page 22

issue 103

august 2003   

Demonstrations at EU Trade Ministerial in Palermo in July 2003 (left) and at a European Services Forum meeting in Brussels in March 2003

what is gats?

The current WTO negotiations on services, called the General Agreement on Trade in Services (GATS), are a complex series of talks on how to remove barriers to trade in services. Services have been described as anything you can’t drop on your foot: distribution and transport, broadcasting and the arts, provision of water, energy and education and so on – the WTO lists more than 150 areas in all. GATS will reduce the ability of governments to decide who runs services and how, and will restrict their capacity to prioritize goals such as equity, affordability and environmental sustainability in the provision of services.

GATS 2000, the latest round of GATS negotiations, works through a series of negotiations in which countries request liberalization from other countries and in return offer liberalization in specified services sectors. After initial requests and offers, WTO members enter into bilateral negotiations to reach agreement over the level of liberalization. Parallel to this request/offer process, GATS also comprises negotiations on new rules that may ultimately cover all services sectors, regardless of whether a country has liberalized the sector under GATS. The deadline for the completion of negotiations is January 1st, 2005. However, negotiations are not going so well, with only about 18 percent of WTO countries having submitted their requests as of June 2003.

The problems with GATS include:

more privilege with no responsibility for big business: GATS is fundamentally about opening up new markets – either in new countries or in new areas like water – for transnational corporations. As the European Commission website on GATS states, “The GATS is not just something that exists between governments. It is first and foremost an instrument for the benefit of business.”

vast and too fast : The GATS negotiations seek to cover too many areas in too short an amount of time. As a result they favor rich countries which have the capacity to deal with rapid and complex negotiations. The speed of the negotiations also prevents genuine public consultation and input.

binding and irreversible : GATS effectively ‘locks in’ all future governments to the agreement, regardless of changes in political outlook, technological advances, or newly available information. Governments have only one chance to stipulate which areas of the sector are not covered by the commitment, and once made, commitments are extremely difficult to reverse.

mirror of wto dysfunctionality : The GATS reflects the many problems of the WTO (including its basis on flawed economic theory) such as the systematic exclusion of many developing countries’ perspectives through exclusive and undemocratic negotiating processes; and the overwhelming structural power of the ‘quad’ countries (the US, the European Union, Japan and Canada).

Some of the specific impacts of the GATS could include loss of, or higher costs for, essential public services such as water supply and sewerage; higher public transportation charges; and increased social and environmental impacts as a result of increased mass tourism and less effective regulation of tourism.

Friends of the Earth and Corporate Europe Observatory believe the GATS negotiations could adversely affect community control over essential social services and restrict domestic environmental regulation. Instead of pushing ahead with the GATS negotiations, we believe there should be a moratorium on further liberalization and the initiation of a thorough, independent assessment of the social and environmental implications of GATS..

more information:

GATS Watch: www.gatswatch.org

FoE England, Wales and Northern Ireland: www.foe.co.uk