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					Implications of the GATS and the
Doha-Round Negotiations on the
  Provision of Postal Services:
      Preliminary Findings
   Presentation to UPU’s Project Group on
           Relations with the WTO
           Berne, 11 October 2006


              Dr. Christian Pitschas, LL.M. / WTI
                       Advisors, Geneva
                  Implications of the GATS

   Structure of Presentation
       Introduction to the GATS
       Overview of General GATS Issues
       General GATS Obligations Relevant for the Supply of Postal
        Services
       Specific Commitments on Market Access and National
        Treatment
       Classification of Postal (and Courier) Services
       Domestic Regulation of Measures Affecting Trade in Postal
        Services
       Competition Policy for Postal Services
       Implications of the MFN principle and specific commitments

                        Dr. Christian Pitschas, LL.M. / WTI
                                 Advisors, Geneva
                      Implications of the GATS

   Introduction to the GATS
       General GATS obligations
            MFN treatment
            Monopoly/ exclusive service suppliers
            Domestic regulation
       Specific Commitments by WTO Members
            Market access
            National treatment
            Integral part of the GATS
       Progressive liberalization
            Doha-Round Negotiations

                             Dr. Christian Pitschas, LL.M. / WTI
                                      Advisors, Geneva
                       Implications of the GATS

   Overview of General GATS Issues
       Scope of Application of the GATS
            Services Sectors Covered by the GATS
                 Meaning of services sectors
                 WTO “Services Sectoral Classification List”
                 Postal services as sub-sector of sector “communication services”
            Exception: (Postal) Services Supplied in the Exercise of
             Governmental Authority if
                 The supply of the (postal) service is not a mere matter of
                  business; and
                 The supplier of the (postal) service is the sole supplier of that
                  service

                               Dr. Christian Pitschas, LL.M. / WTI
                                        Advisors, Geneva
                        Implications of the GATS

   Scope of Application Cont’d
       Measures by WTO Members Affecting Trade in (Postal)
        Services
                  Any measure of a legally binding character taken by
                   governmental and non-governmental bodies on the basis of
                   powers delegated by governmental bodies
                  Provided such measure affects (directly or indirectly) the:
                   supply/ consumption/ supplier of (postal) services
       Modes of Supply
            Four modes of supply
                  Cross-border (mode 1); consumption abroad (mode 2); commercial
                   presence (mode 3); presence of natural persons (mode 4)
            Subject to specific commitments

                                Dr. Christian Pitschas, LL.M. / WTI
                                         Advisors, Geneva
                      Implications of the GATS

   General Obligations under GATS Relevant for
    the Supply of Postal Services
       MFN Treatment
         Non-discriminatory treatment (in law and in fact) of like
          (postal) services/ service suppliers of any Other WTO
          Member
         Likeness of (postal) services/ service suppliers
                Relevant criteria: classification; nature & quality; end-uses;
                 consumers’ perception & behaviour  degree of competitive
                 relationship in the market
           Measures inconsistent with the MFN principle

                             Dr. Christian Pitschas, LL.M. / WTI
                                      Advisors, Geneva
                        Implications of the GATS

   General Obligations Cont’d
       Monopoly/ Exclusive Service Suppliers
            WTO Members must ensure GATS-consistent behaviour by
             monopoly/ exclusive service suppliers (e.g. through  regulatory
             oversight)
            Supply of a Monopoly/ Exclusive Service
                  Any conduct of monopoly/ exclusive service suppliers must comply
                   with both the MFN principle and specific commitments (if any)
            Supply of Services Outside the Scope of Monopoly/ Exclusive Rights
                  Specific commitments (if any) must not be undermined by abuse of
                   monopoly/ exclusive position (= unfair/ discriminatory practices)



                                Dr. Christian Pitschas, LL.M. / WTI
                                         Advisors, Geneva
                      Implications of the GATS

   Specific Commitments
       Market Access (MA)
            Through any of the four modes of supply
            MA is subject to “terms, limitations and conditions agreed and
             specified” in a schedule (= “specific commitments”)
            Terms, limitations and conditions on MA may differ from one
             sector/ sub- sector to another
            Terms, limitations and conditions on MA must not discriminate (in
             law or in fact) against services/ service suppliers of any other WTO
             Member (= “equal opportunity” of MA)
            Unlimited MA means no terms, limitations and conditions on MA (in
             that case the schedule concerned reads “None”; the opposite entry
             being “Unbound”)


