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International Transactions
with Services
4thCourse 2ndpart:a. Defnition;b. Classifcation.
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What is an international transaction?
Change in ownership of goods
Provision of services
Provision of labour
Provision of capital
Change in ownership of financial assets
INTERNATIONAL
Residents non!residents
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ITS Classification
1. Terry Clark identifed what crosses theborder:
contact-based services- people (producers orconsumers) cross
borders to enae in
transactions;vehicle-based services communications aredirected
into and out o! nations "ia radio#tele"ision and satellite
transmissions# wiresand$or other !acilitatin %"ehicles&';
asset-based services- where commercial ser"iceideas tied to
!orein direct in"estment crossborders to establish an operatin
plat!orm;object-based services# phsical obectsimprenated with
ser"ices mo"e into a nation.
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ITS Classification
2.) Gary Sampson & RichardSnape deree o! consumer-producer
interaction
Consumer doesnot mo"e
Consumer mo"es
*upplier does not
mo"e
+ ,
*upplier mo"es C D
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ITS Classification - GATS
Mode 1 cross-border trade / supply
the supply of a service from the territory ofone Member into the
territory of any otherMember
*ituations:
*er"ices embodied in a transportable medium(paper# computer
disette);
*er"ices transmitted throuh a tanible
support(transportation);
Diitied ser"ices transmitted throuh
telecommunication lins;
COUNTRY A COUNTRY BMode 1: service transactions
Consumer SupplierThe service crosses the border
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ITS Classification - GATS
Mode 2 consumption abroad /moement o! consumers - the supply of
aservice in the territory of a Member to the
service consumer of any other Member*ituations:
/ra"el;
*hip repair abroad (the propert o! the consumermo"es or is
situated abroad).
Mode 2: service transactions
ConsumerConsumer SupplierThe consumer goes abroad Service
COUNTRY A COUNTRY B
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ITS Classification - GATSMode " commercial presence the
supply of a service by a service supplier of oneMember, through
commercial presence in theterritory of any other Member
*ituations:
0uridical persons in the strict leal sense corporations# oint
"entures# partnerships#representati"e oces# branches;
/he %commercial presence3 entit must be owned orcontrolled b the
entit located in the home countr.
COUNTRY A COUNTRY B
Mode 3: service transactions
Consumer CompanyForeignDirect investment in country AService
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ITS Classification - GATSMode # presence o! natural persons
/
temporary presence the supply of a service bya service supplier
of a Member, through presenceof natural persons of a Member in the
territory ofany other Member
*ituations:
sel! emploed indi"iduals consultants# pro!essorsemploees.
Mode 4: service transactions
Mode 4: empo!ment
Service
firm
Natural
personTemporary employment
Consumerfrom A
Natural
person
Naturalperson
Servicesupply
Self-employed goes to country A
or employee sent by firm from B
COUNTRY A COUNTRY B
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Conse$uently% the concept o!international transactions 'ith
serices(
re!ers )*T *)+, to- cross-border trade% but +S* to.
- moement o! consumers
- arious !orms o! commercialpresence
- moement o! suppliers
ITS
