The General Agreement on Trade in Services (GATS) and future GATS-Negotiations – Implications for Environmental Policy Makers

This report analyzes the General Agreement on Trade in Services (GATS) and its implications for environmental policy makers. It argues that the GATS, which functions as both a trade and investment agreement, may constrain the ability of national and sub-national governments to implement environmental regulations. The authors highlight risks associated with market access obligations, national treatment standards, and proposed disciplines on domestic regulation, while recommending the use of Sustainability Impact Assessments and the introduction of a broader environmental exception clause in the GATS text.

• The GATS possesses an extremely broad scope, applying to any measure that 'affects' trade in services. This means environmental regulations targeting goods can still fall under GATS scrutiny if they have an incidental effect on a service, potentially subjecting them to GATS disciplines.
• Market access obligations under Article XVI can prohibit quantitative restrictions that are essential environmental tools, such as limiting the number of service suppliers to preserve non-renewable resources or restricting tourism in sensitive areas to protect ecosystems.
• The national treatment principle (Article XVII) may constrain environmental policy if 'like' services are defined without considering their environmental impact. This could prevent governments from treating sustainable service providers more favorably than those using environmentally destructive technologies.
• Proposed disciplines on 'domestic regulation' under Article VI.4 could introduce a 'necessity test,' allowing WTO tribunals to determine if a domestic environmental regulation is the 'least trade restrictive possible' to achieve its goal, thereby undermining sovereign regulatory prerogatives.
• The GATS environmental exception in Article XIV is significantly narrower than the GATT's Article XX. Specifically, it lacks a provision for the 'conservation of exhaustible natural resources,' leaving regulators with fewer legal safeguards to justify environmental measures.
• There is a critical need for Sustainability Impact Assessments (SIAs) to be conducted in parallel with GATS negotiations. These assessments should evaluate the social and environmental consequences of the GATS to date and guide future sustainable trade and investment agreements.
• The report recommends that 'public services'—including water, energy, transport, and health—be generally excluded from the GATS to ensure government autonomy in regulating these essential sectors.
• Environmental subsidies are a key policy tool, but current GATS national treatment obligations and potential future disciplines on 'trade-distorting' subsidies could limit the ability of members to grant financial incentives for environmentally sound techniques.
• Government procurement is a vital tool for promoting environmental quality and sustainable production methods (PPMs), but the plurilateral Agreement on Government Procurement (GPA) may prohibit 'affirmative purchasing' based on a supplier's overall environmental performance.

APA

Fuchs, P., & Tuerk, E. (2001). The General Agreement on Trade in Services (GATS) and future GATS-Negotiations – Implications for Environmental Policy Makers. Center for International Environmental Law. https://www.ciel.org/wp-content/uploads/2015/03/GATS_Implications_Nov02.pdf

Chicago

Fuchs, Peter, and Elisabeth Tuerk. The General Agreement on Trade in Services (GATS) and future GATS-Negotiations – Implications for Environmental Policy Makers. Center for International Environmental Law, 2001. https://www.ciel.org/wp-content/uploads/2015/03/GATS_Implications_Nov02.pdf.

Wikipedia

{{cite report |last1=Fuchs |first1=Peter |last2=Tuerk |first2=Elisabeth |title=The General Agreement on Trade in Services (GATS) and future GATS-Negotiations – Implications for Environmental Policy Makers |publisher=Center for International Environmental Law |date=December 2001 |url=https://www.ciel.org/wp-content/uploads/2015/03/GATS_Implications_Nov02.pdf |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{fuchs2001general, author = {Fuchs, Peter and Tuerk, Elisabeth}, title = {{The General Agreement on Trade in Services (GATS) and future GATS-Negotiations – Implications for Environmental Policy Makers}}, institution = {Center for International Environmental Law}, year = {2001}, month = dec, url = {https://www.ciel.org/wp-content/uploads/2015/03/GATS_Implications_Nov02.pdf}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }