In 2005, the WTO Appellate Body ruled that the United States' total prohibition on cross-border gambling services was unlawful under the General Agreement on Trade in Services (GATS). The questions raised by the case — whether and how a government could block the supply of services on moral or public order grounds — went to the heart of key controversies surrounding international economic law. How can a liberal system of international trade in services be reconciled with national governments' desire to protect social values through service regulation? How much regulatory sovereignty are the WT ... More

In 2005, the WTO Appellate Body ruled that the United States' total prohibition on cross-border gambling services was unlawful under the General Agreement on Trade in Services (GATS). The questions raised by the case — whether and how a government could block the supply of services on moral or public order grounds — went to the heart of key controversies surrounding international economic law. How can a liberal system of international trade in services be reconciled with national governments' desire to protect social values through service regulation? How much regulatory sovereignty are the WTO Members willing to transfer to the WTO? How much regulatory diversity can the international trading system withstand? This book provides a comprehensive analysis of the regulation of services under the GATS. Through a thorough examination of the GATS negotiating history, substantive provisions, judicial interpretation, and ongoing domestic reforms, the book presents a clear picture of how the multilateral trading system justifies and tolerates regulatory diversity in services. In this respect, the book focuses on the core general principles of necessity and transparency, which would allow the assessment of the consistency with the GATS of domestic regulations in services at a horizontal, cross-sectoral level. In addition, the book reviews with a critical eye the ongoing GATS negotiations on the creation of rules on domestic regulations.