Introduction
Described by a number of writers as one of the landmark achievements by World Trade organization, the General Agreements on Trade services (GATS) was hatched in Uruguay round of talks and its results came into force in 1995. The precipitating factor for GAT was the success of General Agreement on Tariffs and Trade (GATT) that sought to create an acceptable atmosphere for international trade. According to World Trade organization (2010), “creating a credible and reliable system of international trade rules; ensuring fair and equitable treatment of all participants (principle of non-discrimination); stimulating economic activity through guaranteed policy bindings; and promoting trade and development through progressive liberalization”. These are the factors that contributed to the initiation of GATs.
The provision of quality healthcare has been a hot topic for decades. Thus is because healthcare costs have continued to soar and the humanity is faced by ever complicated medical conditions. National health care expenses are projected to reach over $2.8 trillion and be over 16 percent of the gross domestic product (GDP) by 2011 according to the (Center for Disease Control and Prevention, CDCP, 2003), (Kaiser Family Foundation [KFF], 2007). This suggests that the overall cost of quality health care is beyond the reach of the average citizen. It is therefore necessary for the federal government to provide health care to all citizens who cannot afford it. The provision of medical related services will therefore continue to rise and thus calls for close corporation with other nations and countries. This paper aims at analyzing the effect of GAT on heath care services.
Discussion
GAT takes into consideration the “four models of supplying services which include cross-border trade, consumption abroad, commercial presence and presence of natural persons” WTO (2010).
Effects of GATs on Health Care Services
All the four modes presented above affects the provision on heat care services in different ways. This fact is buttressed by WTO (2010) in succinctly stating that “The agreement covers four different modes (modes 1-4 trade in services) all of which affect health”.
Cross border supply
The cross border supply involves services that are delivered to a member from another member. Services that form part of this category include banking, telecommunications, and international telephone calls (GATT Watchdog, 2001). The cross border supply in this context involves the exchange of medical service from a doctor to a patient through interactive media such as audio visual and data communication. This gives a patient the need chance to seek consultation services from doctors abroad just as this can be done with local doctors. According to WTO (2010), “typical examples include Internet consultation, diagnosis, treatment and medical education and this form of supply can bring care to under-served areas, but can be capital intensive and divert resources from other equally pressing needs.”
Consumption Abroad
Consumption abroad “refers to a situation in which a consumer obtains a service from another member’s territory by virtue of his or her physical movement” (WTO, 2010). The most instances under this category involve a patient or a tourist seeking the health care services and or enjoying leisure time in a member territory respectively. In the context of health care provision, consumption abroad refers to patients that seek medical services a broad or seek medical services while is travelling abroad. This has the capacity to generate foreign exchange but has a number of disadvantages such as putting strain on the available resources in instances where their services are subsidized.
Commercial presence
Commercial presence defines services delivered within the member’s territory via a commercial supplier with a territorial presence. According to WTO (2010), “Commercial presence implies that a service supplier of one Member establishes a territorial presence, including through ownership or lease of premises, in another Member’s territory to provide a service”. These services in most instances include subsidiaries of a foreign company or a branch of hotel chain (Organization for Economic Co-operation and Development, 2002). Within the context of healthcare provision, the foreign commercial presence defines the supply of medical services to another country through a commercial presence. Its effect comes along with both demerits and merits. WTO (2010) has expounded this point by stating that, “FDI can make new services available, contribute to driving up quality and create employment opportunities. On the downside, it can help create a two-tier health system and an internal brain-drain – and thus exacerbate inequity of health provision”.
The presence of natural persons
The presence of natural persons “consists of persons of one Member entering the territory of another Member to supply a service (e.g. accountants, doctors or teachers)” (WTO, 2010). The movement of natural persons from one country affects the health care services when the person is a doctor.
Summary
From the discussions projected, it remains a fact that all the four models of GATs affect the provision health care services all over the globe. While the opponents of GATs argue that limits the sovereignty of a state to adequately protect human health, the fact is that GATs rules has opened the world to and provided patients with a variety of choices.
Recommendations
The author portends that GATs rules should be enhanced to open up the globe for more trade and availability of choices without limit of the provider’s nationality. This is one critical way of enhancing trans-border trade and adopting technology in the provision of services.
References
Center for Disease Control and Prevention, CDCP (2003). The power of prevention. Web.
GATT Watchdog (2001). GATS: healthcare and you. Texas, TX: GATT Watchdog.
Kaiser Family Foundation. (2007). Trends in health care costs and spending. Web.
Organization for Economic Co-operation and Development (2002). GATS: the case for open services markets. New York, NY: OECD Publishing.
WTO (2010). GATS Facts and Fiction. Web.
WTO (2010). General Agreement on Trade in Services (GATS). Web.