WTO DDA and lssues on Healthcare Services

Lee, In Sung

Abstract

The GATS is the first and only set of multilateral rules and commitment covering Government measures which affect trade in services. It has two parts-the framework agreement containing the rules, and the national schedules of commitments through which each Member specifies the degree of access and is prepared for foreign service suppliers. The GATS covers all services with two exceptions, i.e., services provided in the exercise of governmental authority and , in the air transport sector, air traffic rights and all services directly related to the exercise of traffic rights. Notwithstanding this very broad scope, the agreement and the negotiations taking place under it are one of the least controversial areas of the current work in the WTO. This is because of its remarkable flexibility, which allows Governments, to a very great extent, to determine the level of obligations they will assume. There are four main elements of flexibility: Member Governments choose those service sectors or subsectors on which they will make commitments guaranteeing the right of foreign suppliers to provide the service. Each Member must have a schedule of commitments, but there is no minimum requirement as to its coverage and some cover only a small part of one sector; For those services that are committed, Governments may set limitations specifying the level of market access and the degree of national treatment they are prepared to guarantee; Governments were able to limit commitments to one or more of the four re cognized "modes of supply" through which services are traded. They may also withdraw and renegotiate commitments ; In order to provide more favorable treatment to certain trading partners, Governments may take exemption, in principle limited to a 10 years' duration, from the MFN principle, which is otherwise applicable to all services, whether scheduled or not. The agreement contains a number of general obligations applicable to all services, the most important of which is the MFN rule. But apart from these, each Member defines its own obligations through the commitments undertaken in its schedule. Because it is a basic principle of the agreement that developing countries are expected to liberalize fewer sectors and types of transactions, in line with their development situation, the commitments of developing countries are in general less extensive than those of more industrialized countries. It was this flexibility in the scheduling of commitments which put an end to the north-south controversy over services which marked the early years of th e Uruguay Round. So far, South Korea has been asked by 14 economies, including the U.S., EU, and China, to open its services market wider. According to the initial requests submitted to the World Trade Organization (WTO), these countries urged Seoul to grant greater access to the domestic medical treatment, legal services, education, finance, and distribution markets. The ministry of Foreign Affairs and Trade (MOFAT) plans to hold a related ministerial meeting today and roll out countermeasures by next March for follow-up negotiations with the nations concerned. In the initial requests, Korean newspapers reported that the U.S has demanded Seoul guarantee full access to the medical service markets and provide the same business conditions for American companies as local ones. This was, however, denied by the Korean government, while it accepted that fact that the China also called for the removal of barriers in the herbal medicine market as well as in the education. The WTO member economies have submitted initial requests for follow-up negotiations by sector to the new round of WTO talks in November last year. Thereafter, South Korea is required to come up with a response by next March to resolve the issues by the end of 2004. An agreement with the 14 countries should take effect from January 2005.