(GATS). The GATS has many virtues. First, it explicitly includes cross-border trade as a mode of supplying services. Second, it provides a framework for countries to make specific commitments to maintain open trading conditions. These commitments, which must be negotiated, involve promises to grant market access (i.e. not impose any quotas or prohibitions) and national treatment (i.e. not to discriminate against foreign providers in any way). A full commitment from a country on market access and national treatment is a guarantee against most forms of protection – but not all, as we shall see below.

Specific commitments have additional value because several other GATS obligations apply to committed services. Examples are key elements of Art. VI on domestic regulations<sup>27</sup> , the Annex on Telecommunication Services<sup>28</sup> and others<sup>29</sup> . Furthermore, full specific commitments can lead to the exposure and the subsequent reduction of regulatory barriers because GATS commitments provide the basis to challenge regulations that are being used for protectionist purposes rather than to serve a legitimate objective.

Even though the GATS is the natural home for liberalizing commitments on cross-border trade, the existing framework is far from ideal. One problem is that Members have not yet arrived at a satisfactory decision regarding whether electronic delivery of services should always be treated as cross-border trade or in some situations be consider consumption abroad, i.e. GATS mode 2.<sup>30</sup> To eliminate any uncertainty, it would therefore be necessary to obtain commitments with respect to both modes 1 and 2.

A second problem is that since GATS commitments are undertaken according to a “positive list” approach for specified service activities only, it is not easy to ensure full coverage of a country’s export interests by the commitments undertaken by trading partners. Most GATS Members made sectoral commitments on the basis of the so-called GATS Services Sectoral Classification List (so-called W/120<sup>31</sup> ). This list of 12 broad service sector activities<sup>32</sup> prepared by the WTO Secretariat has independent subsectors that in most cases make numerical reference to the 1991 Provisional Central Product Classification (CPC)<sup>33</sup> . The CPC is both exhaustive and mutually exclusive<sup>34</sup> .

> 27  Art. VI 1: In sectors where specific commitments are undertaken, each Member shall ensure that all measures of general application affecting trade in services are administered in a reasonable, objective and impartial manner. New disciplines on domestic regulations are also likely to focus on areas where commitments have been made. The provisional disciplines under Article VI:5 hold only for service sectors and delivery modes where countries have scheduled trade commitments.

> 28  Para. 5 of the Annex on Telecommunication Services: Access to and use of Public Telecommunications Transport Networks and Services (a) Each Member shall ensure that any service supplier of any other Member is accorded access to and use of public telecommunications transport networks and services on reasonable and non-discriminatory terms and conditions, for the supply of a service included in its Schedule.

> 29  Article VIII Monopolies and Exclusive Service Suppliers 1. Each Member shall ensure that any monopoly supplier of a service in its territory does not, in the supply of the monopoly service in the relevant market, act in a manner inconsistent with that Member's obligations under Article II and specific commitments.

> 30

> For example, if a customer from the U.S. purchases a service from an Indian internet site, it is not obvious whether this should be treated as cross-border supply or consumption abroad. This classification issue is particularly relevant for financial and other regulation-intensive services because it has implications for determining the jurisdiction in which the transaction took place.

> 31  Named after the WTO document MTN.GNS/W/120 that contained this service classification.

> 32

> 1. Business; 2. Communication; 3. Construction and Engineering; 4. Distribution; 5. Education; 6. Environment; 7. Financial; 8. Health; 9. Tourism and Travel; 10. Recreation, Cultural, and Sporting; 11. Transport; 12. "Other".

> 33  The provisional CPC can be found in UN (1991). In a limited number of cases, the W 120 departs from the

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