Serving Up the Commons
by Tony Clarke
Multinational Monitor magazine, April 2001
The smoke and pepper spray had barely lifted from the streets
of Seattle when the World Trade Organization (WTO) began a new
set of global trade negotiations. Although efforts to launch a
new round of worldwide comprehensive trade talks collapsed in
Seattle, one of the built-in agendas which the WTO inherited from
the Uruguay Round of the GATT was a commitment to expand global
rules on cross-border trade in services through the General Agreement
on Trade in Services (GATS) regime. In February 2000, the WTO
launched what has been labeled as the GATS 2000 negotiations.
The GATS negotiations are designed to provide multinational
corporations with the power tools they need to take control of
much of what remains of the 'commons' on this planet. Every service
imaginable is on the table, including a wide range of public services
in sectors that affect the environment, culture, energy and natural
resources; plus drinking water, health care, K-12 education, post-secondary
education, and social security; along with transportation services,
postal delivery, prisons, libraries and a variety of municipal
services. By phasing out all governmental "barriers"
to international trade and commercial competition in services,
the GATS regime is designed to apply to virtually all government
measures affecting trade-in-services, from labor laws to consumer
protection, including regulations, guidelines, subsidies and grants,
licensing standards and qualifications, and limitations on access
to markets, economic needs tests and local content provisions.
If the proposed set of GATS rules are adopted, they will radically
restructure the role of government regarding public access to
essential social services worldwide, to the detriment of the public
interest and democracy itself.
The existing GATS regime of the WTO, initially established
in 1994, is already comprehensive and far reaching. Currently,
the GATS rules apply to all modes of supplying or delivering a
service including foreign investment, cross-border provisions
of a service, electronic commerce and international travel. The
current GATS features a hybrid of both a "top-down"
agreement (where all sectors and measures are covered unless they
are explicitly excluded) and a "bottomup" agreement
(where only sectors and measures which governments explicitly
commit to are covered). What this means is that presently certain
provisions apply to all sectors while others apply only to those
specific sectors agreed to.
The new GATS negotiations are designed to adopt new GATS rules,
and to extend them to all service sectors. Besides compelling
governments to grant unlimited market access to foreign service
providers, without regard to the environmental and social impacts
of the quantity or size of service activities, the proposed expansion
of the WTO regime on services will:
* Impose new and severe constraints on the ability of governments
to maintain or create environmental, health, consumer protection
and other public interest standards through an expansion of GATS
Article VI on domestic regulation. A proposed "necessity
test" would require governments to show that their laws and
regulations affecting service industries are the "least trade
restrictive," regardless of financial, social, technological
or other considerations. This matches existing WTO rules related
to the trade in goods.
* Restrict further the use of government funds for public
works, municipal services and social programs. By imposing the
WTO's national treatment rules on both government procurement
and subsidies, the new negotiations seek to impede governments
from making public funds available only for public services, to
the exclusion of foreign-based, private service corporations.
* Accelerate the process of providing service companies with
guaranteed access to domestic markets in all sectors- including
education, health and water-by permitting them to establish their
commercial presence in another country. These rules would hold
that, since provision of a service may require an in-country presence
(as contrasted to goods, which can always be shipped), foreign
service corporations must be permitted to invest and open shop
in GATS member countries.
THE INDUSTRY LOBBY
The chief beneficiaries of this new GATS regime are a breed
of corporate service providers determined to expand their global
commercial reach and to turn public services into private markets
all over the world. Service corporations view health, education
and water each as trillion-dollar-plus annual markets.
Driving the GATS agenda are powerful lobby machines like the
U.S. Coalition of Service Industries (USCSI), which specifically
claims credit for establishing the agenda for GATS 2000. The USCSI
is composed of major corporate players with vested interests in
securing global markets for their service products including electronic
entertainment and telecommunications giants AOL Time-Warner, AT&T
and IBM; energy and water enterprises like Enron and Vivendi Universal;
financial empires like Citigroup, Bank America and J.P. Morgan
Chase; investment houses like Goldman Sachs and General Electric
Financial; health insurance companies like the Chubb Group; management
and consultant firms like KPMG and PriceWaterhouse Coopers; and
express delivery services like United Parcel Service and Federal
The USCSI is further fortified in its lobbying actions by
both the European Services Forum and the Japan Services Network,
which represent similar corporate service providers who want access
to global markets. The European big business coalition is comprised
of 47 corporations providing for-profit services in several key
sectors. These include major banking institutions like Barclays
PLC and Commerzbank AG; telecommunications giants such as British
Telecom, Telefonica and ' Deutsche Telekom AG; water giants including
Vivendi and Suez-Lyonnaise des Eaux; health insurance companies
like the AXA Group and CGNU (CGU plus Norwich Union); financial
consultants/accounting firms such as Arthur Andersen Consulting
and Price-Waterhouse Coopers; publishing and entertainment conglomerates
like Bertelsmann; plus brand name empires such Daimler-Chrysler
Services and Marks and Spencer PLC. The head of the newly formed
Japan Services Network is the CEO of the Mitsubishi Corporation.
If these big business coalitions get their way, the GATS 2000
agenda will amount to a frontal attack on the collective and individual
rights of people that are enshrined in the United Nations Universal
Declaration of Human Rights and its accompanying Covenants and
Charters. Not only will foreign-based, for-profit corporations
be able to access public dollars to take over public hospitals
and schools, but regulations on health and education standards
will be undermined by global trade rules under the WTO. Chains
of foreign-based, for-profit corporations will be able to invade
the child care, social security and prison systems in all WTO
member countries. Foreign-based corporations will gain rights
to bid for municipal contracts for construction, sewage, garbage
disposal, sanitation, tourism and water services.
For many Third World countries, this invasion of peoples'
basic rights is not new. During the past two decades or more,
the structural adjustment programs of the International Monetary
Fund and the World Bank have been used to force many governments
in the South to dismantle their public services and allow foreign-based
healthcare, education and water corporations to provide services
on a for-profit basis. Under the proposed GATS rules, developing
countries will experience a further dismantling of local service
providers, restrictions on the build up of domestic service providers,
and the creation of new monopolies dominated by corporate service
providers based in the North.
The WTO will convene a stocktaking session at the end of March
2001 to clarify the negotiating positions of the member countries
along with the rules and guidelines for the GATS negotiations.
Following this stocktaking session, formal negotiations are expected
to begin and continue for roughly another two years or so.
WTO chief Michael Moore has been issuing public warnings in
Washington, D.C. and the capitols of other major industrialized
countries about the dangers of the GATS becoming the target of
a citizen campaign. As civil society groups begin to mount their
campaigns to "Stop the GATS Attack," the WTO is calling
on member governments and their corporate allies to become vigorously
engaged in publicly defending the GATS.
As the chair of the U.S. Coalition on Services, Dean R. O'Hare
(who is also CEO of the Chubb health insurance consortium), put
it in his presentation to a European Services Forum conference
on GATS 2000: "We have to do more to counter those who have
distorted the issues and threaten to roll back the benefits of
freer trade. As we saw in Seattle, and at the IMF meetings in
Washington and Prague, ... those opposed to open trade are strongly
mobilized. We can't any longer expect to be able to win our case
in private closed meetings with governments. We have to convince
wider publics. "
Tony Clarke is the director of the Polaris Institute in Ottawa,
Canada. He is the co-author (with Maude Barlow) of Global Showdown:
How the New Activists Are Fighting Global Corporate Rule.
Trade Organization (WTO)