The negotiations on trade in services shall be conducted with a view to promoting the economic growth of all trading partners and the development of developing and least-developed countries.

The General Agreement on Trade in Services (GATS) is among the World Trade Organization's most important agreements. The accord, which came into force in January 1995, is the first and only set of multilateral rules covering international trade in services. Ig has been negotiated by the Governments themselves, and it sets the framework within which firms and individuals can operate. The GATS has two part: the framework agreement containing the general rules and disciplines ; and the notional "schedules" which list individual countries' specific commitments on access to their domestic markets by foreign suppliers.

Each WTO Member lists in its national schedule those services for which it wishes to guarantee access to foreign suppliers. All commitments apply on a non-discriminatory basis to all other Members. There is complete freedom to choose which services to commit. In addition to the services committed, the schedules limit the degree to which foreign services providers can operate in the market. For example, a country making a commitment to allow foreign banks to operate in its territory may limit the number of banking licenses to be granted (a market access limitation). It might also fix a limit on the number of branches a foreign bank may open (a national treatment limitation).

The GATS covers all internationally-traded services with two exception : services provided to the public in the exercise of governmental authority, and , in the air transport sector, traffic rights and all services directly related to the exercise of traffic rights and all services directly related to the exercise of traffic rights. The GATS also defines four ways in which a service can be traded, known as "modes of supply"

Trade liberalization, and even economic growth, are not the ends in themselves. The ultimate aim of Government is to promote human welfare in the broadest sense, and trade policy is only one of many instruments Governments use in pursuing this goal. But trade policy is nevertheless very important, both in promoting growth and in preventing conflict. The building of the multilateral trading system over teh past 50 years has been one of the most remarkable achievements of international cooperation in history. The system is certainly imperfect, which is one of the reasons why periodic negotiations are necessary, but the world would be a far poorer and more dangerous place without it.

In January 2000, WTO Member Governments started a new round of negotiations to promote the progressive liberalization of trade in services. The GATS agreement specifically states that the negotiations "shall take place with a view to promoting the interests of all participants on a mutually advantageous basis" and "with due respect for national policy objectives and the level of development of individual Members". The pace and extent of these negotiations are set by the WTO's 140 Member Goverments themselves according to their different national policy priorities.

Recently, however, the negotiations and the GATS itself have become the subject of ill-informed and hostile criticism. Scare stories are invented and unquestioningly repeated, however implausible. It is claimed for example that the right to maintain public services and the power to enforce health and safty standards are under threat, though both are explicitly safeguarded under the GATS. How have serious people come to believe what is, on the face of it, out of the question? Why should any Government, let alone 140 Governments, agrees to allow themselves to be forced, or force each toher, to surrender of compromise powers which are important to them, and to all of us?

Decision-making in open societies presupposes informed public discussion. It must be based on fact rather than fiction. The purpose of this booklet is to contribute to this discussion and to a greater public understanding of the GATS by correcting statements made in some recent publication which we believe are misleading the public and undermining support for international economic cooperation. It must not be assumed that becuase we have disputed some allegations we accept that others are well-founded: these are merely examples.