Regulation in the frame of WTO
In the frame of WTO regulation of trade in services is fulfilled in compliance with General Agreement on Trade in Services.
According to General Agreement on Trade in Services trade in Services means as services delivery implemented by following methods:
1st method– cross-border delivery (cross-border trade)
Upon cross-border delivery the service crosses the frontier by means of telecommunication or postal communication at that a supplier and customer do not move the services over the border.
2nd method – consumption abroad (consumption abroad)
Service consumer both as a physical and juridical person moves over the border where receives or consumes the service. The Service supplier does not move over the border.
3rd method – commercial presence (commercial presence, right of establishment)
Company rendering the service crosses the border to open representation office or affiliate via which the service will be rendered.
4th method – presence of natural persons (presence of natural persons)
The service supplier moves over the border to the country of consumers’ presence to render services.
The main obligation the member-countries take on themselves upon accession to WTO in compliance with General Agreement on Trade in Services is rendering the services to the consumers of any country under the same favorable regime they use upon rendering similar services to similar consumers of any member-country. At that any member of WTO can continue exercising restrictive measure non-consistent with RNB provided that measure is entered into the list of exemptions.
Every country upon accession forms such list of exemptions. Exemption per period of validity shall not exceed 10 and shall be reconsidered not later than five years at subsequent rounds of negotiations on services sphere liberalization.
Thus in compliance with the Artice XVI of General Agreement on Trade in Services the WTO member-countries in their obligations on the services market access shall stipulate following conditions having restrictive character:
- restricting the total number of consumers as per quotas, monopolies, exclusive services suppliers or the test on economic feasibility
- restricting the total transactions values on services or assets in the form of quantitative quotas or requirement to carry out the test on economic feasibility
- restricting the total number of transactions on services or total scope of services production expressed as established quantitative measurement units in the form of quotas or requirement to test the economic feasibility
- restricting the total number of physical persons involved into certain services sector or number of physical persons which can be employed by services supplier and which are needed and have direct relation to a certain service delivery in the form of quantitative quotas or requirement to test the economic feasibility
- measures restraining juridical entities or joint ventures or requiring the certain forms the supplier can render the service
- restrictions on participation of foreign capital with maximum share of foreign participation in shareholders’ capital or in the total value of individual or aggregated foreign investments.