The definition of services trade under the General Agreement on Trade in Services (GATS) is four-pronged, depending on the territorial presence of the supplier and the consumer at the time of the transaction. The four modes of supply are as follows:

Mode 1: Cross-border #

Definition: services supplied from the territory of one WTO Member into the territory of any other Member

Example: A user in country A receives services from abroad through its telecommunications or postal infrastructure.

Mode 2: Consumption abroad #

Definition: services supplied in the territory of one WTO Member to the service consumer of any other Member

Example: Nationals of country A have moved abroad as tourists, students, or patients to consume the respective services.

Mode 3: Commercial presence #

Definition: services supplied by a service supplier of one WTO Member, through commercial presence, in the territory of any other Member

Example: The service is provided within country A by a locally-established affiliate, subsidiary, or representative office of a foreign-owned and — controlled company (bank, hotel group, construction company, etc.).

Mode 4: Presence of natural persons #

Definition: services supplied by a service supplier of one WTO Member, through the presence of natural persons of a Member in the territory of any other Member

Example: A foreign national provides a service within country A as an independent supplier (e.g., consultant, health worker) or employee of a service supplier (e.g., a consultancy firm, hospital, construction company).

See also: 1.3 Definition of Services Trade and Modes of Supply