Posted 27th May 2001

GATS, What Me Worry?

New Zealanders who remember Rogernomics would do well to be a aware of GATS. This is a snipped report of a seminar on the General Agreement on Trade in Services (GATS) held by the World Development Movement (WDM) on 29 March 2001. The seminar was attended by 40 participants from trade unions and non-governmental organisations. In addition, messages of support were received from a wide range of unions and professional bodies who weren't able to attend on the day. The objectives of the seminar were:

- to deepen our common understanding of GATS, exchanging experience across different disciplines and service sectors

- to set GATS in the context of the current trend towards liberalisation, privatisation and deregulation of public services

- to explore the implications of GATS for different service sectors, with a view to each organisation consulting their own membership on GATS

Although the seminar was organised by WDM, whose primary concern relates to the impact of GATS on developing countries, it was agreed that the seminar should concentrate much of its focus on the British context, so as to make use of the considerable expertise available on public sector experience in this country. The seminar was held under Chatham House rules; as a result this document presents a report of the day's proceedings without attributing comments to individuals.

WHAT IS GATS? A public opinion poll due to be published in a forthcoming Sunday newspaper claims that 12% of the British public have heard of GATS. However, given how little public debate there has been on GATS, people may have heard of the acronym but not understand the trade agreement that lies behind it. GATS is one of the 28 free trade agreements of the World Trade Organisation (WTO).

Although attempts to launch a new trade round at the WTO's Seattle Ministerial in November 1999 failed, GATS is part of the 'built-in' agenda agreed when the WTO was conceived in 1994. As with the Agreement on Agriculture, therefore, the WTO is already committed to further negotiations on it. The GATS 2000 negotiations were launched in February last year. As a result of these negotiations, the scope of GATS will expand. GATS is unique among WTO agreements in that it mandates WTO members to return to the negotiating table on a regular basis and expand their GATS commitments.

Under GATS, WTO members are committed to 'progressively liberalise' their service sectors. In this respect, as the WTO itself acknowledges, GATS goes far beyond other WTO agreements. In keeping with other WTO agreements, however, GATS can be enforced. The WTO is the only international body with the power to enforce liberalisation policies, which it does through the rulings of its disputes settlement panels. WTO rulings are binding on its member states, and the panels can authorise trade sanctions against members which are adjudged to be in contravention of WTO agreements.

Broad coverage GATS covers 160 service sectors in total, ranging from road building to water delivery, education, health care, telecommunications, tourism and insurance. Its main objective is twofold: to open those sectors which are closed and to remove barriers to further trade in those which are already open. As with other WTO agreements, the main beneficiaries of this process of liberalisation are multinational corporations, and it is no surprise to learn that they were behind GATS in the first place. In the words of David Hartridge, Director of the WTO's Services Division, "Without the enormous pressure generated by the American financial services sector, particularly companies like American Express and Citicorp, there would have been no services agreement." GATS identifies four different 'modes of supply' for trade in services:

1) cross-border supply: - where only the service itself crosses the border from one country into another (eg international telephone calls, internet services or telemedicine)

2) consumption abroad: - where individuals travel to another country to make use of a service there (eg tourists travelling abroad, or patients travelling to take advantage of health care provided in a foreign country)

3) commercial presence: - where a foreign company sets up a subsidiary or branch within another country (eg banks, water companies or transport companies setting up shop) in another country)

4) presence of natural persons: - where individuals travel to another country to provide a service there temporarily (eg nurses, software engineers or - as the WTO says - fashion models)

New Zealand has been caught sleeping once by the pro-corporate, ex-treasury, of-late-multi-millionaires like Fernyhough, Gibbs, Dean. To be ripped off as a nation twice would be the height of stupidity, which of course is no gurantee that it won't happen with people like `sell the lot' Prebble still in parliament and economic dry 84 labour Cabinet member Helen Clark now Prime Minister..