                              Dr. Christian Pitschas, LL.M. / WTI
                                       Advisors, Geneva
                      Implications of the GATS

   Spec. Com. Cont’d
       National Treatment (NT)
            Clear distinction between MA and NT
            NT is subject to “conditions and qualifications” set out in a schedule
             (= “specific commitments”)
            Conditions and qualifications on NT may differ from one sector/
             sub-sector to another
            Conditions and qualifications on NT determine the standard of
             treatment to be accorded to services/ service suppliers of any other
             WTO Member compared to like domestic services/ service suppliers
            Full NT means no conditions and qualifications on NT (= “level
             playing field”; in that case the schedule concerned reads “None”; the
             opposite entry being “Unbound”)


                              Dr. Christian Pitschas, LL.M. / WTI
                                       Advisors, Geneva
                      Implications of the GATS

   Classification of Postal (and Courier) Services
       Postal services is a sub-sector of the sector “Communication
        Services”
       WTO “Services Sectoral Classification List” does not specify
        the content of postal services but refers to corresponding
        CPC No. 7511
       Main content of postal services: pick-up, transport and
        delivery services relating to letters, parcels and packages
            Provided these services are supplied by “the national postal
             administration” (NPA)
            Otherwise, these services are not postal services but courier services
             (=“mutual exclusivity” of postal and courier services)

                              Dr. Christian Pitschas, LL.M. / WTI
                                       Advisors, Geneva
                  Implications of the GATS

   Classification Cont’d
     NPA refers to a public body
     If a WTO Member privatizes its NPA, services
      supplied by the privatized (private) entity cannot be
      considered postal services any more (within the
      meaning of the WTO/ CPC classification system)
         Regardless of whether the WTO Member concerned
          confers a monopoly/ exclusive right on or delegates
          certain (public) powers to the privatized (private) entity
          with respect to the supply of postal (read: courier) services
          Such services must be considered courier services

                         Dr. Christian Pitschas, LL.M. / WTI
                                  Advisors, Geneva
                      Implications of the GATS

   Classification Cont’d
       Current classification system disregards the development of
        the market in question (in particular, the emergence of
        “express delivery services”)
       WTO Members are discussing modifications to that system
        (Doha-Round negotiations)
       Two different approaches are being proposed:
            Separative classification approach (proposed by the USA): add a new
             sub-sector “express delivery services” (as defined by the US proposal)
             to the sector “communication services” but retain the distinction
             between postal and courier services
            Integrative classification approach (proposed by the EC and others):
             merge the two sub-sectors of postal and courier services and include
             express delivery services in that new sub-sector

                              Dr. Christian Pitschas, LL.M. / WTI
                                       Advisors, Geneva
                      Implications of the GATS

   Classification Cont’d
       Comparison of the two classification approaches: the integrative
        classification approach is preferable because of the (partial) overlap
        between postal, courier and express delivery services and the (increasing)
        competitive relationship between the suppliers of such services
       Classifying postal services in the same sub-sector as courier and express
        delivery services does not prevent WTO Members from either imposing
        “universal service obligations” on all service suppliers in that sub-sector
        or reserving certain service activities to one particular (domestic) supplier
        ( monopoly/ exclusive service supplier)
       Compromise proposal: scheduling guidelines regarding specific commitments
        on postal, courier and express delivery services (irrespective of their –
        future – classification); according to these guidelines, schedules should list
        all sub-sectors that are open to competition


                              Dr. Christian Pitschas, LL.M. / WTI
                                       Advisors, Geneva
                       Implications of the GATS

   Domestic Regulation of Measures Affecting Trade in
    Postal Services
       Disciplines on Administrative Practices
            Measures of general application affecting trade in (postal) services must
             be applied in a “reasonable, objective and impartial” manner (=
             minimum standard of “due process” treatment provided specific
             commitments pertain to the sector/ sub-sector concerned)
            Any application of such measures by national authorities must not
             discriminate against (postal) services/ service suppliers of any other
             WTO Member (compared to like foreign or domestic (postal)
             services/ service suppliers)



