Between a fifth and a quarter of all of world trade is accounted for by services, and even this number may be underestimated. Services include call centers, engineering, creation of software and apps, education, providing content for streaming services for entertainment, not to mention the ancillary services supporting goods trade – customs brokerage, logistics, air and marine transport, and express delivery. It is a very long list that is constantly growing. A solid start was made with the General Agreement on Trade in Services (GATS) to bring services into the rules of the world trading system. Then little else was agreed but for the JSI on Domestic Regulation of Services. Much remains to be done.

The global economy is in the midst of the Services Revolution, which is having as dramatic an effect on our work life and daily life as the Industrial Revolution 100–150 years ago. Services make the world go around, for consumers, businesses, and governments.

Just think of your daily routine. First thing in the morning, you wake up knowing that your family was safe because of the electronic security service that was monitoring everything while you slept, from the locks on your doors to the carbon monoxide in the garage. Then you probably check your e-mail, the football or cricket results, and the headlines from the Financial Times on your smartphone service. If you drive to work, you require car insurance; if you take the subway or bus, life insurance. On the way to the office, you stop at your favorite coffee bar for your breakfast. At the office, you put the box of that birthday tie return in the express delivery pick-up box. A quick check online of your bank balance. Then you place calls to everyone who left you voicemails overnight, using one of the international telecommunications services.

This chapter elaborates on the relationship between digital services and the GATS. First, the characteristics of the GATS are explained, including the recognised four modes to supply services, the specific commitments WTO Members have included in their Services Schedules and how this impacts the Members’ obligations under this agreement. Digital services are not explicitly referred to in the GATS, but through an analysis of the scope of the GATS, this chapter explains why measures that affect digital services trade are covered by the GATS. Moreover, electronic delivery of services fits within the four modes of supply as recognised within the GATS. The chapter also elaborates on the principle of technological neutrality and how it applies to the GATS. Finally, the chapter discusses the work that has been undertaken by WTO Members in the context of the Work Programme on Electronic Commerce, which was established in 1998. The lack of substantive progress in the context of this Work Programme illustrates the divergent positions of WTO Members on digital issues.