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Domestic Regulation Negotiations
In the context of World Trade Organization (WTO) General Agreement on Trade in Services (GATS) negotiations now underway, the WTO's "Working Party on Domestic Regulations" has produced a draft set of "disciplines" that would limit domestic regulation of all service sectors – from energy to health care to higher education to banking and more – not just specific service sectors countries chose to sign up to meet the other GATS rules. These new draft disciplines would allow challenge before WTO tribunals of nondiscriminatory domestic regulations – rules that treat domestic and foreign companies the same – including those that govern licenses and qualifications, as well as technical service standards.

The draft would allow challenges on numerous grounds, including reasonableness, relevance, transparency/necessity and lack of conformity with international standards. A panel of three trade lawyers at the WTO in Geneva would be empowered to judge if federal or state and local laws met these very subjective tests, without reference to any U.S. jurisprudence on the meaning of such terms, and if they ruled against domestic laws, the laws must be changed or eliminated or the U.S would face trade sanctions.


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