The phenomenon of trade globalization is now made more complicated by the rapid and intensive development of regional trade agreements (RTAs).Footnote 1 Initially focused on trade in goods, ever more RTAs are now extensively dealing with trade in services.
Although international trade in services has gradually gained more attention in scholarly writing, this field is far from being thoroughly researched. This is true for the global WTO level in respect of the General Agreement on Trade in services (GATS) and even more so for regional trade agreements.
Regulatory Autonomy and International Trade in Services by Bregt Natensis a very timely publication. It contributes to the analysis of regulation of trade in services both in the WTO and in several RTAs (selected by the author) that contain chapters on trade in services. For his analysis, the author uses a comparative method, which is appropriate for this subject. Indeed, such RTAs have been created with WTO rules in mind, namely Article V of the GATS, and they contain rules that regulate trade in services, but only between RTA partners. Such rules are supposed to promote and facilitate trade in services between RTA partners – even more so than under the GATS.
The review of Natensis book is undertaken from the perspective of the rules on international trade in services and their influence on the autonomy of the national regulator. This aspect seems to be especially important in the field of trade in services, as international rules in this sphere can interfere with national regulations considerably more than rules on trade in goods: indeed, rules on trade in services are basically ‘behind the border measures’. This is why the issue of regulatory autonomy can become particularly delicate here.
Out of the broad sphere of trade liberalization under GATS and RTAs, the author's ocus is on the position and practice of the European Union. The author analyses three RTAs that were concluded by the EU in the recent years and that represent a ‘new generation’ of EU RTAs and include detailed chapters on trade in services. Moreover, the author chooses different types of RTAs, which are different in their goals and their scope: the Free Trade Agreements EU–SingaporeFootnote 2 and EU–Colombia & Peru,Footnote 3 as well as the Association Agreement EU–GeorgiaFootnote 4 that provides for a Deep and Comprehensive Free Trade Area (DCFTA). The latter is particularly interesting within the context of the book under review, as it provides for a regulatory approximation by Georgia to the EU acquis.
The task of the author was all the more challenging as there is not much case law on international trade in services. Indeed, whereas there are several important WTO panel and Appellate Body reports on GATS issues, as of now there have been no disputes under EU RTAs and, consequently, there are not yet any decisions that could be used for interpretation of RTA provisions on services.
The author of the present book conducts a systematic comparative analysis of different aspects of rules on international trade in services that are contained in the GATS and in the chosen RTAs, looking at the EU position under both GATS and RTAs from the perspective of regulatory autonomy. The author analyses the structure and the scope of the respective agreements, provisions on non-discrimination, market access, domestic regulation, transparency, and exceptions. On each issue, the author is consistent in assessing first the content of the respective provisions under GATS in general, then turning to concrete obligations of the EU under GATS, and then assessing the content of the respective RTA provisions and concrete EU obligations under each of the RTAs. Finally, the author assesses whether these RTAs constrain national regulatory autonomy beyond the GATS level. The author compares not only GATS and the RTA framework, but also different RTAs among each other and shows differences between them.
Below is a brief overview of the book with several discussion points.
Chapter 1 of the book is devoted to interpretation of the GATS and the selected EU RTAs. This analysis is not limited to issues of trade in services but equally concerns all other parts of EU RTAs. The author deals with the rules on interpretation contained in Articles 31 and 32 of the Vienna Convention on the Law of Treaties and comes to the key question about the meaning of WTO case law for interpretation of EU RTAs. The author recognizes that EU RTAs contain different provisions on interpretation (p.23). However, he submits that, in any case, irrespective of the type of these provisions, there should be a WTO-consistent interpretation if there is to be relevant WTO case law, unless there are good reasons to the contrary (p. 23). The author argues that there is a rebuttable presumption that RTA provisions shall be interpreted consistently with WTO case law interpretations (p. 24).
