Existing frameworks for how trade is facilitated between countries in this sector

The arrangements described in this section are examples of existing arrangements between countries. They should not be taken to represent the options being considered by the Government for the future economic relationship between the UK and the EU. The Government has been clear that it is seeking pragmatic and innovative solutions to issues related to the future deep and special partnership that we want with the EU.

The international baseline for trade in services, including among the tourism industry, is the WTO’s 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.

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 (eg. an inbound tourist);
3) where the company crosses a border (e.g. a retail chain opening a new establishment in another country); and
4) where the service provider moves

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.

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. Tourism commitments in GATS schedules are taken under the Sector of Tourism and Travel Related Services51 across all four modes of supply.

All of the EU’s existing third country trade deals, and those currently under development, look to build on the GATS baseline by expanding the commitments of EU Member States to open up their services markets to each other. The most ambitious of these is the EU-Canada Comprehensive Economic and Trade Agreement (CETA). Other plurilateral agreements also look to further liberalise the GATS baseline for trade in services. Although negotiations are currently on hold, the most comprehensive attempt so far is the proposed Trade in Services Agreement(TiSA) between 23 different parties.

The key piece of horizontal EU legislation in services is the Services Directive, which covers approximately half of the services sector, including tourism. The Services Directive provides that Member States cannot impose discriminatory, unnecessary or disproportionate requirements on services providers from other Member States However, there is a great deal of variation in national regulation across the EU and many barriers to the free movement of services still exist.