Likeness Standards for Trade in Services: Comparison between the GATS and the International Investment Treaties

GATS regulates not only ‘services’ being traded but also ‘service suppliers’ due the intangibility of services. There is the practical interpretative relevance on the ‘supplier’ in the text of non-discrimination rules in the GATS related to the relationship between the service and the supplier with regard to ‘likeness’, for example, whether the services, the suppliers or both need to be alike in order to find a violation of non-discrimination principle. Among various approaches to resolve this problem, the merged test that requires weighing and balancing of the factors related to both services and the suppliers seems desirable. Meanwhile, the investment treaties have contained the standard of ‘like circumstances’ to decide the comparators. It has been interpreted as a broader concept which embraces all the surrounding situations to find proper comparators regarding the purpose of the non-discrimination principle. As the ‘like circumstances’ standard resembles the merged test, a number of examples of this comprehensive approach in the international investment arbitrations would suggest whether it can be a viable option for the GATS. Specifically, the ‘like services’ standard which sees the competitive relationship in the market parallels the ‘like circumstances’ standard which requires the comparators in the same business and economic sector. Moreover, the various factors such as different skills, and size of the company which should be taken into account regarding ‘like suppliers’ are also the element of the comprehensive ‘like circumstances’ standard considering overall economic circumstances. Even the different treatments based on rational policy objectives can be justified through this approach if there is a reasonable nexus with the rational policy and contractual regulatory regime.