The document discusses the four modes of supply under the General Agreement on Trade in Services (GATS). Mode 1 is cross-border supply where services are delivered from one country to another without the supplier being present in the consumer's country. Mode 2 is consumption abroad where the consumer receives the service in another country. Mode 3 is commercial presence where a company supplies services through establishments in another country. Mode 4 refers to the presence of natural persons of a member country in another country's territory to supply a service.

2. FOUR MODES OF WTO
The General Agreement on Trade in Services (GATS) is a treaty of
the World Trade Organization (WTO) that entered into force in
January 1995 as a result of the Uruguay Round negotiations.
The treaty was created to extend the multilateral trading system to
service sector, in the same way the General Agreement on
Tariffs and Trade (GATT) provides such a system for
merchandise trade.
All members of the WTO are signatories to the GATS. The basic
WTO principle of most favoured nation (MFN) applies to GATS
as well. However, upon accession, Members may introduce
temporary exemptions to this rule.

3. HISTORICAL BACKGROUND
While the overall goal of GATS is to remove barriers to trade,
members are free to choose which sectors are to be
progressively "liberalised", i.e. marketised and privatised,
which mode of supply would apply to a particular sector,
and to what extent liberalisation will occur over a given
period of time.
Members' commitments are governed by a "ratchet effect",
meaning that commitments are one-way and are not to be
wound back once entered into.

4. FOUR MODES OF SUPPLY
Modes Criteria Supplier Presence
Service delivered within the territory of
Mode 1: Cross-border supply the Member, from the territory of another
Member
Service supplier not present within the
Service delivered outside the territory of territory of the member
the Member, in the territory of another
Mode 2: Consumption abroad
Member, to a service consumer of the
Member
Service delivered within the territory of
Mode 3: Commercial presence the Member, through the commercial
presence of the supplier
Service supplier present within the
territory of the Member
Service delivered within the territory of
Mode 4: Presence of a natural person the Member, with supplier present as a
natural person.

5. MODE 1 - CROSS BORDER TRADE
• Buying and Selling of goods and services between businesses
in different countries, with the seller being in one country and
the buyer in the other country
• Services through its telecommunications or postal infrastructure
• Supplies may include consultancy or market research reports,
tele-medical advice, distance training, or architectural drawings
• Mode 1 contributes to 35% of services trade internationally
• Measures affecting Mode 1 Trade:
- Commercial Presence Requirements, Residency Requirements,

6. MODE 1 - CROSS BORDER TRADE
India and France negotiations on declaration of Data Adequacy Status
• Create a trustworthy environment
• Avoid unnecessary barriers to cross-border information flows
• Interoperability of data becomes easier
• Smooth transfer of data without multiple safeguards
• The bilateral trade between India and France stood at over US $9.4
billion in 2012
• Uruguay and New Zealand added to the data adequacy list
 CBT in financial services
• Establishment of branches and subsidiaries in a host country benefit
consumers by contributing to more competitive and efficient markets
• Promotes economic growth and development.

7. MODE 2: CONSUMPTION ABROAD
Service delivered outside the territory of the Member, in the territory of another
Member, to a service consumer of the Member
In other words
Consumers or firms making use of a service in another country (e.g. tourism) is
officially “consumption abroad” (“mode 2”)
Supplier Presence - Service supplier not present within the territory of the member
This mode of supply requires that the consumer of services move abroad.

8. EDUCATION SERVICES AND CONSUMPTION ABROAD
Possible Barriers to Trade in Education in Mode 2:
Visa Requirements
Recognition of Prior Qualifications
Foreign Currency and Exchange Requirements
Quota on Numbers of International Students
Restrictions on Employment while Studying
Recognition of new qualification by other countries

9. MODE 3: COMMERCIAL PRESENCE
Services supplied by a service supplier of one Member, through commercial
presence, in the territory of any other Member
In other words
locally-established affiliate, subsidiary, or representative office of a
foreign-owned and — controlled company (e.g. Banks) is officially
“Commercial presence” (“mode 3”)
Supplier Presence - Service supplier is present within the territory of the member
through a subsidiary or representative.
This mode of supply does not require the consumer of services to move abroad.
Measured mainly through instruments like FDI, values of assets, etc.

10. MODE 4: THE PRESENCE/MOVEMENT OF
NATURAL PERSONS IN GATS
Relevant framework
• GATS’ main text: presence of natural persons
• GATS’ Annex :movement of natural persons
Description of Mode 4 in main text and annex
 Purpose of stay
 Fulfilling directly a service contract, whether as a service supplier (self-employed)
or as an employee
 Indirectly: Presence instrumental to supply of service: through commercial
presence or supply at a later stage
 Duration of stay
 Temporary: Rules regarding citizenship, migration, residence and permanent
employment are not covered

11. MODE 4 CATEGORIES IN STATISTICAL
FRAMEWORK?
Contractual service suppliers
– Self-employed (independent) service suppliers
– Employees of foreign service suppliers
Intra-corporate transferees and persons directly recruited by the foreign affiliate
Services sellers / Persons responsible for setting up commercial presence
Areas of uncertainty
• difference between employment and service contract
• what does constitute a service?
• many commitments currently focus on highly-skilled workers

12. THE SIZE OF MODE 4 TRADE?
• Small compared to total trade, and to other modes of trade in services
(is the most restricted)
• Importance varies across countries and sectors
• Mobility for skilled workers increasing and facilitated by special
programs
• Both developed and developing countries are traders where mode 4
can be involved

13. THANK YOU