Market Access and National Treatment in China--Electronic Payment Services: An Illustration of the Structural and Interpretive Problems in GATS

AbstractTable of ContentsI. Introduction 655II. Background: China-Electronic Payment Services in Context 658A. The Dispute 658B. The Basics of GATS 6601. The drive for liberalization of trade in services 6602. The substance and structure of GATS commitments: disciplines and schedules 663C. Principles and Problems of Treaty Interpretation and WTO Jurisprudence 668III. The China-Electronic Payment Services Panel Report 670A. A Service Subsector Includes "All Services Essential," "All Means," and "All Business Models" 671B. The United States Did Not Meet the Evidentiary Burden to Show an Across-the-Board Sole-Supplier Requirement 674C. China Reserved the Right to Limit Market Access-Despite Its National Treatment Commitments 6791. The structural relationship between Articles XVI and XVII was previously uncertain 6792. China's withholding of market access means it need not extend national treatment 6803. The requirements actually imposed violated the (limited) commitments in China's schedule 682IV. Alternative Approaches to Reconciling Inconsistent Market Access and National Treatment Inscriptions 683A. Distinguish the Substantive Scope of Provisions from Rules for Interpreting Schedules 685B. Evaluate Rules for Consistency with the GATS Text and with Members' Expectations 6881. Rule 1: Entry in market access column prevails 6892. Rule 2: Entry in national treatment column prevails 6903. Less-liberalizing entry (Rule 3) or more-liberalizing entry (Rule 4) prevails 691C. Concede That No Rule Can Satisfy All Goals 691V. Looking Ahead: Recommendations for Future GATS Disputes and the International Trade in Services Agreement 693A. China-Electronic Payment Servicer. Problems and Possible Solutions 693B. The TISA: Finally Getting It Right? 694Appendix A: Excerpt of China's Schedule 698Appendix B: Schedule Interpretation Rules in Practice 700I. IntroductionIt is a precarious but possibly hopeful moment for multilateralism and global trade in services. In September 2013, a new Director-General, Roberto Azevedo, took the helm of the World Trade Organization (WTO).1 Azevedo has been candid about the stalled state of the Doha Round of trade negotiations2 and is committed to breathe new life into them:[l]t is clear that the system is in trouble.... [T]he perception in the world is that we have forgotten how to negotiate. The perception is ineffectiveness. The perception is paralysis. ... We must send a clear and unequivocal message to the world that the WTO can deliver multilateral trade deals.5One symptom-and, to some extent, cause-of the stalemate in multilateral WTO negotiations is the proliferation of alternative preferential trade agreements (PTAs)-regional PTAs, such as the United States-driven TransPacific Partnership (TPP)4 and Transatlantic Trade and Investment Partnership (TTIP),5 and bilateral PTAs, such as the U.S.-Colombia trade agreement.6 Frustration with the limited extent of trade liberalization under the General Agreement on Trade in Services (GATS)7 has also channeled the negotiating energy of a number of countries toward an alternative international Trade in Services Agreement (TISA).8But the TISA is still in early-stage negotiations. GATS is not yet in the rear view mirror, and perhaps it should not be. Is GATS-or the WTO's Dispute Setdement Mechanism-broken? Is GATS too internally inconsistent to ensure that Members' expectations and intentions are honored? Too limited in its commitments to satisfy the United States and certain other countries? …