Market Access

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Market Access

Summary of Market Access

The degree of participation in the domestic market that a nation allows to foreign suppliers. Tariffs, quotas, and similar protective devices are devices imposed to limit market access. (Main Author: William J. Miller)

Market Access and National Treatment in the General Agreement on Trade in Services

According to Geza Feketekuty:

“The General Agreement on Trade in Services (GATS) recognizes that trade in services can be hampered by either discriminatory regulatory requirements imposed only on foreign services or by restrictive regulations that are imposed on both domestic and foreign services. It confuses the issue, however, by transposing GATT concepts and terminology in ways that neither correspond clearly to their application in the GATT Agreement, nor clarify the intent of the commitments in the services context.

All quantitative limits on services or service providers are dealt with under the rubric of market access, regardless of whether such limits are being imposed on foreign services on a discriminatory basis or on both domestic and foreign services on a non-discriminatory basis. National treatment is defined in the traditional GATT way as the non-discriminatory application of domestic regulations to foreign services or service providers.

This means that quantitative limits placed on foreign services or service providers fall under both the market access and national treatment provisions. For an in-depth discussion see pp. 112-129, in Aaditya Mattoo, , “National Treatment in the GATS: Corner Stone or Pandora’s Box?” Journal of World Trade Law,. Also see pp. 2-4 in the paper by Patrick Low and Aaditya Mattoo, “Is there a better Way? Alternative Approaches Under the General Agreement on Trade in Services,” in this volume. Unlike the authors of that paper, I take the view that national treatment commitments are to be viewed as independent of market access commitments, except in so far as a discriminatory restraint listed under the market access column ipso facto also constitutes a limitation on national treatment under the scheduling convention under Article XX.

The difference in the two interpretations is likely due to a difference in the interpretation of the phrase “conditions and qualifications” in the following text of GATS Article XVII: “In the sectors inscribed in its Schedule, and subject to any conditions and qualifications set out therein, each Member shall accord services and service suppliers …” I interpret this language as requiring the explicit enumeration of an exception to national treatment in either the market access or national treatment column. I do not believe the entry of unbound in the market access column satisfies this requirement.

The drafters of the agreement realized that this overlap could create a potential source of confusion in the scheduling of commitments, by raising a question whether national commitments regarding the discriminatory application of quantitative regulatory controls should be entered as market access or as national treatment commitments in the schedules.

To avoid duplication and confusion, Article XX:2 of the GATS on the scheduling of commitments indicates that “measures inconsistent with both Articles XVI [on market access] and XVII [on national treatment] shall be inscribed in the column relating to Article XVI.” While this fix removes a potential confusion with respect to the scheduling of discriminatory quantitative restrictions, it introduces a discrepancy between the text of the provisions on market access and national treatment on the one hand, and the content of the market access and national treatment columns in the national schedules on the other hand. This difference between the Articles and the schedules has introduced a conceptual confusion on the relationship between market access and national treatment commitments. Some countries have wrongly assumed that national treatment commitments become operative only after they have made a commitment on market access.

The intermingling of commitments on discriminatory and nondiscriminatory barriers has the further effect of intermingling two laudatory, but separate goals – trade liberalization and domestic regulatory reform. Removing discriminatory regulation, whether in quantitative or qualitative form, is all about trade liberalization. Removing nondiscriminatory restraints on services is frequently an exercise in domestic regulatory reform. The use of nondiscriminatory quantitative restraints more often than not reflects a countryÂ’s approach to the regulation of activity in a services sector, and telling a country to eliminate such restraints is tantamount to saying it must reform its approach to the regulation of that sector.

The intermingling of commitments on discriminatory and nondiscriminatory quantitative restraints raises the hurdle for countries that are willing to tackle the liberalization of trade barriers or the reform of domestic regulation in a services sector, but not both simultaneously. It is tantamount to saying to countries that they have to liberalize trade and reform their domestic regulations on services simultaneously. While nothing in the agreement requires them to do both simultaneously, the organization of the schedule does not easily allow countries to highlight progress on either trade liberalization or domestic reform.

