The GATS Four Modes

The GATS distinguishes between four modes of supplying services: cross-border trade, consumption abroad, commercial presence, and presence of natural persons. They have been defined as follows:

The Four Modes of Services Trade under GATS 

Mode 1: Cross-border supply 

Cross-border supply is defined to cover services flows from the territory of one Member into the territory of another Member

Example: Banking or architectural services transmitted via telecommunications or mail

Mode 2: Consumption abroad 

Consumption abroad refers to situations where a service consumer (e.g. tourist or patient) moves into another Member’s territory to obtain a service

Example : Various kinds of tourism activities

Mode 3: Commercial presence 

Commercial presence implies that a service supplier of one Member establishes a territorial presence, including through ownership or lease of premises, in another Member’s territory to provide a service

Example: Domestic subsidiaries of foreign insurance companies or hotel chains

Mode 4: Presence of a natural person 

Presence of natural persons consists of persons of one Member entering the territory of another Member to supply a service

Movement of skilled persons such as accountants, doctors or teachers

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  • Poonam

    It is GATS or GATTs- General Agreement on Trade and Tariffs?