Market Access and National Treatment in China--Electronic Payment Services: An Illustration of the Structural and Interpretive Problems in GATS

The General Agreement on Trade in Services (GATS) has proved to be a less effective and more problematic instrument than hoped for at its enactment nearly twenty years ago. A recent case brought by the United States, China-Electronic Payment Services, illustrates a number of the problems, such as the uncertain definition and scope of sectors listed in Members\u27 schedules of liberalization commitments. The Panel Report also shows the unique challenges of crafting a test and setting an evidentiary burden for establishing a state-driven monopoly when the industry has natural-monopoly characteristics-which are typical of many tradable services like telecommunications and payment processing networks. Further, this Panel was the first to deal with the complication of overlapping yet seemingly contradictory market access and national treatment commitments in a particular subsector. In this case, for electronic payment services, China appeared to commit to provide treatment no less favorable than that extended to domestic suppliers, yet at the same time reserved the right to deny foreign suppliers access to the Chinese market. Which inscription governs, given that GATS itself provides no clear rule for interpreting such a schedule? The Panel concluded that the denial of market access trumped the granting of national treatment, an outcome that may be reasonable in this particular context but which lacks a firm basis in the GATS text. This Comment argues that the confusion about scheduling of market access and national treatment commitments is symptomatic of deeper ambiguity about the scope of the disciplines themselves. This Comment explores of the implications of four different interpretive rules in eight different scheduling scenarios, extending the existing literature by more fully defining and evaluating the rules and applying them to a broader range of situations. Ultimately, no one rule can be consistent with the text of GATS and with the expectations of both the scheduling Member and its trading partners. To resolve this problem, this Comment advocates a pragmatic, empirical, harm- or surprise-minimizing approach aimed at approximating the common intention of Members. Finally, this Comment considers the lessons of China- Electronic Payment Services for the nascent negotiations on a new international trade in services agreement (TISA)