                               Dr. Christian Pitschas, LL.M. / WTI
                                        Advisors, Geneva
                   Implications of the GATS

   Domestic Reg. Cont’d
       Minimum standard of procedural fairness regarding
        an authorization required for the supply of a (postal)
        service on which specific commitments are
        undertaken:
          Competent authority must provide, at the request of the
           applicant, information on the status of an application in a
           pertinent and timely manner
          Competent authority must provide, proprio motu,
           information on the decision concerning an application in
           a pertinent and timely manner

                          Dr. Christian Pitschas, LL.M. / WTI
                                   Advisors, Geneva
                      Implications of the GATS

   Domestic Reg. Cont’d
       Review of administrative decisions affecting trade in (postal)
        services
            Adm. Dec. must be open to review by judicial, arbitral or
             administrative tribunals or procedures, at the request of an affected
             (postal) service supplier (irrespective of specific commitments but
             subject to “constitutional carve-out”)
            Review must be prompt, objective (=based solely on relevant
             domestic laws and the facts of the case) and impartial (=unbiased by
             the interests of the competent authority)
            Review must result in “appropriate remedies where justified” (=at a
             minimum, where the adm. dec. has no legal basis and/ or does not
             correspond to the facts of the case)
            Adm. Dec. denying MA/ NT in breach of specific commitments
             must be overturned so as to enable MA/ NT in line with specific
             commitments
                              Dr. Christian Pitschas, LL.M. / WTI
                                       Advisors, Geneva
                        Implications of the GATS

   Domestic Reg. Cont’d
       Disciplines on Licensing Requirements & Procedures (LRPs)
            Pending the entry into force of (new) horizontal disciplines, the
             application of LRPs is subject to the following disciplines (in those
             sectors/ sub-sectors where specific commitments exist):
                  LRPs must be applied in a predictable, neutral, and horizontal manner
                   that is economic in nature and does not favour certain (domestic) (postal)
                   services/ service suppliers
                  LRPs must not be applied in a manner that would transform the
                   application process for a requisite license in and of itself into an obstacle
                   to trade in (postal) services
                  Application of LRPs must meet the necessity-test, i.e. it has to be
                   determined whether there is no reasonably available alternative measure
                   (= LRPs) that is less trade restrictive


                                  Dr. Christian Pitschas, LL.M. / WTI
                                           Advisors, Geneva
                   Implications of the GATS

   Disciplines on LRPs Cont’d
       Application of LRPs must not nullify and impair
        specific commitments in the sector/ sub-sector
        concerned, based on:
          Reasonable (legitimate) expectations of other WTO
           Members as to the competitive opportunities arising from
           the specific commitments concerned; and
          In light of the existing measures (= LRPs) at the point in
           time when the specific commitments were undertaken (=
           “stand-still” obligation)

                         Dr. Christian Pitschas, LL.M. / WTI
                                  Advisors, Geneva
                        Implications of the GATS

   Competition Policy: Conditions Relating to Monopoly/
    Exclusive Service Suppliers and Beyond
       Consequences for the liberalization of postal services
            Reserving certain “postal” services to one (domestic) postal service
             supplier makes that supplier the sole supplier of the services
             concerned (= monopoly/ exclusive right for the supply of the
             services concerned)
            WTO Member concerned must then ensure that that service supplier
             acts in conformity with
                  MFN principle and/ or specific commitments when supplying the
                   reserved (monopoly/ exclusive) services
                  Specific commitments when supplying (other) services outside the scope
                   of the monopoly/ exclusive position


                                Dr. Christian Pitschas, LL.M. / WTI
                                         Advisors, Geneva
                  Implications of the GATS

   Competition Policy Cont’d
       In the framework of the Doha-Round, WTO
        Members are discussing the introduction of “pro
        competitive” regulatory principles (in addition to
        those set out in Article VIII of the GATS)
          Telecoms “reference paper” serves as a template for such
           principles
          Such principles would be inscribed in WTO Members’
           schedules as “additional commitments”


                         Dr. Christian Pitschas, LL.M. / WTI
                                  Advisors, Geneva
                        Implications of the GATS

