Posted
27th July 2001
$ervices With A $mile?
by
Aziz Choudry of GATT Watchdog
June 26 2001 government document (photo shows NZ Government
Cabinet, complete with smiles alround) submitted to the WTO
Council for Trade in Services states: "First, and foremost,
New Zealand will actively encourage Members to explore ways
in which existing commitments in all services sectors, in terms
of both market access and national treatment, can be progressively
liberalised." This implies the government is prepared to offer
all services - including all education, health, and water services.
Over 260 British MPs are calling for an independent assessment
of GATS' likely impact on basic services in the UK and internationally.
It is high time New Zealand politicians - and all of us - awoke
to the dangers of this agreement. Anti-globalisation activists
have another international agreement in their sights.
The
World Trade Organisation is worried. It fears that the growing
campaign against GATS - the General Agreement on Trade in Services
- which took effect in 1995 under the WTO's umbrella - could
become as huge as the one that helped sink the Multilateral
Agreement on Investment. Negotiations are now underway to extend
GATS, which is more about promoting the rights of foreign investors
than a 'trade' agreement. A recently released New Zealand government
document indicates that it is leaping further into this almost
without reservation. The WTO calls GATS "the world's first multilateral
agreement on investment since it covers not just cross border
trade but every possible means of supplying a service, including
the right to set up a commercial presence in the export market".
Under GATS, governments agree to open the economy to foreign
suppliers of certain services. In those services, foreign suppliers
must be given at least as favourable treatment as it gives to
local suppliers. Governments cannot set limits on the numbers
of service suppliers operating in its market or impose requirements
for local content. Still reeling from Seattle, some see GATS
as a litmus test of the WTO's ability to function. Services
have been described as anything that you cannot drop on your
foot, including banks, schools, energy, healthcare, water, rubbish
collection, libraries, railways, airlines, TV and radio.
In 1999 the international trade in services was worth $1.35
trillion. They are big business, comprising between half and
three quarters of all economic activity in richer and poorer
countries. They are a lucrative market which the world's transnational
corporations through industry lobby groups want to control.
They want services to be treated purely as commodities to be
bought and sold in a competitive market. According to the European
Commission, "GATS is not just something which exists between
governments. It is first and foremost an instrument for the
benefit of business". David Hartridge, Director of the WTO's
Services Division says: "without the enormous pressure generated
by the American financial services sector there would have been
no services agreement". Besides seeking to extend the range
of services each government has committed, pressure is on to
impose 'disciplines' on the domestic regulation of services,
and to bring services that are publicly owned and/or 'procured'
by government agencies under GATS rules.
GATS
threatens to restrict a government's ability to ensure access
to affordable, adequate basic services for all its citizens
by removing any restrictions and internal government regulations
in the area of service delivery considered to be "barriers to
trade". These include measures which pursue environmental, social
or community objectives. It restricts core areas of government
planning. All WTO member governments are required to make enforceable
commitments to open their services markets. It binds local governments.
This includes their regional economic development role of supporting
community initiatives in ways that give preference to local
hiring or purchasing.
The
rights of foreign suppliers against a government deemed to have
broken GATS rules are enforceable and make backtracking on commitments
almost unthinkable. In 1999 Bolivia privatised Cochabamba's
city water system under World Bank instructions. It was sold
to a consortium led by International Water Ltd. which sharply
increased water prices - in some cases by over 100%. Poor households
were spending one third of their income on water. The crippling
price rise sparked mass protests and a general strike. After
troops killed six demonstrators, the government finally backed
down and reversed the privatisation. Had Bolivia made GATS commitments
under water delivery, regaining ownership would have been almost
impossible. New Zealand has one of the most wide-ranging GATS
commitments of any WTO member. Most public services have been
commercialised and privatised.
Our
public education and health systems have become commercialised
and open to private sector competition, and under GATS risk
being locked open to commercial competition from other WTO members.
Plans to introduce local content quotas in free-to-air broadcasting
have been stalled because they would breach the GATS promise
not to limit the market available to foreign suppliers, and
not to discriminate in favour of our own. The Labour/Alliance
government claims to believe that unregulated market forces
cannot be left to rule. Yet it seems as zealously committed
to free trade and investment as previous governments. If regulations
are considered "barriers to trade" then the government's ability
to deliver on the domestic public, social, and cultural policy
objectives it claims to support is severely curtailed by GATS.
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