Trade in Services and investment (theory)

Trade in services and investment negotiations are, broadly speaking, about two key categories of commitments:

  1. the Market Access Commitment –the commitment to let each other’s services suppliers or investors have access to domestic service market and
  2. the National Treatment Commitment –the commitment to treat foreign services suppliers or investors no less favourably than one’s own service suppliers or investors.

Market Access: This implies that a Party may not impose on service suppliers or investors of the other Party certain types of quantitative restrictions that would limit access to its market, such as limitations on:

  1. The number of suppliers or services operations,
  2. The total value of transactions,
  3. The participantion of foreign capital by quantity.

National Treatment (NT): This implies that a Party may not discriminate agains the other Party’s service suppliers and investors in favour of its own domestic service suppliers or investors.

A typical type of discrimination would be to impose more restrictive conditions to a foreign supplier for the supply of a given service than to the Party’s own providers – for example, by limiting foreigners’ voting rights in an enterprise irrespective of their level of investment.

 

Source: Services and investment in EU trade deals, April 2016

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