Towards a Necessity Test for Services : A Little Less Conversation, a Little More Action, Please!

A necessity test is a tool that reflects the balance between two potentially conflicting interests or challenges - the one being primarily domestic in nature, the other more international or multilateral in character. The domestic challenge stems from each country's prerogative to regulate in its own jurisdiction, while the international challenge relates to the aim to promote the progressive liberalization of trade in services. Experience gained in goods trade indicates that the principle of necessity can be a useful proxy allowing WTO adjudicating bodies to draw the dividing line between legitimate regulation and protectionist abuse. This paper explores the possibility of creating a necessity test that would be applicable to all service sectors. Such a horizontal test may yet emerge from the ongoing negotiations within the Working Party on Domestic Regulation (WPDR), which aim to fulfil the legal mandate contained in Article VI:4 GATS