   Competition Policy Cont’d
       EC proposal on postal and courier services’ reference paper
            Regulatory framework for postal, courier and express delivery services
             (= one common sub-sector, based on “integrative” classification
             approach proposed by the EC), consisting of the following elements:
                  Prevention of anti-competitive practices (abuse of dominant position in
                   the market but no list of pertinent examples of such behaviour)
                  Universal service obligation must be administered in a transparent, non-
                   discriminatory and competitively neutral manner that is consistent with
                   necessity-test
                  Individual license may be required only for services within the scope of
                   the universal service obligation, such licensing is subject to principle of
                   transparency and susceptible to transparent, non-discriminatory and
                   objective appeal procedure through independent review body
                  Independent regulatory body whose procedures and decisions are
                   impartial


                                 Dr. Christian Pitschas, LL.M. / WTI
                                          Advisors, Geneva
                  Implications of the GATS

   Implications of the MFN Principle and Specific
    Commitments on MA and NT on Postal
    Services
       Implications for NPAs
          NPAs are governmental bodies
          Any measure by NPA affecting trade in postal services
           must comply with the general obligations under the
           GATS and the specific commitments of the WTO
           Member concerned (if any) in the postal services sub-
           sector (= “direct effect” of GATS on NPAs)
                         Dr. Christian Pitschas, LL.M. / WTI
                                  Advisors, Geneva
                      Implications of the GATS

   Implications Cont’d
       Implications for Cross-Border Supply of Postal Services
            Observance of the MFN principle as regards like postal services/
             service suppliers of any other WTO Member (= non-discriminatory
             treatment) unless MFN exemption listed for postal services
            Granting MA to postal services/ service suppliers of any other WTO
             Member in conformity with terms, limitations and conditions on MA
             (if any) [if no specific commitments are undertaken, there is no
             obligation to grant MA]
            Granting NT to postal services/ service suppliers of any other WTO
             Member in conformity with conditions and qualifications on NT (if
             any) [if no specific commitments are undertaken, there is no
             obligation to grant NT]
                             Dr. Christian Pitschas, LL.M. / WTI
                                      Advisors, Geneva
                         Implications of the GATS

   Implications Cont’d
       Implications for Measures Against Remailing
            Measures against ABA Remailing
                  Denial of MA in case of non-delivery depending on the scope of specific
                   commitments on MA (if any)
                  Denial of MFN treatment in case of non-delivery or claim of payment of internal
                   rates
                  Denial of MFN treatment if measures against ABA remailing differentiate
                   between the countries of posting
            Measures against ABC Remailing
                  Denial of MA in case of non-delivery depending on the scope of specific
                   commitments (if any)
                  Denial of MFN treatment in case of non-delivery
                  Denial of MFN treatment in case of claim of payment of higher terminal dues?
                  Denial of MFN treatment if measures against ABC remailing differentiate
                   between the countries of posting




                                  Dr. Christian Pitschas, LL.M. / WTI
                                           Advisors, Geneva
                      Implications of the GATS

   Implications Cont’d
       Implications for ETOEs
            Nature of ETOEs under the GATS
                 “commercial presence” (= any type of business or professional
                  establishment within the territory of a WTO Member for the
                  purpose of supplying a service  private body)
            MFN treatment of ETOEs
                 “Likeness” of services supplied by ETOEs compared to services
                  supplied by NPAs
                 “Likeness” of services supplied by ETOEs compared to services
                  supplied by private postal (read: courier) service suppliers

                              Dr. Christian Pitschas, LL.M. / WTI
                                       Advisors, Geneva
                        Implications of the GATS

   Implications Cont’d
       Implications for the system of terminal dues
            System of terminal dues draws a distinction based on whether
             incoming mail originates in a developed or developing country
            Inconsistency with the MFN principle
                  Measure by a WTO Member affecting trade in postal services: √
                  Treatment relating to like postal services: √
                  Treatment less favourable: √
            Exceptions?
                  MFN exemption?
                  Any other exception?
                  Waiver?

                                Dr. Christian Pitschas, LL.M. / WTI
                                         Advisors, Geneva
     Implications of the GATS




Thank your for your attention

christian.pitschas@wtiadvisors.com



         Dr. Christian Pitschas, LL.M. / WTI
                  Advisors, Geneva

				
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