It is easy to see how a GATT mindset about traditional notions of market access and national treatment could lead to the current structure and terminology in the GATS. However, the net effect has been to create a great deal of confusion not only by businesses, but also by trade officials and other trade experts who are not thoroughly familiar with the details of the General Agreement on Trade in Services agreement. They naturally equate market access in services with the tariff bindings in the General Agreement on Trade and Tariffs (GATT), and national treatment in services with its counterpart in the GATT. They fail to grasp that market access in services potentially is a more far-reaching commitment, since it covers both discriminatory and non-discriminatory restraints on the production and sale of services; and that the deviations from national treatment in services are not as damning as they would be in a GATT context, since national treatment in many services equates to the complete absence of barriers to trade, and that it grants nondiscriminatory treatment not only to services but also to service providers.

To cure the problems with respect to market access and national treatment, the rule in Article XX should be reversed, and measures that impose quantitative limits on a discriminatory basis should be listed under the national treatment, rather than under the market access column of the schedule. This would allow countries to highlight progress on trade liberalization through the scheduling of commitments under the national treatment column, and to highlight progress on domestic regulatory reform though the scheduling of commitments under the market access column.

Ideally, the market access column would be relabeled as nondiscriminatory quantitative restrictions on services, and the sequencing of the two columns would be reversed, with the national treatment column preceding the column on nondiscriminatory quantitative restraints. In an ideal world, the two relevant provisions of the GATS would also be retitled and reversed. Making all these changes may prove too difficult, but at a minimum the scheduling convention in Article XX needs to be reversed.”

Market Access: Quantitative Restrictions in Goods and Services in International Economic Law

In international economic law, market access: quantitative restrictions in goods and services includes the following legal areas, with coverage in this world legal encyclopedia:

    li> Quotas and Import Licensing
  • Voluntary Export Restraints (VERs) and Orderly Marketing Arrangements (OMAs)
  • Export Restrictions
  • Quantitative Restrictions in Services
  • Counterfeiting and Piracy
  • Exhaustion of Rights and Parallel Importation in Intellectual Property
  • The Impact of Preferential Trade Agreements
  • Investment Barriers-to-Entry

Resources

See Also

  • Trade
  • Market
  • White Market
  • Financial Market
  • Trade Law
  • Competition Law

Resources

See Also

Further Reading

  • Feketekuty, Geza, International Trade in Services: An Overview and Blueprint for Negotiations. Cambridge, Mass: Ballinger, 1988.
  • Hoekman, Bernard and Patrick Messerlin, “Liberalizing Trade in Services: From Reciprocal Negotiations to Domestic Regulatory Reform”
  • Low, Patrick and Aaditya Mattoo, “Is there a better Way? Alternative Approaches Under the GATS,”
  • Nicolaidis, Kalypso and Joel P. Trachtman, “From Policed Regulation to Managed Recognition: Mapping the Boundary in GATS”,
  • Wilcox, Clair, A Charter for World Trade. New York: Macmillan, 1949.

Market Access and the GATT Policy Negotiations

In relation to the GATT Policy Negotiations, Christopher Mark (1993) provided the following explanation and/or definition of Market Access: The ability of foreign flnI1s to compete in a country’s markets for given products, reflecting the extent of formal trade barriers –including tariffs as well as nontariff barriers –and the government’s willingness to tolerate unimpeded foreign competition with domestic firms (seenational treatment).

Hierarchical Display of Market access

Trade > Trade policy > Trade policy

Market access

Concept of Market access

See the dictionary definition of Market access.

Characteristics of Market access

Resources

Translation of Market access

Thesaurus of Market access

Trade > Trade policy > Trade policy > Market access

See also

  • EIOPA
  • Trade outlet

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