Public Services in EU Trade and Investment Agreements by Luigi F. Pedreschi

Author:Luigi F. Pedreschi
Language: eng
Format: epub
ISBN: 9789462653832
Publisher: T.M.C. Asser Press

5.2.1.3 Most-Favoured-Nation

Pure MFN disciplines feature sporadically in the EU’s agreements. It will be recalled that MFN requires each member to accord to services and service suppliers of any other member treatment no less favourable than it accords to like services and service suppliers of any other country. In essence: trade advantages given to one party must also be given to all other parties.26 The EU’s inconsistent use of this discipline indicates an intention to be selective with its most favourable treatment. In its services rules, MFN is used only sparingly. Of the AAs, it is only the EU-Mexico agreement whose version reads similarly to the versions found in the GATS and NAFTA.27 The discipline does feature in the EU-CARIFORUM agreement but with significant modifications. Its version distinguishes the obligations placed on either party. While the EU is required to accord the most favourable treatment given to any third country with whom it concludes an economic integration agreement, the CARIFORUM countries’ obligation only extends to favourable treatment given by an economic integration agreement with another ‘major trading economy.’28 Accordingly, the EU is subject to a stricter standard. The discipline is also subject to specified exceptions, which include agreements for the expansion of the internal market.29 Unsurprisingly, the principle receives more attention from the EU’s FTAs.30 While each FTA contains the main building blocks of MFN, they are tailored to suit the EU’s needs. For example, each FTA’s version of MFN exempts treatment accorded under a future recognition agreement for the certification of qualifications in specified sectors.

Pure MFN clauses relating to establishment are relatively rare in EU trade agreements.31 In its FTAs, an interesting evolution appears to be taking place. One of the earlier agreements, the EU-Korea, requires that foreign establishments receive no less favourable treatment than ‘like establishments and investors’.32 Conversely, later agreements swap this comparator for ‘like situations’.33 As noted above, this is a broader concept which does not carry the same meaning as the former. Additionally, we also see that the EU again tailors its provisions to incorporate specific discipline limitations, the most consistent of which covers international treaties relating to taxation or financial services .34

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