The author takes a decidedly WTO-friendly position, which is aimed at preventing, so far as possible, fragmentation of international trade law. Readers might, however, wish to see more arguments – especially counter-arguments for rebutting opposite positions. Indeed, several questions arise here: ‘In principle, adopted panel and Appellate Body reports are only binding on the parties to a particular dispute’,Footnote 5 and, stricto sensu, there is no formally recognized concept of precedent in the WTO,Footnote 6 And if WTO members do not (at least officially) recognize the precedential status of panel and Appellate Body reports in the WTO system, is it not too much to demand that these reports be followed by a legally distinct legal framework – that of RTAs? This question becomes particularly interesting in a case where a regional trade agreement does not provide for a clear norm prescribing consistency with relevant WTO interpretations. Further, if the author's position on a rebuttable presumption of WTO-consistent interpretation is followed, what are the consequences for the existence of the different formulas used for describing the relationship with WTO case law in different RTAs? Can these differences in formulation be ignored? In such a case, does this mean that these differences in formulations are useless?
In Chapter 2, the author shows parallels and differences in the structure of the GATS schedules and that of the EU RTA. He notes that, having initially followed a positive list approach in its RTA schedules of commitments, the EU used, for the first time, a negative list approach for its national treatment commitments on establishment in the EU–Georgia DCFTA (p. 55).
In Chapter 3, the author compares the scope of commitments under the GATS and the EU RTAs that differ in some aspects, most notably in their modes of supply, one of them being establishment that can be compared with GATS mode 3 but is wider in its scope (p. 90). Natens persuades in his evaluation of an important carve-out in several RTAs, i.e. ‘exercising of official authority’, which he sees as an extraordinary addition to the governmental authority exception in GATS (p. 96). As a result of his analysis, the author submits that it appears to be ‘a broader sibling to the governmental authority exception’ and ‘an important GATS–minus provision’, which leaves more room for regulatory autonomy (p.101).
The analysis of the non-discrimination obligations in Chapter 4 reveals that not all WTO requirements concerning RTAs contained in Article V of the GATS are followed by WTO members, e.g. there can be lack of notification or GATS-minus commitments (pp. 146–147). Somewhat surprisingly, there is no real discussion of this phenomenon: the author pragmatically describes the situation as it is, not really assessing it: ‘[T]he interpretation of the conditions [of Art. V] is not important, as their implementation is not stringent’ (p.147). True, this may be a real picture of the world, but, in our view, it would be interesting to hear the author's opinion on possible consequences of this practice of derogation from GATS requirements for eventual disputes brought within the WTO framework, even though, for pragmatic and political reasons, such RTAs are currently not being challenged. This opinion would be especially interesting in the context of the author's initial WTO-friendly position concerning the interpretation of RTAs (which, in his opinion, shall be interpreted in consistency with WTO case law).
Chapters 5–7 contain a detailed analysis of provisions on market access, domestic regulation, and transparency. The author shows that there are certain differences between GATS and RTAs as well as between RTAs, but they are not crucial.
Finally, Chapter 8 deals with exceptions in GATS and RTAs. The author concludes that, in general, GATS exceptions allow considerable regulatory autonomy, provided that there is no discrimination in application of these measures (p. 294) and submits that this remains relevant for the RTAs (p. 311).
The overall impression from the book is that it is a valuable study of the EU's current approach towards regulatory autonomy as reflected in its GATS and RTA obligations on trade in services. It contains a systematic and detailed analysis of the GATS and the selected EU RTAs, has a clear structure, and is easy to read.
As already mentioned, the author's approach is rather pragmatic. Although he recognizes certain weak points in the documents under consideration, he does not develop an extensive critique, but rather builds his analysis on the existing documents, explaining how these texts, imperfect but nevertheless real, might work in practice.
The book can be useful for a wide circle of potential readers. Indeed, on the one hand, the book contains a clear and concise explanation of the basic provisions of the GATS and can been used even in the initial stage of learning the principles of trade in services. On the other hand, it is a thought-provoking academic publication, based on the enormous amount of work of the author, who analyzed and compared numerous provisions of the selected EU RTAs. That by itself is already a valuable contribution to academic research on the topic.
The book can be recommended to specialists in international trade law and economics, both academics and practitioners, governmental officials dealing with international economic law issues, especially trade in services, as well as anybody interested in the regulation of international trade in services.
