted by understandings that bail-outs of industrial companies would lead to use of local supply chains. Trillions of dollars were poured into service sectors, notably financial services and real estate, and there are no WTO rules for services subsidies, notwithstanding commitments to negotiate them in the General Agreement on Trade in Services. Most likely, if there had been any rules disciplining subsidies in the financial services sectors, they would have been ignored, as the disciplines on domestic subsidies for goods were often ignored during the crisis, and before it. The crisis threw into clearer relief the question of why governments agreed to rules in 1994 which they found too uncomfortable to obey, or to enforce against other governments. The Agreement on Subsidies and Countervailing Measures sets up rules which are not strict enough to eliminate the use of countervailing duties as protectionism, and disciplines on subsidies that are too loose to prevent politicians from over-subsidizing. The authors conclude with some thoughts on the future of subsidies disciplines within the WTO. Oxford University Press 2010, all rights reserved, Oxford University Press.

This article examines whether the General Agreement on Trade in Services (GATS) is a useful instrument to tackle government support that creates distortions of international competition in the banking sector. The GATS has no specific provisions on subsidies. However, general support schemes 'as such' or 'as applied' may violate Article XVII if they exclude foreign-owned banks with a commercial presence in the territory of the World Trade Organization (WTO) Member that adopts the scheme. This depends on the specific commitments of the WTO Member and the limitations to this commitment. Moreover, it is required that the excluded banks are 'like' the domestic banks. A single application of a general scheme may violate Article VI(1) if solid evidence is available that this application is not reasonable, objective or impartial. Despite these possible violations, the great majority of measures will still be justified under the broad 'prudential carve-out'. Only support measures that are not reasonably able to achieve the prudential goal will not be exempted. Hence, the GATS imposes restraint on government support only in very limited cases. The WTO Members should address the remaining uncertainties with regard to both the obligations and the exception. This would ensure that the GATS is able to prevent that government support distorts competition and would also alleviate concerns that the GATS constitutes a danger to financial stability. Oxford University Press 2010, all rights reserved, Oxford University Press.

WTO Members have more leeway under the General Agreement on Trade in Services (GATS) to elude the WTO's basic most favoured nation (MFN) obligation than in merchandise trade under the General Agreement on Tariffs and Trade. In particular, under the Annex on Article II Exemptions, each Member had the one-off opportunity--at the GATS' entry into force in 1995 or, if later, the date of WTO accession--to seek cover for the retention of whatever departures from MFN treatment. Such MFN exemptions are subject to relatively soft disciplines only. The relevant Annex provides that their duration should not exceed 10 years in principle, and that they be subject to negotiation in any subsequent trade round. In addition, the GATS allows for departures from MFN treatment, which are not subject to time constraints, including for Economic Integration Agreements and recognition measures related to standards, certificates and the like. Over 90 WTO Members (counting EC12 as one) have listed MFN exemptions for close to 500 measures in total. This article discusses their role within the structure of the GATS as well as governments' underlying policy intentions: grandfathering clause or active/offensive policy tool? It further traces the sectoral and modal patterns of current exemptions, their use by different groups of Members and the--limited--changes offered in the services negotiations to date. The authors submit that the non-availability of new exemptions, including for measures that had escaped Members' attention at the relevant point in time, could have added to the popularity of potential substitutes (including in the context of Economic Integration Agreements), promoted an excessively broad interpretation of existing exemptions and discouraged governments from rescinding those that had served their initial purpose. A more flexible approach might thus be warranted; possible options are being discussed. Oxford University Press 2009, all rights reserved, Oxford University Press.

This contribution examines how European conditions for takeovers of a European credit institution by a non-European credit institution may be assessed under the principle of Most Favoured Nation (MFN) in the General Agreement on Trade in Services (GATS). The article considers that violations are not unimaginable since current WTO case-law on 'likeness' insufficiently takes into account the risks that are linked to different prudential frameworks in which banks operate. However, a differentiation among banks from different trading partners through decisions on the 'equivalence' of consolidated supervision by certain non-European authorities with European supervision, may be saved under the GATS provisions on recognition. Nonetheless, lack of transparency in these decisions may remain problematic. Even if the prudential carve-out provides a broad exception for prudential measures, it may not necessarily justify this deficiency. The article illustrates how the European rules comply with GATS requirements and how consistency could further be ensured. It is shown that international prudential standards may play an important role in the interpretation of these provisions. The article argues that the GATS-scrutiny as well as the importance of international standards requires the European Union to intensify its efforts on international standard-setting. , Oxford University Press.

Foreign banks and the Chinese Government have different dreams about the business opportunities and obligations that arise under China's World Trade Organization (WTO) commitments on financial services. This article provides an overview of China's banking sector reforms and its gradual opening to foreign participation in the context of General Agreement on Trade in Services (GATS) rules governing international trade in financial services and the obligations that apply since China's WTO accession in December 2001. The article highlights the contradictory interpretations that China and other Members have issued regarding China's GATS commitments and provides a framework for assessing the WTO consistency of China's banking measures. An analysis is conducted under this framework to evaluate whether China has fully implemented its GATS commitments on (i) the acquisition of Chinese banks by foreign financial institutions, (ii) legitimate 'prudential regulation' in the banking sector, and (iii) full market access for credit card and electronic payment services. Notwithstanding the apparent complexity of GATS rules, the article concludes that the WTO legal framework supports the case for increased access to China's financial services market consistent with its GATS commitments, and fully consistent with China's plans for continuing domestic growth and its medium-term financial services export interests. , Oxford University Press.

