GATS 4 modes

The General Agreement on Trade in Services (GATS 서비스무역 일반협정/服务贸易总协定) is a treaty of the World Trade Organization (WTO) that entered into force in January 1995 as a result of the Uruguay Round negotiations. The treaty was created to extend the multilateral trading system to service sector, in the same way the General Agreement on Tariffs and Trade (GATT) provides such a system for merchandise trade.

All members of the WTO are signatories to the GATS. The basic WTO principle of most favoured nation (MFN) applies to GATS as well. However, upon accession, Members may introduce temporary exemptions to this rule.

Key words
WTO, GATS mode, cross-border service trade, most favored nation (MFN), migration

Four Modes of Supply
The GATS covers four modes of supply for the delivery of services in cross-border trade:

Take an example of medical service.
 * Mode 1 (국경간 공급): cross-border telemedicine (원격진료);
 * Mode 2 (해외소비): medical tourism (의료관광);
 * Mode 3 (상업적 주재): establishment and operation of overseas hospitals; and
 * Mode 4 (자연인의 이동): medical doctors and nurses' obtaining of foreign licenses and working at foreign hospitals.

Historical background
While the overall goal of GATS is to remove barriers to trade, members are free to choose which sectors are to be progressively "liberalised", i.e. marketised and privatised, which mode of supply would apply to a particular sector, and to what extent liberalisation will occur over a given period of time. Members' commitments are governed by a "ratchet effect", meaning that commitments are one-way and are not to be wound back once entered into. The reason for this rule is to create a stable trading climate. However, Article XXI does allow Members to withdraw commitments.

Some activist groups consider that GATS risks undermining the ability and authority of governments to regulate commercial activities within their own boundaries, with the effect of ceding power to business interests ahead of the interests of citizens. In 2003 the GATSwatch network published a critical statement which was supported by over 500 organisations in 60 countries. At the same time, countries are not under any obligation to enter international agreements such as GATS. For countries that like to attract trade and investment, GATS adds a measure of transparency and legal predictability. Legal obstacles to services trade can have legitimate policy reasons, but can also be an effective tool for large scale corruption (De Soto, Hernando. The Mystery of Capital: Why Capitalism Triumphs in the West and Fails Everywhere Else.)

Sectors addressed
Services Sector Classifications addressed in the GATS are defined in the so-called "W/120 list", which provides a list of all sectors which can be negotiated under the GATS. The title refers to the name of the official WTO document, MTN.GNS/W/120.