Forum Highlights Implications of Services Agreement in the WTO

vieuxcmaq, Mardi, Octobre 17, 2000 - 11:00

James Aaron (

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:

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