1 Adlung, Rudolf and Roy, Martin (2005), ‘Turning Hills into Mountains? Current Commitments under the General Agreement on Trade in Services and Prospects for Change’, Journal of World Trade, 39(6): 1177 and 1181fCrossRefGoogle Scholar.

2 Similar reasons may explain the absence of studies discussing the scope, nature, and implications of ‘foggy’ commitments under the GATS.

3 See below note 33.

4 Appellate Body Report, United States – Measures Affecting the Supply of Cross-Border Gambling Services (US–Gambling), WT/DS285/AB/R, adopted 20 April 2005, and China – Measures Affecting Trading Rights and Distribution Services for Certain Publications and Audiovisual Products (China–Audiovisual Services), WT/DS363/AB/R, adopted 19 January 2010. The so-called W/120 is annexed to the Scheduling Guidelines, circulated as WTO document S/L/92 of 28 March 2001. See also below note 11.

5 WTO document WT/MIN(05)/DEC of 22 December 2005, Annex C, para. 1(f).

6 For a more detailed presentation of the Agreement's modal structure, see Adlung, Rudolf and Aaditya, Mattoo (2008), ‘The GATS’, in Mattoo, Aaditya, Stern, Robert M., and Zanini, Gianni (eds.), A Handbook on International Services Trade, Oxford: Oxford University Press, pp. 48–83Google Scholar.

7 Maurer, Andreas and Joscelyn Magdeleine (2012), ‘Measuring Trade in Services in Mode 4’, in Mia Mikic, Gloria Pasadilla, and Pierre Sauvé (eds.), Reforming Services for Inclusive and Sustainable Development of Asia and the Pacific, Asian Development Bank Institute and ARTNeT, Bangkok: United Nations.

8 This particular possibility existed only at the date of the Agreement's entry into force in 1995 or, for new Members, the date of acceptance. There are some further provisions in the GATS allowing for departures, in specified circumstances, from the Agreement's MFN obligation for which no equivalents exist under the GATT. See Adlung, Rudolf and Carzaniga, Antonia (2009), ‘MFN Exemptions under the General Agreement on Trade in Services: Grandfathers Striving for Immortality?’, Journal of International Economic Law, 12(2): 357–392CrossRefGoogle Scholar.

9 The Panel in US–Gambling, WT/DS285/R, adopted 20 April 2005, found that ‘[t]he ordinary meaning of the words, the context of Article XVI, as well as the object and purpose of the GATS confirm that the restrictions on market access that are covered by Article XVI are only those listed in paragraph 2 of this Article’ (para. 6.318). The Appellate Body did not review and pronounce on this finding.

10 WTO documents S/CSS/W/118 and Add.1 of 30 November 2001 and 16 April 2010.

11 This is also confirmed in the Scheduling Guidelines, WTO document S/L/92 of 28 March 2001, para. 11 (Annex table). A previous version of the Guidelines was circulated in documents MTN.GNS/W/164 and Add. 1 of 3 September and 30 November 1993, respectively. Both versions were adopted by Members. The Guidelines constitute supplementary means of interpretation within the meaning of Article 32 of the Vienna Convention, confirmed by the Appellate Body in para. 196 of US–Gambling. For a discussion of the legal status of the Guidelines, see Leroux, Eric H. (2007), ‘Eleven Years of GATS Case Law: What Have We Learned?’, Journal of International Economic Law, 10(4): 759–761CrossRefGoogle Scholar.

12 An Annex to the Scheduling Guidelines lists national treatment limitations that have been used particularly frequently, including discriminatory subsidies and tax measures, discriminatory fees and charges, nationality requirements, residency requirements, and the like.

13 The Guidelines further reiterate that ‘any discriminatory measure scheduled in the market access column is also to be regarded as scheduled under Article XVII and subject to the provisions of that Article’ (para. 18). The same provisions were already contained in an earlier version of the Guidelines, circulated in 1993 (see also above note 11). Nevertheless, it is not universally accepted that Article XVI also applies to quotas and similar measures that are employed on a non-discriminatory basis. See Mavroidis, Petros C. (2007), ‘Highway XVI Re-Visited: The Road from Non-Discrimination to Market Access in GATS’, World Trade Review, 6(1): 1–23CrossRefGoogle Scholar. A broader discussion of this issue is contained in De Meester, Bart (2010), ‘The Interaction between European and International Liberalisation of International Trade in Banking Services’, Dissertation, Katholieke Universiteit Leuven Faculteit Rechtsgeleerdheid, pp. 184–192.

