‘Who invented the four modes of services supply?’

The idea evolved over almost three years among negotiators in the Uruguay Round talks in the 1980s, crystallised by the EU delegation

By Peter Ungphakorn
POSTED FEBRUARY 15, 2022 | UPDATED FEBRUARY 19, 2022

We now take for granted that services can be traded internationally in four ways known as the “four modes”, but once upon a time this was not so clear-cut.

The four “modes of supply” (or “modes of delivery”) are:

  • cross border supply — where a service provider in one country sells the service to a customer in another country without anyone moving, for example professional advice over the telephone or internet
  • consumption abroad — where the customer travels, for example tourism
  • foreign commercial presence — where the service provider sets up a subsidiary or branch in another country, for example a bank or insurance company
  • movement or presence of natural persons — where individuals travel to provide the service either as staff in the foreign branch or subsidiary or independently, for example maintenance engineers travelling to service aircraft abroad

This is now established right at the top of the World Trade Organization’s General Agreement on Trade in Services, under Article 1, “Scope and Definition”:

 2.   For the purposes of this Agreement, trade in services is defined as the supply of a service:

(a)  from the territory of one Member into the territory of any other Member;

(b)  in the territory of one Member to the service consumer of any other Member;

(c)  by a service supplier of one Member, through commercial presence in the territory of any other Member;

(d)  by a service supplier of one Member, through presence of natural persons of a Member in the territory of any other Member.

How they are now applied can be seen in the commitments that each WTO member has made in services, in fiendishly complicated documents known as “schedules” of commitments (explained in this technical note).

But it took some time to arrive at that point.

Continue reading “‘Who invented the four modes of services supply?’”

‘Plurilateral’ WTO services deal struck after breakthrough text released

Creating new rules without officially calling them ‘rules’ solves an immediate problem but leaves long term questions

Skip this update and go straight to the article

This article was revised in December 2021, but follows the structure of the original version from September 2021.


UPDATE, DECEMBER 3, 2021:

The deal was eventually announced in Geneva on December 2, 2021, even though the Ministerial Conference had been postponed.

A lightly revised version of the September “reference paper” was released along with a list of the 68 participating members (counting the EU as 28) that had submitted “schedules” (lists) of commitments to streamline domestic regulation. These were combined into a single declaration.

The legally binding part of the deal is those commitments, which will be added to the schedules of commitments participating countries already attached to the WTO’s General Agreement on Trade in Services.

The reference paper itself will not be an official WTO agreement, but the new schedules of commitments will refer to the principles in the reference paper, making those commitments legally binding in practice.

By December 2, 2021, the 68 participants were:

Albania; Argentina; Australia; Austria; Bahrain; Belgium; Brazil; Bulgaria; Canada; Chile; China; Colombia; Costa Rica; Croatia; Cyprus; Czech Republic; Denmark; El Salvador; Estonia; European Union; Finland; France; Germany; Greece; Hong Kong, China; Hungary; Iceland; Ireland; Israel; Italy; Japan; Kazakhstan; Korea, Republic of; Latvia; Liechtenstein; Lithuania; Luxembourg; Malta; Mauritius; Mexico; Moldova, Republic of; Montenegro; Netherlands; New Zealand; Nigeria; North Macedonia; Norway; Paraguay; Peru; Philippines; Poland; Portugal; Romania; Russian Federation; Saudi Arabia, Kingdom of; Singapore; Slovak Republic; Slovenia; Spain; Sweden; Switzerland; Chinese Taipei; Thailand; Turkey; Ukraine; United Kingdom; United States; Uruguay


See also:
Explainer: The 18 WTO plurilaterals and ‘joint-statement initiatives’ | Participants in WTO plurilaterals | WTO news story | Comprehensive coverage on the independent website on WTO plurliaterals | Hamid Mamdouh on the legal options for adding another plurilateral agreement (investment facilitation) to the WTO rulebook.


By Peter Ungphakorn
POSTED SEPTEMBER 29, 2021 | UPDATED DECEMBER 6, 2021

Almost 70 members of he World Trade Organization (WTO) announced a deal to discipline domestic regulation of services on December 2, 2021, two months after they agreed on the rules they would apply.

The final text saw only minor adjustments compared with the original announced on September 27, 2021, and described as a breakthrough allowing the final deal to be struck.

The September announcement paved the way for the participants to agree on the complete package by the Ministerial Conference (November 30 to December 3 this year), the WTO said. At that time the talks’ participants were officially had 65, but actually 66 WTO members. This has now risen to 68 (or officially 67)

All that remained after the September 27 announcement was for the participants to go through each other’s individual commitments on how the new disciplines would be applied, the WTO said.

Continue reading “‘Plurilateral’ WTO services deal struck after breakthrough text released”

‘WTO terms’ apply in any future UK-EU trade relationship. But how much? Part 3 services and more

A lot has been said about Britain trading with the EU on ‘WTO terms’. But a fundamental misunderstanding needs to be cleared up. It’s not just about ‘no deal’. Part 3 of 3

By Peter Ungphakorn
POSTED MAY 27, 2020 | UPDATED MAY 27, 2020

This final of 3 parts looks at UK-EU trade in services
and other issues under “WTO terms”.
Part 1 is on the meaning of “WTO terms”. Part 2 is on goods trade.
A short summary is here
.
They draw partly on a paper from The UK in a Changing Europe

As with goods, if the UK and EU fail to reach agreement, or if the agreement has limited content, UK-EU trade will see new trade barriers in services. Also possible are complications in intellectual property and dispute settlement among other issues. Continue reading “‘WTO terms’ apply in any future UK-EU trade relationship. But how much? Part 3 services and more”

If the EU and UK fall back on WTO commitments what does this mean for services?

Be warned. I’m not about to give a proper answer. This is an attempt to point to where the information can be found. There’s so much detail — 160 sub-sectors of it — I’ll wait for others to take up the baton

Air transport: WTO commitments on all services are unbelievably complicated, but landing rights are totally excluded


By Peter Ungphakorn
POSTED APRIL 12, 2017 | UPDATED MARCH 11, 2020

A lot has been said about the impact on trade in goods if the UK and EU fail to strike a free trade deal after Brexit. They would rely on their WTO commitments, such as on tariffs and quotas. Much less has been said about the commitments on services, despite their importance to the UK economy.

This is not surprising. Firstly, countries’ commitments in the WTO on opening their services markets (known as services “schedules”) are unbelievably complicated. The WTO has a 2,000-word guide to understanding them (approximately 5 pages) — and even that is written for readers who are already familiar with a range of technicalities. (See also this technical note on services schedules.) Continue reading “If the EU and UK fall back on WTO commitments what does this mean for services?”