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US: For ambitious GATS talks, but not in air, maritime

by Chakravarthi Raghavan

Geneva, 6 Oct 2000 - The United States has put forward at the Special Session of the GATS Council, which is running the new round of talks, proposals calling for an ‘ambitious’ agenda for breaking down existing restrictions, but has left little doubt it does not want air or maritime transport services brought in.

The US paper also calls for ‘meaningful’ liberalisation, with broader and more transparent commitments in GATS schedules, broader sectoral coverage, improved classification “to reflect the reality of the market place”, and taking as the starting point for liberalisation, “current restrictions sector by sector”.

It also wants the request-and-offer approach to be supplemented by other approaches -‘model’ sets or ‘templates’ of GATS commitments for key sectors, use of ‘clusters’ of service activities ‘to break out of restrictive categories’ created by the present WTO/GATS classification (in W/120) and negotiating ‘cross-sectoral’ or ‘horizontal’ commitments.

Other papers tabled before the GATS Special Session, but some of which were not officially made available by the WTO, include a paper by Mauritius on behalf of the African Group, as well as a paper tabled by the EC, Hong Kong China, Japan, South Korea, Norway and Singapore, calling for the new round to address the issue of maritime transport services (which the US blocked from liberalisation earlier).

Meanwhile, it is apparent that the WTO and its trade officials are getting worried at the level of public discussions and debates already under way on the effects of GATS on public services of countries.

Trade officials, without wanting or willing to be quoted, about the growing debates in several industrialized countries about the likely effects of GATS and its thrust to open up markets on a variety of service activities including such activities as education, health etc.

Several of these concerns have arisen in countries where several of these activities are provided by public sector enterprises, sometimes also supplemented by or competing domestic private sector services, but which if opened up to foreign competition and service suppliers from abroad may result in reducing the overall level of availability.

An example is the French health service, which by all measurements, including by the World Health Organization, is superior to that available to the public in the US or even in the UK with its once very much valued health service.

Trade officials in Geneva are trying to steer media against such reports or assessments, pointing to Art 1.3 (b) of GATS which says that ‘services’ include any service in any sector “except services supplied in the exercise of governmental authority,” as implying that the fears being raised by non-government organizations and media in Canadian and French media are misconceived.

However, Art.1.3c of the GATS also makes clear that a “service supplied in the exercise of governmental authority” means any service which is supplied neither on a commercial basis nor in competition with one or more service suppliers.

When questioned whether such a provision would not enable foreign corporations wishing to supply ‘education’ or special ‘health services’ in a country government, through a public sector entity, and where a private domestic entity also provides that service, hard put trade officials fall back on the ‘free trade theology’ that the competition is good for the country!

The study for the Canadian non-government think tank, Canadian Centre for Policy Alternatives, by Mr. Scott Sinclair (see separate stories in SUNS # 4755 and 4756) has raised several of these issues and the moves and plans of the major industrialized nations to further the interests of their corporations.-SUNS4756

The above article first appeared in the South-North Development Monitor (SUNS) of which Chakravarthi Raghavan is the Chief Editor.

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