|Doha round negotiations under GATS Article VI:4 are mandated to develop necessary disciplines to ensure that measures relating to licensing requirements and procedures, technical standards, and qualification requirements and procedures do not constitute unnecessary barriers to trade in services. The fourth and current version of a draft text was circulated in January 2008. With its offensive interests in services, India has been active in these negotiations and has sought to protect its right to regulate services for legitimate reasons while at the same time seeking disciplines on the domestic regulations of its trading partners that act as disguised trade restrictions to committed market access in services.
These negotiations have systemic importance in so far as their outcome could potentially result in a re-balancing of the relationship between market access (Article XVI) and domestic regulation under the GATS. The primary issue under discussion involves the appropriate balance between the right to regulate and the new disciplines that are crafted. The draft text, though still lacking consensus, contains ambiguous language that might have such systemic impact. Negotiators thus need to proceed with the utmost caution. They must understand the GATS system-wide implications of the negotiations and evaluate the text under discussion from the perspective of how it might be interpreted in future WTO disputes before the Appellate Body.
The issue acquires greater significance after the Appellate Body decision in the Gambling dispute. In this dispute, the Appellate Body found that US laws prohibiting supply of gambling and betting services by suppliers located outside the United States to consumers within the United States amounted to a WTO inconsistent �quantitative� restriction in violation of US scheduled market access commitments under GATS Article XVI. While the United States seemed to have made a scheduling error in not expressly excluding gambling services from its commitments under the residual head of �other recreational services�, this dispute raised concerns in the literature that the Appellate Body erred in not recognizing the US measure as a �qualitative� regulation under GATS Article VI.
After the Gambling ruling, negotiators must consider whether the new disciplines on domestic regulations might not have the unintended(?) consequence of shifting the present balance in the GATS between domestic regulations and market access. There are provisions in the new draft text which if applicable during the Gambling dispute might well have resulted in a different outcome. Specifically, these include paragraph 3 (in the January 2008 draft) which without qualification recognizes the right of Members to regulate and to introduce new regulations to meet �national policy objectives�. Though the critical right to regulate is already recognized in the GATS preamble, its inclusion in this format in new rules might have far-reaching consequences, if a dispute settlement panel or the Appellate Body were to find in such provision, a need for deference to national policy objectives even when these do not relate to competence to provide the service or to maintaining the quality of the service. The draft text�s unclear treatment of the relationship between the new disciplines and Members GATS schedules is another cause for concern. In the Gambling decision, the Appellate Body left open the question as to where �in the abstract� GATS Article XVI drew the line between qualitative and quantitative measures. Similarly, it did not decide the question of the relationship between the first and second paragraph of Article XVI which is also germane to this issue. The new disciplines under negotiation would influence the future evolution of GATS jurisprudence on the scope of the right to regulate a service once market access commitments are scheduled. And negotiators must pay attention.