Ramifications of GATS Mode 4 for European Union-India Trade Relations

Abstract

This paper argues that there remains substantial scope for emerging markets in general - and for India in particular - to make further commitments towards greater liberalization within the services sectors and within all modes of supply provided in the General Agreement on Trade in Services (GATS). It will be demonstrated that, despite the commitments made within the GATS, services sectors still exhibit limitations that restrict equal competition for foreign competitors, sometimes resulting in non-compliance with the World Trade Organization (WTO) doctrines of market access and national treatment. Different WTO Members set different strategies for services liberalization, reflected in their GATS or other negotiating positions. Excessive use of non-tariff barriers can lead to ineffective enforcement of GATS commitments, resulting in true market access lagging behind bound rates. Some countries keep a conservative position on their bound commitments, while in reality a more liberal access is enjoyed, affording them stronger leverage on future rounds of negotiation. A failure to effectively enforce bound commitments can also reflect an inability within a country to ensure uniform domestic implementation.

Keywords: European Union, India, international trade, temporary migration, GATS Mode 4

JEL Classification: F13, F22, K33