14 See above note 11.

15 See para. 23 of document S/L/92 (Annex Table). The same recommendation was already contained in the Guidelines' earlier version of 1993.

16 See above note 4.

17 Appellate Body Report, European Communities – Customs Classification of Certain Computer Equipment (EC–Computer Equipment), WT/DS62AB/R, WT/DS67AB/R, and WT/DS68AB/R, adopted 22 June 1998; and Appellate Body Report, European Communities – Customs Classification of Frozen Boneless Chicken Cuts (EC–Chicken Cuts), WT/DS269/AB/R and WT/DS286/AB/R, adopted 27 September 2005.

18 In negative-list agreements, parties have to list existing non-conforming measures in a first annex. A second annex, more limited, contains reservations for any future non-conforming measures. For a discussion of differences between negative and positive list agreements in services, see, for example, Roy, Martin, Marchetti, Juan, and Lim, Hoe (2007), ‘Services Liberalization in the New Generation of Preferential Trade Agreements: How Much Further than the GATS?’, World Trade Review, 6(2): 155–192CrossRefGoogle Scholar; and Fink, Carsten and Molinuevo, Martin (2008), ‘East Asian Free Trade Agreements in Services: Key Architectural Features’, Journal of International Economic Law, 11(2): 263–311CrossRefGoogle Scholar.

19 In the words of Joseph Conrad (Victory: An Island Tale, 1915): ‘It is not the clear-sighted who lead the world. Great achievements are accomplished in a blessed, warm mental FOG …’

20 According to Gootiiz and Mattoo, Uruguay Round commitments are on average 2.3 times more restrictive than current policies ( Gootiiz, Batshur and Mattoo, Aaditya (2009), ‘Services in Doha – What's on the Table?’, Journal of World Trade, 43(5): 1013–1030CrossRefGoogle Scholar).

21 Berger, Axel, Matthias Busse, Peter Nunnenkamp, and Martin Roy (2010), ‘Do Trade and Investment Agreements Lead to More FDI? Accounting for Key Provisions Inside the Black Box’, WTO Staff Working Paper, ERSD-2010–13, September 2010. (Revised version to be published in International Economics and Economic Policy.) Comparing the (potential) effects of GATS with those of investment treaties is justified insofar as their coverage overlaps, keeping in mind the scope of mode 3 (commercial presence) of the GATS, which, in turn, accounts for the lion's share of trade under the Agreement (Section 2.1).

22 This is certainly true for positive-list agreements (GATS-type), but negative-list agreements (NAFTA-type) are not immune to FOG either. Reservations for future non-conforming measures, contained in a second Annex (see above note 18), are sometimes loosely worded and may also cause interpretation problems.

23 Such effects also complicate empirical studies that seek to compare Members' applied regimes with their GATS commitments (see Gootiiz and Mattoo, above note 20).

24 WTO document S/L/84 (‘Procedures for the Certification of Rectifications or Improvements to Schedules of Specific Commitments’) of 18 April 2000.

25 See WTO documents S/C/W/208, 216, 260, and 262 of 16 April 2002, 9 October 2002, 17 August 2005, and 26 August 2005, respectively.

26 A precise number cannot be provided, however, since it is not straightforward to establish for the newly acceded EU members which subsectors have been included as a result of their EU accession and which have been offered as a genuine contribution to the DDA.

27 Maurer and Magdeleine (above note 7).

28 For example, there are indications that some Members (mis-)interpreted the negotiating mandate on subsidies in Article XV to imply that, for the time being, these are exempt from the national-treatment disciplines of Article XVII and, thus, no respective limitations needed to be scheduled. (Article XV:1 reads: ‘Members recognize that, in certain circumstances, subsidies may have distortive effects on trade in services. Members shall enter in negotiations with a view to developing the necessary multilateral disciplines to avoid such trade-distortive effects’) Nevertheless, there is nothing in this Article nor elsewhere in the GATS to suggest that national treatment and other potentially relevant obligations, including the MFN requirement in Article II, are suspended for the duration of these negotiations. Rather, the Scheduling Guidelines (above note 4, para. 16) unequivocally clarify that ‘Article XVII applies to subsidies in the same way as it applies to all other measures’.