After the Uruguay Round, negotiations under the General Agreement on Trade in Services (GATS) continued in several rule-making areas, including emergency safeguards and subsidies. However, there has been little progress to date. The negotiations on safeguards appear to have suffered from a combination of high ambition, limited flexibility and, possibly, too much inspiration from the existing mechanism under the General Agreement on Tariffs and Trade (GATT). Yet the GATS is different in at least two respects: its reach has been extended from cross-border trade to factor flows, and from an essentially tariff-only regime to many more permissible restrictions, including import-displacing subsidies. The question arises, whether and where safeguards could still serve a useful purpose. At the same time, with less enthusiasm, however, WTO Members have discussed the need for additional subsidy disciplines beyond current Most-Favoured-Nation (MFN) and, in scheduled sectors, national treatment obligations. A link between the two areas has not been established. This article thus seeks to identify and, as far as possible, tie up loose ends. While there appears to be little scope for GATT-type safeguards in services, a transitory arrangement, which allows for suspensions of new commitments during an implementation phase, might encourage more ambitious liberalization under the GATS.

The General Agreement on Trade in Services (GATS) negotiators faced a significant challenge when having to craft a comprehensive set of disciplines governing multilateral trade in services, and the result is somewhat complex. Some obligations, in particular the most favoured-nation treatment (MFN) obligation, apply across the board. Others, like the market access and national treatment obligations, apply only in respect of service sectors of a Member's choosing. There is overlap between the market access and national treatment obligations, and the relationship between these two disciplines and those on domestic regulation is not clearly established. Additional obligations have been adhered to on a voluntary basis, in particular in the areas of telecommunications and financial services. In general, the interpretation and understanding of Members' Schedules of Specific Commitments proves to be a laborious exercise. This provides fertile ground for difficult and often sensitive interpretive issues to arise. Although Members have thus far not made extensive use of dispute settlement procedures to resolve them, existing World Trade Organization (WTO) decisions already show the reach of GATS disciplines and their potential impact on Members' policies and regulations. The Gambling case has, in particular, sparked a debate as to what should be the right balance between trade constraints and the autonomy of Members' service regulators. This article reviews the GATS case law with a view to offering a critical assessment of the main systemic issues that have been addressed by WTO adjudicatory bodies. These issues are, respectively, the scope of application of the GATS, the interpretation of specific commitments in Members' Schedules, market access, non-discriminatory treatment, and general exceptions. , Oxford University Press.

The World Trade Organization (WTO) rules for services trade, under the General Agreement on Trade in Services (GATS), are far broader in policy coverage than their counterpart provisions under the General Agreement on Tariffs and Trade (GATT), reflecting, inter alia, the Agreement's extension to cross-border movements of services consumers and factors of production. At the same time, the GATS is significantly more flexible in application than the GATT. There are virtually no political sensitivities, protectionist or not, that could not be formally accommodated within its structure. Moreover, the paucity of relevant jurisprudence on key concepts and a yet incomplete rule-making agenda have provided additional scope for 'creative' interpretation. However, while flexibility was a sine qua non for the conclusion of the Agreement, given the diversity of institutional conditions, political concerns, and so on among participants, it has not been conducive to one of the key objectives: 'early achievement of progressively higher levels of liberalization'. This article discusses possible approaches that, within the Agreement's current structure, could promote the clarity, quantity, and commercial relevance of services commitments and address remaining rule-making issues. However, there is no panacea. The challenge remains to find a reasonable balance between economically meaningful disciplines and their broad application across sectors, modes of supply, and WTO Members. Copyright 2006, Oxford University Press.

Cross-border trade in services is growing rapidly, with both industrial and developing countries among the most dynamic exporters. Despite the substantial global benefits from such trade, the adjustment pressures created in importing countries could provoke a protectionist backlash-some signs of which are already visible in procurement and regulatory restrictions. The current negotiations under the Doha Development Agenda offer an opportunity to lock in current openness and preempt protectionism. This paper describes how a bold initiative under the General Agreement on Trade in Services can help secure openness.

The impact of the General Agreement on Trade in Services (GATS) on public services is subject to a vivid political debate. From a legal perspective, an important issue is the sectoral scope of the GATS and the exact meaning of the term 'services supplied in the exercise of governmental authority' in Article I:3(b) GATS. This paper shows that this provision is likely to be interpreted narrowly and that most public services will fall within the sectoral scope of GATS. The reason for this finding lies in the definition of governmental services, which emphasizes the non-commercial basis and non-competitive supply of a service. This definition distinguishes GATS law from the similar provision in Article 45 EC. WTO Members wishing to reduce the impact of GATS on public services can do so through their schedules of specific commitments or seek an interpretation of the GATS, which would give them more regulatory flexibility. Copyright Oxford University Press 2003, Oxford University Press.

This article examines the key issues that electronic commerce poses for global trade, using as a starting point the General Agreement on Trade in Services (GATS), the World Trade Organization (WTO) agreement most relevant to electronic commerce. It begins with an overview of electronic commerce, providing a workable definition of electronic commerce and examining its growth and economic impact. It then discusses the important function played by the WTO in electronic commerce, and the central role of GATS in that function. The article goes on to consider the compatibility between electronic commerce and global trade at three levels: first, at the textual level of GATS, providing recommendations to improve the treatment of electronic commerce within that agreement; secondly, at the structural level of the WTO agreements, proposing an integration of the General Agreement on Tariffs and Trade (GATT) and GATS to deal better with electronic commerce under the WTO regime; and thirdly, at the level of the global trading system, exploring how recognition of electronic commerce as a global public good may help reduce the digital divide between developed and developing countries.