General Agreement on Trade in Services

The General Agreement on Trade in Services (GATS) 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.

About the GATS

Similar in principle to the General Agreement on Tariffs and Trade (GATT), which deals with trade in goods, the GATS has two primary objectives: first, to ensure that all signatories are treated equitably when accessing foreign markets; and second, to promote progressive liberalization of trade in services (over time, eliminating trade barriers to enable further participation in one another's markets).

Definition of 'General Agreement On Tariffs And Trade - GATT'

A treaty created following the conclusion of World War II. The General Agreement on Tariffs and Trade (GATT) was implemented to further regulate world trade to aide in the economic recovery following the war. GATT's main objective was to reduce the barriers of international trade through the reduction of tariffs, quotas and subsidies.

Formed in 1947 and signed into international law on January 1, 1948, GATT remained one of the focal features of international trade agreements until it was replaced by the creation of the World Trade Organization on January 1, 1995. The foundation for GATT was laid by the proposal of the International Trade Organization in 1945, however the ITO was never completed.

Purpose of GATT is to facilitate international trade by freezing and reducing tariff levels on cross-border traded commodities. The initials GATT stand for 'General Agreement on Tariffs and Trade'. The organisation was established in the year 1947.

On January 1, 1994, the North American Free Trade Agreement between the United States, Canada, and Mexico (NAFTA) entered into force.All remaining duties and quantitative restrictions were eliminated, as scheduled, on January 1, 2008.NAFTA created the world's largest free trade area, which now links 450 million people producing $17 trillion worth of goods and services.Trade between the United States and its NAFTA partners has soared since the agreement entered into force.

U.S. goods and services trade with NAFTA totaled $1.6 trillion in 2009 (latest data available for goods and services trade combined).  Exports totaled $397 billion. Imports totaled $438 billion.  The U.S. goods and services trade deficit with NAFTA was $41 billion in 2009.

The United States has $918 billion in total (two ways) goods trade with NAFTA countries (Canada and Mexico) during 2010.  Goods exports totaled $412 billion; Goods imports totaled $506 billion.  The U.S. goods trade deficit with NAFTA was $95 billion in 2010.

Trade in services with NAFTA (exports and imports) totaled $99 billion in 2009 (latest data available for services trade).  Services exports were $63.8 billion. Services imports were $35.5 billion.  The U.S. services trade surplus with NAFTA was $28.3 billion in 2009.