Qatar Approves Accession to the Arab Trade in Services Agreement
Corporate Structuring / Qatar
Qatar has recently issued Decree No. 71 approving its accession to the Agreement on Liberalization of Trade in Services among Arab States (the Agreement), which aims to establish a free trade area in services among the Arab League member States.
Law Update: Issue 366 - Transport & Insurance Focus
Ahmed JaafirPartner, Head of Corporate Structuring - Qatar
Joyce Abi AbboudAssociate,Corporate Structuring
Sabeeha MoollaProfessional Support Lawyer,Corporate Structuring
Qatar has recently issued Decree No. 71 approving its accession to the Agreement on Liberalization of Trade in Services among Arab States (the Agreement), which aims to establish a free trade area in services among the Arab League member States. The Decree came into effect as of its date of issuance on December 11, 2023.
The Agreement is based on the principles and rules of the General Agreement on Trade in Services (GATS) annexed to the World Trade Organization (WTO) Agreement. The primary objective of the Agreement is to enhance the exchange of services across the Arab States by creating an active, conducive, developed and balanced environment that accommodates their diverse national policy objectives and varying levels of development.
Special consideration is given to the circumstances of the least developed Arab States, ensuring that the Agreement is inclusive and supportive of their economic growth and integration into the regional trade framework.
The Agreement covers all services in all sectors, except those supplied within the framework of exercising government authority, thereby excluding services supplied on a non-commercial basis. Furthermore, it applies to all measures affecting trade in services, whether in the form of laws, regulations, decisions, administrative actions, or any other form of legislation.
At its core, the Agreement establishes fundamental principles of equality and fairness between the member States and the service providers of each State; all of them extend equal and favorable treatment to one another, with a preferential treatment for the least developed Arab States.
Within this framework, member States commit to general obligations such as transparency, non-discrimination, liberalization, and mutual recognition. In this regard, each State shall insure that all general actions, whether carried out by its governmental or non-governmental entities, are implemented in an appropriate, objective and impartial manner, that does not form a restriction on trade in services.
The Agreement contains provisions on constitutional arrangements, dispute settlement and delineates other commitments aimed at promoting market access, ensuring unrestricted payments and international transfers (except for States facing balance of payments difficulties or the threat thereof), fostering continuous support and assistance among member States, facilitating network and public communication access, information exchange (with limitations on disclosing confidential information that could impact legitimate trade interests), and additional commitments, which are to be negotiated periodically among the parties.
Notwithstanding with all the commitments outlined, the Agreement does not prohibit any member State from implementing measures necessary to protect its public and religious morals, as well as the well-being of human, animal, and plant life and health. This includes ensuring compliance with laws and regulations that are not inconsistent with the Agreement, such as those aimed at preventing fraudulent and manipulative practices, safeguarding individual privacy and personal data, and maintaining security and public safety.
The Agreement is accompanied by annexes on natural persons movement, air transportation services, financial services, and communication services, which specify the scope, definitions, and supplementary provisions for these sectors.
Given the significance of the Agreement for Qatar’s economy, it is important for concerned parties to monitor the implementation of the Agreement and the specific commitments that Qatar will make under it, as well as to seek legal advice on the potential implications and risks of the Agreement for their business activities.
Qatar's accession to the Agreement is expected to enhance its economic integration into the Arab regional market and create new opportunities for its service suppliers, foreign and local investors and consumers. This move could definitely increase foreign investment inflows, develop innovation and efficiency in service sectors, and ultimately contribute to the long-term economic development and diversification of Qatar and the wider Arab region.
Foreign investors and service suppliers may enjoy more favorable conditions and fewer restrictions in terms of ownership, licensing, taxation, and other aspects of service supply. Moreover, foreign investors and service suppliers may benefit from the dispute settlement mechanism and the transparency obligations that the Agreement provides, which may enhance the legal certainty and predictability of the Qatari regulatory environment.
Qatar, as a WTO member and a party to the Greater Arab Free Trade Area (GAFTA), has already committed to liberalize its trade in goods and services at the multilateral and regional levels. However, by joining the Agreement, Qatar will benefit from the preferential treatment and the sector-specific rules that the Agreement offers, as well as from the cooperation and coordination among the Arab States in the services field.
Qatar's approval of its accession to the Agreement on Liberalization of Trade in Services among Arab States is a significant step towards strengthening its regional integration and diversifying its economy. The Agreement will create new opportunities and challenges for the Qatari and foreign service suppliers, as well as for the development of the services sector in the Arab region.
Al Tamimi & Company, as the leading law firm in the Middle East, has extensive experience and expertise in advising clients on trade and investment matters, including the Agreement and its annexes. Our team of lawyers can assist clients with navigating the legal and regulatory framework of the Agreement, assessing its impact on their current and future operations, and resolving any disputes that may arise under the Agreement.
For further information,please contact Ahmed Jaafir, Joyce Abi Abboud and Sabeeha Moolla .
Published in March 2024
