MFN Treatment: Article II of the GATS authorizes members to treat the service providers of all other members without delay and unconditionally, „a treatment that is no less favourable than that given to comparable service providers in another country.“ In principle, this is a prohibition of preferential regimes between groups of members in certain sectors or reciprocity rules that limit access to the dense to trading partners who give similar treatment. General Agreement on Trade in Services (GATS): GATS is a legally binding framework for international trade in services. See also related instruments. 6. A service provider of another member, who is a legal entity incorporated under the law of a party within the meaning of a contract covered by paragraph 1, is entitled to treatment under this agreement, provided that he performs important activities on the territory of the parties to such an agreement. (5) If necessary, recognition should be based on multilaterally agreed criteria. In appropriate cases, members work, in cooperation with relevant intergovernmental and non-governmental organizations, to define and adopt common international standards and criteria for recognition and common international standards for the practice of relevant service occupations. While services currently account for more than two-thirds of world output and employment, they account for no more than 25% of total trade, as measured by the balance of payments. But this apparently modest proportion should not be underestimated. Indeed, the balance of payments statistics do not cover one of the types of services defined in the GATS, i.e.
the supply by commercial presence in another country (mode 3). Although services are increasingly being exchanged in their own legislation, they also serve as essential inputs for the production of goods and, therefore, services, when value-added, account for about 50% of world trade. By committing in their timetables to liberalising trade in certain service sectors in one or more of the four types of supply, Member State governments have „linked“ these obligations, since tariffs are linked under the GATT. They can only be amended or withdrawn after negotiations with other contracting parties. These negotiations generally involve compensation in the form of trade concessions of similar value. The existence of specific commitments entails other obligations relating, among other things, to the notification of new measures having a significant impact on trade and the prevention of restrictions on international payments and transfers. The provision of many services often requires the simultaneous physical presence of the producer and the consumer. There are therefore many cases where, in order to be commercially reasonable, trade obligations must extend to cross-border consumer movements, the establishment of a commercial presence in a market or the temporary free movement of the service provider.
5. Where a member intends, at the time of the conclusion, of the extension or substantial modification of an agreement covered in paragraph 1, to withdraw or amend a specific obligation contrary to the conditions set out in its timetable, he must inform at least 90 days in advance of this amendment or withdrawal and the procedure provided in paragraphs 2, 3 and 4 of Article XXI applies.