29 An intermediate solution could consist of a waiver, pursuant to Article IX:3 of the Marrakesh Agreement, that would extend the implementation date of a commitment for a specified period. However, this presupposes the existence of ‘exceptional circumstances’; and waivers granted for periods of more than one year are subject to annual review. The only waiver approved in a services-related case by November 2011 concerned the postponement of a phase-in commitment on international voice telephony by one year. It was granted to Albania in 2004 (WTO document WT/L/567, 7 June 2004).

30 For example, there are instances, though relatively rare, where certain sectoral commitments explicitly refer back to restrictions contained in the horizontal section (e.g., ‘none except for horizontal limitations’), while commitments in other sectors fail to do so. It is true that the Scheduling Guidelines, para. 36 (Annex table), provide that horizontal commitments apply to trade in all scheduled sectors unless otherwise specified, but this is of little guidance in such a situation.

31 Document W/120 contains various categories for which no classification numbers, whether CPC codes or others, are given. Such ‘other sectors’ exist under professional services, communication services (overall and specifically under telecommunication services and audiovisual services), distribution services, environmental services, financial services, health-related and social services, tourism and travel-related services, recreational cultural and sporting services, and transport services. Similar uncertainties may arise from the scheduling of CPC categories that themselves are defined as residuals. Cases in point are ‘other computer services n.e.c.’ (CPC 8499) and ‘other business services n.e.c. (CPC 87909) which are defined to include, respectively, ‘other computer services not elsewhere classified, e.g. training services’ and ‘services generally provided to businesses, not elsewhere classified’ (see Provisional Central Product Classification, UN Department of International Statistical and Social Affairs, Statistical Papers, Series M, No. 77, 1991).

32 The distinction in this paper between FOG and other scheduling flaws also explains why the shares of ‘foggy’ limitations in Figure 1 are lower than the percentage of ‘other’ measures provided by Adlung and Roy (above note 1). The latter category captured all entries under market access, mode 3, that could not be associated with any of the six types of limitations listed in Article XV:2.

33 See also the discussion in the Panel Report, Mexico – Measures Affecting Telecommunications Services (Mexico–Telecoms), WT/DS204/6, adopted 1 June 2004. In particular, the Panel refers to Article XX:1 which, in its view, ‘provides useful context’ for the interpretation of Article XVI:2 (para. 7.359). Article XX:1 states that ’ [e]ach Member shall set out in a schedule the specific commitments it undertakes under Part III of the Agreement. With respect to sectors where such commitments are undertaken, each schedule shall specify: (a) terms, limitations and conditions on market access.’

34 It should be noted that the possibility remains that any references to laws and regulations, whether specified or not, would be dismissed by a Panel or the Appellate Body in the light, for example, of Article XX:1 and the Scheduling Guidelines, para. 9 (‘With regard to market access limitations, such as numerical ceilings or economic needs tests, the entry should describe each measure concisely indicating the elements which make it inconsistent with Article XVI’. See Table A1).

35 The relevant provisions require each Member to ‘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 supplier of any other country’.

36 In the same vein, the national-treatment obligation in Article XVII:1 refers to the treatment ‘of services and service suppliers of any other Member’ which must not be less favourable than that accorded to a Member's own like services and service suppliers.

37 Panel Report, United States – Restrictions on Imports of Sugar (US–Sugar Imports), L/6514 − 36S/331, adopted on 22 June 1989, para. 5.7.

38 Appellate Body Report, United States – Tax Treatment for ‘Foreign Sales Corporations’, WT/DS108/AB/R, adopted 20 March 2000, footnote 124 to para. 111.

39 According to Adlung and Roy (above note 1), 18% of all entries under market access related to measures inconsistent with national treatment.

40 These figures are based on the subsectors as contained in the Services Sectoral Classification List (W/120), taking due account of the Annex on Financial Services, the Annex on Air Transport Services, and the Maritime Model Schedule. The group of original WTO Members with DDA covers the EU member States individually, except for those that have joined the WTO (and EU) since 1995, which are included among the recently acceded WTO Members.

41 The authors refrained from counting the various technical refinements that were explicitly identified as such in DDA offers since, for understandable reasons, Members were tempted to label as many changes as possible as improvements over existing commitments rather than as mere technical modifications.

42 See also above note 24.

43 The Committee was set up by the Council for Trade in Services in late 1995 with the mandate, inter alia, to: ‘(a) Oversee the implementation of specific commitments in all modes of supply… (b) Examine, at the request of Members, schedules of specific commitments and lists of exemptions from Article II of the GATS, particularly with a view to increasing technical accuracy and coherence in the future’. WTO document S/L/16 of 24 November 1995.