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Modes of Supply

Editor_NS
Trade in Services
The definition of services trade under the General Agreement on Trade in Services (GATS) is four-pronged, depending on the territorial presence of the supplier and the consumer at the time of the transaction.  The four modes of supply are as follows:

Mode 1:Cross-border

Definition: services supplied from the territory of one WTOMember into the territory of any other Member

Example: A user in country A receivesservices from abroad through its telecommunications or postalinfrastructure.  

Mode 2:Consumption abroad

Definition: services supplied in the territory of one WTOMember to the service consumer of any other Member

Example: Nationals of country A havemoved abroad as tourists, students, or patients to consume the respective services.

Mode 3:Commercial presence

Definition: services supplied by a service supplier of oneWTO Member, through commercial presence, in the territory of any otherMember  

Example: The service is provided within countryA by a locally-established affiliate, subsidiary, or representative office of aforeign-owned and — controlled company (bank, hotel group, constructioncompany, etc.).

Mode 4:Presence of natural persons

Definition: services supplied by a service supplier of oneWTO Member, through the presence of natural persons of a Member in theterritory of any other Member 

Example: A foreign nationalprovides a service within country A as an independent supplier (e.g.,consultant, health worker) or employee of a service supplier (e.g. consultancyfirm, hospital, construction company).


See also: https://www.wto.org/english/tratop_e/serv_e/cbt_course_e/c1s3p1_e.htm



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