Annex 1B of the General Agreement on Trade in Services (GATS) is a vital component of the global trading system. This annex outlines the specific commitments made by member states in opening up their markets for trade in services. The GATS, which was established in 1994 as part of the World Trade Organization (WTO), seeks to promote free trade in services by removing barriers and restrictions to cross-border trade.
Annex 1B is divided into two parts: the first outlines the sectors in which member states have made specific commitments and the second outlines the conditions and limitations attached to those commitments.
The sectors covered in Annex 1B include a wide range of services such as transportation, telecommunications, financial services, and professional services. Each member state is required to list the specific sectors in which they have made commitments, and these commitments are then subject to review and negotiation.
The conditions and limitations attached to these commitments are designed to ensure that member states maintain a certain level of control over their domestic markets while still allowing for foreign competition. For example, a member state may impose certain licensing or regulatory requirements on foreign service providers to ensure that they meet certain standards.
Annex 1B also includes a process for resolving disputes between member states regarding their commitments under the GATS. This process involves consultation and mediation between the parties involved, and in some cases, may result in the establishment of a dispute settlement panel.
Overall, Annex 1B plays a critical role in promoting free trade in services by providing a framework for member states to negotiate and commit to opening up their markets. As the global economy becomes increasingly interconnected, the importance of the GATS and Annex 1B will only continue to grow.
