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Limiting the meaning of ‘restriction’ to only DIRECT governmental limitations is necessary – Otherwise the topic become un-managable



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Limiting the meaning of ‘restriction’ to only DIRECT governmental limitations is necessary – Otherwise the topic become un-managable


TWN (Third World Network) February 2010 “WTO claims financial crisis not due to GATS” http://www.twnside.org.sg/title2/wto.info/2010/twninfo100204.htm
Permissible measures depend on the definition to be given to the term "restriction" contained in GATS Article XI, which, however, is not further specified in the Agreement. In that regard, it is worth noting that the IMF distinguishes between restrictions on payments and transfers - including exchange restrictions - from the underlying transaction on the basis of a technical criterion: "The guiding principle in ascertaining whether a measure is a restriction on payments and transfers for current transactions under Article VIII, Section 2 [of the Fund's Articles of Agreement], is whether it involves a direct governmental limitation on the availability or use of exchange as such." The Fund therefore identifies these restrictions by this technical criterion, rather than by the purposes or economic effects of the restrictions, which would be the way to identify trade restrictions only. If no such technical criterion were used, it would be almost impossible to distinguish between trade and exchange restrictions, as both may be used to achieve the same purposes and have the same economic effect.



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