Concerns about GATS
On November 23 2001, Green Party members Brian Fewster and Geoff Forse questioned DTI Minister Patricia Hewitt about the government's support for extending of the World Trade Organisation's General Agreement on Trade in Services (GATS).
Although still not widely publicised, this agreement could end up giving more power to transnational corporations to override planning controls and force governments into privatising essential public utilities. Some of its provisions are disturbingly similar to those of the late unlamented Multilateral Agreement on Investment (MAI).
Brian and Geoff presented Ms Hewitt with a written set of concerns about GATS and a list of specific questions. Some of the concerns they raised are summarised below.
GATS WILL LIMIT GOVERNMENT AND LOCAL AUTHORITY REGULATORY POWERS
- The GATS agreement prevents governments from treating foreign service providers less well than their domestic counterparts. This prevents the protection of infant industries. It also restricts rules requiring companies to hire or train local staff and management, transfer technology, or use local suppliers.
- GATS also goes further, prohibiting some regulations even if they apply to domestic firms as well.
- Complex judgements about the appropriateness of domestic regulations in the services sector will pass from elected governments to WTO disputes panels.
GATS COMMITMENTS ARE DANGEROUSLY OPEN-ENDED
- Any restrictions governments may wish to introduce on environmental grounds such as limits on oil companies, on hazardous waste or water extraction – may expose them to challenge before a WTO disputes settlement panel as having introduced an unnecessary barrier to trade.
- As in all such cases, a country would also have to prove that its environmental regulations were the least possible restriction on competition.
- The mere prospect of being arraigned on these grounds may dissuade governments from introducing even the most positive environmental requirements, such as promoting renewable energy sources or restricting the use of nuclear power.
THE "PUBLIC SERVICE" EXEMPTION IS VAGUE AND SUBJECT TO CHALLENGE
- Public services are exempted from GATS rules only if they are "supplied neither on a commercial basis nor in competition with one or more service suppliers" (article 1.3b),
- The Government's plans for Public-Private Partnerships will bring in the private involvement that may put all our services under GATS rules.
THE BUSINESS ORGANISATIONS BEHIND GATS HAVE A PRIVATISING AGENDA
- The US Confederation of Service Industries (CSI) laments the fact that, up to now, "Health care services in many foreign countries have largely been the responsibility of the public sector, [making it] difficult for US private sector health care providers to market in foreign countries." With added assistance from new US Trade representative Robert Zoelick, the GATS negotiations could unlock the public health sector for US corporations.
- According to WDM and the Ecologist, the US is also using GATS to demand the opening up (i.e. privatisation) of higher and further education.
- The WTO Services Division is conducting a worldwide investigation to identify public policies that "discriminate" against foreign education providers.
- The European negotiating position calls for developing countries to "liberalise" their water sector as part of the new negotiations. The energy sector is also a target in the US negotiating position.
GATS WILL ALLOW PRIVATE FIRMS TO CHERRY-PICK PROFITABLE SERVICES
- GATS may outlaw cross-subsidisation of unprofitable publicly-owned post and telecommunications services.
- Government subsidy of public services could be interpreted as discrimination against foreign providers of similar services.
GATS IS DESIGNED TO BE IRREVERSIBLE
- Technically governments can reverse a decision to offer up a sector after three years. However, in order to do this they will have to offer the liberalisation of other sectors instead, and all other governments must be satisfied that they have been sufficiently compensated.
- Moreover, although governments can specify exemptions to the rules, those not foreseen at the time of signing cannot be added later. This has grave implications for democracy, since future governments will be tied into the policies of current ones.
A list of Questions was also given to Ms Hewitt.
- The disastrous Bolivian experiment in water privatisation could not have been reversed under GATS.
Ms Hewitt didn't accept that our concerns were valid, but promised to make a detailed response to the written questions and concerns presented to her. Others may wish to raise these concerns with Ms Hewitt and other MPs. The more pressure the better.
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