WTO ANALYTICAL INDEX
GATS – Article II (Practice)
1 ARTICLE II OF THE GENERAL AGREEMENT ON TRADE IN SERVICES ............... 1
1.1 Text of Article II ............................................................................................. 1
1.2 Scope ........................................................................................................... 1
1.2.1 Measures relating to judicial and administrative assistance ............................... 1
1.2.2 Electronic commerce .................................................................................... 2
1.3 Exemptions from Article II ............................................................................... 2
1.3.1 Annex on Article II Exemptions...................................................................... 2
1.3.2 Exemptions in financial services..................................................................... 2
1.3.3 Exemptions in maritime transport services ...................................................... 2
1.3.4 Exemptions in basic telecommunications ........................................................ 2
1.3.5 Least-developed-country (LDC) services waiver ............................................... 2
1 ARTICLE II OF THE GENERAL AGREEMENT ON TRADE IN SERVICES
1.1 Text of Article II
Article II
Most Favoured-Nation Treatment
1. With respect to any measure covered by this Agreement, each Member shall accord
immediately and unconditionally to services and service suppliers of any other Member
treatment no less favourable than that it accords to like services and service suppliers of
any other country.
2. A Member may maintain a measure inconsistent with paragraph 1 provided that such a
measure is listed in, and meets the conditions of, the Annex on Article II Exemptions.
3. The provisions of this Agreement shall not be so construed as to prevent any Member
from conferring or according advantages to adjacent countries in order to facilitate
exchanges limited to contiguous frontier zones of services that are both locally produced and
consumed.
1.2 Scope
1.2.1 Measures relating to judicial and administrative assistance
1. At its meeting of 1 March 1995, the Council for Trade in Services agreed to adopt the
following conclusion of the Sub-Committee on Services concerning measures relating to judicial and
administrative assistance: 1
"At the end of the Uruguay Round it had been agreed by participants that Article II of the GATS
(MFN) would not apply to measures relating to judicial and administrative assistance. This
agreement was reflected in document MTN.GNS/W/177/Rev.1/Add.1 which states:
'It is agreed by participants that the provisions of Article II (Most-Favoured
National Treatment) do not apply to measures relating to judicial and
administrative assistance. In the light of this agreement, the former
footnote to Article II has been deleted.'
The agreement was based on the view that discrimination between service suppliers of different
Members arising from judicial and administrative assistance measures, apart from what is already
stipulated by the provisions of the GATS, would not have any significant effect on conditions of
1
S/C/M/1, para. 14.
1
WTO ANALYTICAL INDEX
GATS – Article II (Practice)
competition between service suppliers. In the subsequent consultations it was agreed that the
same logic could be applied to the whole of the GATS and that therefore none of the provisions
of the GATS would apply to such measures." 2
1.2.2 Electronic commerce
2. With respect to the application of Article II to electronic commerce, see the Progress Report
adopted by the Council for Trade in Services in the context of the Work Programme on Electronic
Commerce on 19 July 1999. 3
1.3 Exemptions from Article II
1.3.1 Annex on Article II Exemptions
3. See the document on the Annex on Article II Exemptions (Practice).
1.3.2 Exemptions in financial services
4. With respect to exemptions from Article II of the General Agreement on Trade in Services
(GATS) concerning financial services, see the Fifth Protocol to the GATS 4, adopted by the Committee
on Trade in Financial Services on 14 November 1997. 5
1.3.3 Exemptions in maritime transport services
5. With respect to this issue, see the Decision on Maritime Transport Services adopted by the
Council for Trade in Services at its meeting of 28 June 1996, which suspends negotiations on
maritime transport services. The Decision further states that such negotiations will resume with "the
commencement of comprehensive negotiations on Services" and that Article II of the GATS will enter
into force with respect to "international shipping, auxiliary services and access to and use of port
facilities" when these negotiations have been concluded. 6
1.3.4 Exemptions in basic telecommunications
6. With respect to this issue, see the Fourth Protocol to the GATS, adopted by the Council for
Trade in Services at its meeting of 30 April 1996. 7
1.3.5 Least-developed-country (LDC) services waiver
7. On 17 December 2011, the 8th Ministerial Conference adopted a Decision allowing Members
to waive the provisions of Article II:1 of the GATS to allow the granting of preferential treatment to
services and service suppliers of least developed country Members. 8 Pursuant to that Decision,
24 notifications of preferences for LDC services and service suppliers have been submitted to the
Council for Trade in Services. 9 The Decision stipulates that notified preferential treatment with
respect to the application of measures other than those described in Article XVI of the GATS is
subject to approval by the Council. The Council approved all such preferential treatment at its
meetings on 2 November 2015 and 18 March 2016. 10
___
S/C/1, para. 6.
2
S/L/74, paras. 7-8.
3
4
S/L/45.
5
S/L/44.
6
S/L/24, para. 4.
7
S/L/19, para. 3.
8
WT/L/847.
9
S/C/N/792 and Rev.1; S/C/N/805; S/C/N/806; S/C/N/808; S/C/N/809; S/C/N/810; S/C/N/811;
S/C/N/812; S/C/N/813; S/C/N/819; S/C/N/820; S/C/N/821; S/C/N/824 and Rev.1; S/C/N/825; S/C/N/833;
S/C/N/834; S/C/N/835; S/C/N/839; S/C/N/840; S/C/N/841; S/C/N/853; S/C/N/857; S/C/N/860 and
S/C/N/890.
10
S/C/M/125 and 126, respectively.
2
WTO ANALYTICAL INDEX
GATS – Article II (Practice)
Current as of: July 2022
