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CONCEPT OF MARKET ACCESS OF SERVICES IN INTERNATIONAL TRADE LAW

Aug 04, 2021
     

The capacity of a firm or country to sell products and services across borders refers to marketaccess. In local and foreign trade market access can be utilized, even if the latter is the moreusual situation. Free-trade access to the market is not the same as the market access.The opportunity to commercialize in the market is typically coupled with taxes, levies oreven quotas, but free trade involves the cross-border movement of products and serviceswithout governmental additional charges. However, market access is considered an earlystage in establishing commercial links. In contrast to genuine free trade, the declaredobjective of trade talks is increasingly market access.In the era of globalization international trade has become the most significant part in terms ofaccumulating of global wealth by different countries. International trade is the trade betweentwo countries or more countries wherein these countries enter into an agreement to carry on atrade between them. This agreement involves complex negotiations amongst the mostimportant is of the market access. Countries no more follow free trade practice as they haverecognized it has a threat to their domestic producers or industries and have instead shifted tonegotiate in terms of market access.During all these negotiations, the parties usually advocate market access to their exportsectors while seeking to restrict market access to import items that could be competitive withsensitive or politically strategic domestic businesses. Market access is regarded as separatefrom free trade as the negotiating process is targeted towards profitable commerce that maynot require further free trade.The World Trade Organization is an international organization that regulate trade betweentrade agreements and disputes or negotiations arising out of those trade agreements betweenits member countries. All the above-mentioned negotiations take place on a platform set upby the WTO.GATS is the only multilateral trade agreement that governs the flow of services between themember countries of WTO. The agreement covers the following 4 modes of supply related toservices:

1. Cross-border provision is designed to encompass the flow of services into otherMember territory (e.g., bank services or architecture sent by telecommunications ormail) from one Member's territory to another;2. Consumption abroad refers to circumstances in which the consumer of a service (e.g.the tourist or sick) enters the territory of another member for a service;3. Commercial presence indicates that a service provider of one member creates aterritorial presence in another member's area in order to provide a service, includingthrough ownership or rental of buildings (e.g. hotel chains, etc.)4. The presence of natural persons consists of persons from one member visiting anothermember's territory to provide a service (e.g. accountants, doctors or teachers).However, it is specified in the Annex on the Movements of Natural Persons thatmembers are free to take permanent actions on citizenship, residency, or access to thelabor market.Market access in respect of trade in services is stated in Article XVI of General Agreement ofTrade in Services also known as GATS 1995. Access to the market in specific areas is anegotiated obligation. The provisions of Article XVI may be subject to different kinds ofconstraints (2). The number of service providers, services businesses and workers involved,the number of transactions, the legal structure of the service supplier or the participation offoreign capital, for instance, may be subject to limits.Each member of the WTO must establish a schedule of special commitments identifying theservices for which it ensures market access, national treatment and any other restrictions.Additional undertakings in respect, for instance, of adoption of certain standards or regulatoryprinciples may also be made under the schedule of specific commitments. Commitments aremade to each of the four main service delivery type as mentioned above.CONCLUSIONMarket access is the most important area that needs negotiation on the service tradeagreements entered into by the member nations or governments with respect to trade inservices. There is a specific provision related to Market Access specified under Article XVIof the GATS agreement. Countries no more follow free trade practice as they haverecognized it has a threat to their domestic producers or industries and have instead shifted tonegotiate in terms of market access.


     
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