General Agreement on Trade in Services (GATS) is an agreement of World Trade Organization (WTO). The agremeent was established to expand the scope of regulation of multilateral trade systems to service fields, not just trade in goods before. The principles in this agreement are mandatorily applied to all members of WTO. GATS prescribed a set of common regulations that all member states must adhere to, including Most Favoured National (MNF).
This is a basic principle of WTO based on the commitment that one country gives to the partner the most profitable incentives that it is and will give to other countries.
In accordance with the GATS, WTO members must treat service suppliers from other member states in the same way. Each member must immediately and unconditionally intended for services and service suppliers of any member, treatment no less favorable than the treatment it provide for the services and the same service suppliers of any other country.
However, MNF principle has the following exceptions.
- Under the individual commitments in WTO: this is the case where the country has successful in negotiation for the fulfillment of this obligation in certain services or particular cases of years.
- Under the Regional Agreement or Free Trade Agreement: commitments in these Acts are prioritized apply and therefore member that apply these agreements maybe entitled to each other higher treatment than WTO member not participating in this agreement.
