Which articles in the GATS provide for the implementation of MFN?
The MFN obligation is one of the basic provisions of the GATS. It is contained in Article II:1 and states:
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.
What questions need to be answered to determine whether or not a measure violates the MFN treatment obligation?
There are three questions that require to be answered in order to define if or not, a measure encroaches upon the MFN treatment obligation of Article II (1) of the GATS these includes;
How are services or service suppliers determined to be, like services’ or like service suppliers’?
In determining if the services, or service suppliers involved are similar to services or ‘similar to suppliers’ services; it calls for an assessment of the nature and to which extent of the competition correlation between the services or suppliers’ service are concerned.
In EC — Bananas III, it was held, that Article XVII “is expected to offer not less satisfactory conditions for competition; notwithstanding if that is to be achieved by means of an application of formally matching or formally un-matching measures. Even if there is lack of similar language in Article II that does not… act as a justification for affording different regular meaning as per Article 31(1) of the Vienna Convention, that ‘treatment not less favorable’, and which are alike in both Articles II (1) and XVII”.
The treatment MFN is a general commitment which applies in all measures touching trade in services. It has been agreed that, specific measures that are inconsistent with the MFN onus, maybe maintained in principle, but not for more than ten years and are subject to review after every five years. Such procedures must thus, have been indicated in a list of MFN exclusions submitted.