[asia-apec 1598] Article on GATS forum

[Aaron James]

Forum Highlights Implications of Services Agreement in the WTO

Aaron James
Canada Asia Pacific Resource Network
www.caprn.bc.ca

A little known, but sweeping new trade agreement, the WTO General Agreement 
on Trade in Services (GATS) is the latest threat to the public sector and 
the ability of governments to regulate in the public interest. Details of 
this new trade deal were presented at a recent forum held in Vancouver on 
September 21, organized by Trading Strategies, a coalition of unions and 
civil society groups.

GATS is one of 15 existing agreements from the World Trade Organization, an 
international body which seeks to eliminate "trade barriers" through 
privatization and competition. Agreements are designed to restrict 
governments over areas that impede on matters of "trade". WTO agreements 
are legally binding, enforced through dispute panels, and backed up with 
threats of trade sanctions, all of which supercede the power courts and all 
levels of government within member countries.

First negotiated six years ago at the Uruguay Round, GATS is an ambitious 
and binding set of rules covering the trade of services that currently is 
being broadened. With the failure to launch a new Millennium Round of WTO 
trade agreements, much of the agenda from Seattle is being "stuffed" into 
GATS talks. Because of existing commitments to progressively expand the 
scope of GATS, it is being targeted as the ideal venue to further achieve 
the agenda of the WTO.

By their nature, services cover a wide scope of labour force activity, 
ranging from the act of supplying a good, such as retail, gas or energy, to 
satisfying a public demand, such as schooling or libraries.

The agreement covers rules regarding 
tariffs, but, like the definition of services, it too has broader impacts, 
extending to not only to regulation of domestic trade, but also to 
government measures that incidentally affect it. In practical terms, such 
an agreement would give new powers to challenge government policy that 
would result in, not a sharp, but a gradual erosion of the public sector.

Panelists offered many examples of how GATS threatens to undermine the 
ability of governments to act in the public interest. Certifying schools, 
and preferential hiring of Canadian teachers are examples of what would 
qualify as "barriers to trade" under GATS, as would planning restrictions
on the 
location and size of "big box" retail. The rollback of the public sector 
could also come from the reclassification of services covered under GATS 
rules, despite the commitment of the Canadian government to do otherwise. 
The management of schools, water purification, or janitorial 
services in hospitals could easily be reclassified as commercial services 
under GATS.

Local writer and activist Ellen Gould noted that the current position 
Canadian trade officials appear ready to bring to GATS negotiations 
includes calls for the insertion of prior consultation and least trade 
restrictive domestic regulation clauses. For Sinclair, the latter of these 
poses the most serious threat to the public sector, since governments would 
be open to challenges on the basis that laws, licensing, frameworks and 
other regulatory measures could be designed differently so as to be less 
burdensome on the pursuit of business opportunity. Codes for forestry or 
health and safety standards, for instance, might be challenged as being 
more burdensome than necessary. As for the former of these, governments 
could also be challenged under WTO dispute panels for having not consulted 
with an affected company upon introducing legislation on the delivery of 
services, such as new public funding for child care. These positions were 
arrived at with limited consultation and no public debate, highlighting the 
undemocratic nature of the WTO. The lingering effect, said Gould, is the 
chill sent on governments for introducing new initiatives on matters 
affecting thee trade of services.

Panelists explained that while the Canadian government has said publicly 
that health and education will not be covered under GATS, this assurance is 
inadequate. For one, the broad sweeping scope of GATS offers many avenues 
for effectively challenging the de-listing of protected public services. In 
the case of split-run magazines, top Canadian trade officials felt they 
could design WTO-proof trade legislation to ensure that advertising 
revenues stayed with Canadian magazines with original Canadian content. The 
bill was successfully challenged under GATS, and amended, loosing much of 
its force. Given that delivery of public sector services such as health and 
education are often hybrids of public/private/non-profit arrangements, 
Canada may be setting itself for defeat at the WTO dispute panel by cases 
brought forward on behalf of foreign, private for-profit service providers. 
Further, Sinclair questioned how Canada can expects to de-list these 
sectors when it is actively pressuring other countries to open these 
sectors to foreign competition.

Public debate on GATS, urged the panelists, is needed immediately, 
otherwise, Canadians will be forced three-years from now to accept or 
reject a hard-fought deal invested with much energy, resources and 
corporate lobbying. Pressure would be too great to not accept the 
agreement. Cohen remarked that matters concerning national defence are 
excluded from the WTO. She argued that a similar carve out should, at the 
least, be demanded of GATS and the WTO.

(The Canada Asia Pacific Resource Network is a non-profit organization that 
promotes solidarity projects with trade unions and NGOs in the Asia 
Pacific. A report of the September 7 BC Government Symposium on GATS 
prepared by British Columbia Teachers Federation's Larry Kuehn is available 
on the CAPRN website: http://www.caprn.bc.ca/apecmon/lk_gats.html)

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Aaron James
101 - 1717 Comox Street
Vancouver, British Columbia V6G 1P5
phone (work): 604-255-7346
phone (home): 604-602-1626
fax: 604-255-0971
http://members.tripod.com/aaronjeromewestjames