On The Legal Issues Of Off-shoring Services In GATS

General Agreement To Services (GATS) achieved during the negotiation of Uruguay bout, as the first multi-lateral principle and rule to coordinate international service trade in the world, has great promoting and safeguarding influence on the development of global service trade. With more and more fierce international competition, most departments in service trade all need to carry out rigid management to GATS members. GATS has clearly committed members could execute management to those services provided within the frontier in order to realize their domestic policy target. However, GATS doesn't intend to influence domestic policy target of each country, it only intends to insure those members could manage each bylaw formed according to relevant services in a reasonable, objective and fair way. So this article mainly aims at those frame defectives and relevant problems during the coordination of off-shoring services by GATS, thus makes some systematic and deep study hoping to do some good to promote the development of service trade in our country.The whole article is divided into five chapters. The first chapter is a summary of offshore-outsourcing, the author explained its historical evolution and the developing trend of off-shoring services in the global international trade in two sections separately. The economic theory of outsourcing is that the firm, based on fully core competitive power of itself, in order to reduce cost, increase efficiency, will integrate and exploit the most excellent and professional resources outside. Outsourcing phenomenon came out in America in the last 60s earliest. The cross-border trade of commercial service, especially the called IT-enabled services, is one of the most fast developing fields in today's international trade. Although industrialized countries are the largest exporting countries of off-shoring services, most of those with the strongest developing trend at present are developing countries, the reason why this kind of phenomenon could appear mainly depends on the following elements: 1. the progress of information technology; 2. large quantity of cheap labors could be employed; 3. creation of commercial practice, etc. Off-shoring services make global labors be distributed more effectively and bring great economic benefits to many countries. But until now there are still a lot of problems remaining unsolved for the frame defective of itself. GATS allows each member to provide mode according to four types and make concrete commitments to different departments separately, in it mode 1 cross-border offer has the closest relationship with the offer of off-shoring services. However, GATS hasn't made concrete stipulations to service type they apply beyond the four types of modes and it also hasn't clearly indicated what kind of condition the exchange including service trade need to satisfy to apply the stipulation in GATS. The existence of these key problems will definitely cause dispute on applicable scope of GATS.Chapter 2 is about the division problem of mode 1 and mode 2 under the frame of GATS. In the four types of modes stipulated in GATS mentioned above, cross-border offer is the closest one to off-shoring services. But cross-border offer includes lots of service contents. This chapter mainly focuses on the ascription of those specific service departments as electronic transmission, financial service, IT and BPO to explain the division of the tow modes and the problems happening concretely. The biggest difference between mode 1 and 2 is: mode 1 provides service outside the border of the member while mode 2 provides offer inside its border. Electronic transmission obscures thus limit and when deciding the place of delivery, the objective existence of consumers is no longer a necessary material condition, which has caused the occurrence of uncertainty of applicable scope. Financial service, IT and BPO are the same. Therefore, if the host country wants to make commitments to this type of service in GATS and execute management, it should first make sure which kind of service offer mode it belongs to. For the above problem is caused by the frame defective of GATS and this can not be solved within a short time, the author thinks that before the reasonable mode comes into being, the best way is that each member could be able to assure to make the same or similar concrete commitments to mode 1 and 2. The law meaning to distinguish mode 1 and 2 is: 1. it could confirm judicial dominating problem of GATS members; 2. from division relationship between mode 1 and 2 to commitments of service open-up degree made by service departments.Chapter 3 is the application of GATS origin rule in off-shoring service. The author also explained the GATS stipulation problems caused by off-shoring service, cognizance standard of service origin and problems faced in two sections. For those service offering people (that is to say nationality) stipulated in off-shoring service contract may not be the actual service offering people, in addition, GATS allows each member to establish origin rule applicable to service trade independently based on its domestic policy, thus being unable to identify service offering people accurately will result in uncertainty of applying GATS of relevant departments. The author thinks if one wants to comply with basic theory of rule of origin for services, besides identifying the actual service offering people, they also have to make sure the source of input to service trade. If not, the preferential treatment enjoyed by developed and developing countries will be unbalanced and this will further do harm to benefits of vast developing countries. GATS allows each member to independently establish origin rules applicable to service trade, the self characteristic of service origin makes the identification of it more complicated and difficult than that of goods origin, therefore, by now various consideration and discussion of GATS have not been able to solve those law problems proper to international service trade completely. The author thinks: WTO should provide effective measures on this aspect as soon as possible, for each member government separately establish and execute different rule of origin for services is extremely not good to world trade after all and it will also bring new difficult problem to service suppliers.Chapter 4 is two kinds of commitments made by GATS to cross-border trade liberalization. This article provides two choices to guarantee cross-border trade liberalization in service industry-making targeted commitments to cross-border trade in IT and BPO service and making level commitments of cross-border trade liberalization in large scope of service departments, and carrying out more intensive analysis to the applying and advantages and disadvantages of the two commitments.Chapter 5 is present developing condition and law suggestion of off-shoring services in our country. With the new trend of continuous acceleration of global economy incorporation, it is a coexistence of opportunity and challenge to develop off-shoring service vigorously by our country. On challenge aspect: 1. there has great disparity between language and standardized management; 2. the improvement of management skill of middle rank is still in need. At the same time with facing challenge, we also have our advantages: our political situation is stable, so in recent years the economy could develop continuously and healthily. The storage of talents is very large and infrastructure is quite complete. Because the open-up departments in our country are quite few, level of liberalization is low, in addition, the beginning of developing off-shoring service is a bit late, there are lots of law leaks needed to be solved urgently. Such as: 1. lack of uniform legislation of service trade, mainly based on department law is prone to maintain unit benefits and neglect whole benefits. 2. legislation in some field has not been established, especially for those field that has been committed to be opened up but the legislation has not been done yet, one should make a whole arrangement to open-up degree and time to avoid out-of-order in legislation. We have make a great progress on establishing and developing legislation of service trade since China joined WTO, especially embroidering on the execution of national treatment and most-favored-nation treatment. According to the concrete rules of GATS and connecting with real condition of developing service trade of our country, the author has made a detailed analysis. On national treatment, according to the developing condition of our own service industry, we will adopt gradual attitude, authorize national treatment to foreign services and service offering people gradually. It is a way of doing complying with the principle of gradual liberalization by GATS; on the question of most-favorable-nation treatment (MSN), we should start with objective reality, making use of the principle of gradual taking part in by developing countries and advantageous conditions of several exceptions and exemptions of MFN principle by GATS to relieve the impact on our service industry by unconditional MFN principle.