The General Agreement on Trades in Services (GATS) is a multilateral framework of principles and rules for trade in services under the World Trade Organization (WTO). This dissertation aims to provide regulatory structure for Article XV of the GATS. GATS Article XV targets subsidies in service trades, but does not stipulate any detailed rules. Currently, GATS Article XV only contains guidelines for Members in future negotiations. Little progress has been made in those negotiations.
I propose a service subsidy definition based on the Agreement on Subsidies and Countervailing Measures (SCMA), with some adjustments to adapt rules applicable to trade in goods to service trades. With respect to the subsidy categorization system, I propose a hybrid mechanism for Members to consider. Traffic-light categorization under the SCMA and the Amber/Blue/Green Box System under the Agreement on Agriculture (AoA) are two existing categorization systems under the WTO. The hybrid system of categorization I propose aims to associate the advantages of the two existing systems for trade in goods, taking into account the four modes by which services are supplied across borders.
In the end, I do not propose to solve all of the problems in determining the appropriateness of countervailing duty procedures. The lack of available data is a key obstacle. However, I do propose several collection procedures based on the VAT/RST tax systems. The problem of collecting countervailing duties on service subsidies is not without a solution. I will identify the problems and suggest some models for a workable solution.
My research also indicates that WTO Members will need to give service subsidies greater attention as the Doha Round moves forward. I believe that effort can be successful and that WTO Members can create a more comprehensive legal system for the global market, including rules on service subsidie
