A range of preferential trade agreements and bilateral economic and trade arrangements exist between global trading partners. These agreements reduce and simplify the requirements for trade, providing benefits to exporters, manufacturers and consumers across the trading partners.
As noted above, real estate services are sparsely traded and consequently, it is the general provisions on services trade which provide the framework for trade in these services outside of the EU. The baseline for trade in services, including real estate services is the World Trade Organisation’s (WTO) General Agreement on Trade in Services (GATS). All WTO Members are parties to GATS which sets out general rules, principles and obligations as a framework for trade in services; plus a schedule of commitments which set out how open and non-discriminatory parties commit to be
across the service sectors covered.
The UK is a member of the WTO in its own right, but its current commitments are listed in wider EU schedules. The Department for International Trade is leading a process to create UK-only schedules – reflecting our current level of openness.
GATS also sets out ‘how’ parties will allow services to be traded and this is split into four principal ‘modes’:
1) where a product rather than a service supplier/consumer crosses a border;
2) where the consumer of the service crosses a border (e.g. an inbound tourist);
3) where the company crosses a border (e.g. a chain of estate agents opening a new establishment in another country); and
4) where the service provider moves (e.g. a chartered surveyor spends nine months working in her firm’s office in another country). Commitments taken by parties vary and parties can unilaterally choose to improve their GATS offers at any point (subject to a certification procedure) or lower the level of their commitments, but in order to do so they will be expected to offer compensatory concessions.