The comment below appears to be a significant admission that at least some of the grassroots concerns about GATS are relevant. The analysis is from the Government of British Columbia Ministry of Employment and Investment International Branch - GATS and Public Service Systems Discussion Paper, 02 April 2001. Keep in mind, New Zealand is not only in GATS, one of the strongest promoters of it is Kiwi ex-officio Mike Moore, currently CEO of the World Trade organistion that sponsors GATS (General Agreement on Trade in Services). The GATS is an important agreement since services represent anywhere from 60%-80% of the gross domestic product (GDP) of WTO member nations. The GATS also has a built-in agenda that requires on-going negotiations. Negotiations to broaden and deepen the GATS have been taking place since January 2000. There is no agreed-to completion date but typically such negotiations last for several years.

There is no definition for "services" in the agreement. It has often been said that a service is anything that cannot be dropped on your foot. It is hard to imagine a good that is not connected to a series of services. Obviously, each good contains labour services but often also requires a series of services in order to allow for use/consumption of that good. For example, computers have to be transported, distributed, advertised, sold, have software installed, provide education on software use, repaired and guaranteed. All of these services are essential to bring a good to market and to ensure that the good is sold and consumed. Many services have a strong public policy dimension to them, including health care, education, water treatment, tobacco advertising, alcohol distribution, electricity distribution, information services, among others. Knowing the importance of some of these services to Canadians, the federal government has given assurances that it will not negotiate the inclusion of "public" health, education and social services. In an effort to enhance trade in services, and to otherwise open up services markets, the GATS contains rules which "discipline" or restrict government action (measures).

The scope of the agreement is extraordinarily broad because it potentially covers everything that governments do which affect trade in services and, it potentially covers all levels of governments. Government measures include legislation and regulation as well as requirements, procedures, practices or other actions. WTO trade panels have recently ruled that government measures which cover goods, but which "affect" trade in services, are also covered by the GATS rules. WTO trade panels also ruled that measures designed to cover services, but which affect trade in goods, are covered by the General Agreement on Tariffs and Trade (GATT). This adds another layer of complexity for governments and their citizens when attempting to assess whether or not new measures will be trade consistent. The GATS is structured to include parallel but interrelated sets of rules. One set of rules is found in Part II "General Obligations and Disciplines". These rules apply to all service sectors unless they are explicitly excepted. This is known as the "top down" approach; and in principle, every service is covered unless explicitly exempted. Negotiations taking place at present are designed to "deepen" the existing obligations in this part of the GATS, that is, to increase the number of rules which apply to government measures.

Part III of the GATS contains an additional and more demanding set of rules that are "bottom-up", that is, these rules only apply to service sectors where governments make commitments. Negotiations are aimed at increasing the number of services that will be covered by this part of the GATS. Because the GATS already contains a top down set of rules in Part II, it is possible that such sensitive service sectors as health and education may already be covered by these rules. The federal government, as well as senior WTO services officials, have asserted that citizens and their governments need not be concerned that such vital services will be brought under WTO rules. They indicate that services provided "in the exercise of governmental authority" are excluded from the agreement. The GATS exclusion for services in the "exercise of governmental authority" is thus of critical importance. If health care, education or other critical and sensitive services are already covered by Part II GATS rules, then these rules could decrease government decision-making authority over these sectors. Similarly, where more stringent GATS provisions apply, it is important for governments to have complete confidence in the scope of any specific commitments they make in sensitive sectors. A major objective of the GATS is to facilitate international trade in services by ensuring an increasing number of service sectors are opened up to prospective service providers - whether these providers are public or private, for-profit or non-profit.

To date much of the discussion has focused on the need to protect those services which are "publicly" delivered. An alternative perspective characterizes the issue as requiring the protection of government decision-making authority in sensitive service sectors. What would happen, for example, if governments wanted to move into new areas of social service delivery, such as child care, and regulate in a manner that would increase the use of public and/or non-profit forms of child care? What would happen if a government decided to alter the delivery of health care and regulate in such a manner as to increase the use of public and/or non-profit service delivery?