Are you being served?
Dave Timms of the World Development Movement in Britain analyses the General Agreement on Trade in Services One year ago, trade unionists, indigenous peoples and campaigners celebrated the collapse of trade negotiations at the World Trade Organisation (WTO) in Seattle. The agenda had been overloaded past breaking point and the talks, which were aimed at launching a new round of trade agreements, dissolved. The waves from these momentous events have continued to spread throughout the world. If, as Francis Fukuyama arrogantly proclaimed, the fall of the Berlin Wall marked the "end of history", then Seattle was the sound of history starting up again. Squabbling among rich countries (mainly the EU versus the US), poor countries standing their ground on government procurement and investment measures, plus the utter incompetence of conference organisation, combined in the heady hothouse atmosphere of tear gas and protest as the talks imploded. The past 12 months have seen frantic political activity between the US and the EU to ensure that Seattle isn't repeated at subsequent WTO ministerial meetings. After Seattle, (British) Industry Secretary Stephen Byers said: "The WTO will not be able to continue in its present form. "There has to be a fundamental and radical change in order to meet the needs and aspirations of all 134 members." This has not happened. In fact, the government has been pushing full steam ahead for new negotiations. The existing WTO agreements have continued. The reform agenda has been mostly ignored. Over 1,000 non-governmental organisations around the world have signed a statement calling for the WTO to "shrink" its remit or have civil society "sink" it. Opposition to specific WTO agreements and to the general corporate direction of globalisation has solidified. Protests in Prague, Washington and, most recently in Nice, are famous because they happened under the media spotlight. But there have been plenty in poor countries, where protests tend to be under the banner of anti-privatisation and deregulation of specific sectors rather than the general issue of globalisation. Research by the World Development Movement has shown that, in the 10 months following Seattle, there were at least 50 separate episodes of civil unrest in 11 different poor countries, all directed against IMF and World Bank liberalisation policies. In Seattle, the combination of protests and resistance from developing counties stopped a new round being launched and new agreements being negotiated. The WTO did not, however, grind to a halt. The dispute process — the Supreme Court of free trade — has continued to rumble on. But what is more worrying is the General Agreement on Trade in Services (GATS) which was left unaffected at Seattle. GATS hadn't attracted as much public attention. It was part of the built-in agenda that countries signed at the birth of the WTO in 1994. After Seattle, new agreements on government procurement and investment are still some way off. For those seriously interested in extending the liberalisation of the world economy, GATS has become the only game in town. GATS is far more than just another acronym in the alphabet soup of international trade deals. It is a highly complex trade agreement, but it does a very simple job. GATS has been described as the "Heineken" of trade deals — taking the free market into areas that other trade deals have failed to reach. It threatens public access to essential services and reduces government's ability to intervene in large sections of its economy. GATS will reduce the ability of democratically elected governments to regulate the power of unaccountable multinational corporations. The scope of GATS is breathtaking — worldwide trade in services was worth over $1,000 billion last year. GATS identifies 160 service sectors, from tourism to transport and from catering to construction — someone summed it up as "services are anything that you can't drop on your foot". But the vagueness of the agreement has resulted in some surprising things being defined as services. After being heavily lobbied by multinationals, the US brought a case against the EU over its support for small Caribbean banana producers, claiming that it was unfair. The WTO ruled in favour of the US and sanctions were placed on the EU covering a range of products, including Roquefort cheese and Scottish cashmere. This case was brought under GATS. GATS is a service agreement yet it covers bananas because bananas have to be distributed and distribution is a service covered under GATS! From the British perspective, the threat to our comparatively highly regulated service sector is beginning to be exposed. Substantial concerns exist about the impact on the British education and health sector, which have been describes as "ripe for liberalisation" by one EU GATS negotiator. For poor countries, GATS could be a disaster. The effect of privatisation of basic utilities in developing countries has been well documented. If multinationals are seeking to make a profit out of water, health and education, those without purchasing power are likely to lose out. Water privatisation in Puerto Rico resulted in poor communities going without water while US military bases and tourist resorts enjoyed unlimited supply. Developing countries are very wary of further liberalisation of services. GATS was sold to them on the grounds that they could liberalise at their own pace. Of course, in practice, it is a little different. As part of this year's GATS negotiations, proposals have been put forward to change the negotiating structure of GATS to ensure that more service sectors are included at a faster pace. Governments will "request" sectors from other countries in exchange for "offering" their own — for instance, the EU is likely to ask Thailand and Philippines to further liberalise their tourism sectors. This happens within a framework that commits WTO members to "achieve a progressively higher level of liberalisation" in their service sectors. It is unsurprising that corporations have been the driving force behind this agreement. But the blatant manner in which this is acknowledged is shocking. The EU website describes GATS as "not just something that exists between governments. It is, first and foremost, an instrument for the benefit of business". If we ever had any doubts, WTO services division director David Hartridge makes it crystal clear when he admits that, "without the enormous pressure generated by the US financial services sector, particularly companies like American Express and Citicorp, there would have been no services agreement". The service industry is big business and heavily dominated by Western multinationals. US health corporations are reaching saturation in their home market and are eyeing the massive state-run European health sector. At the same time, European utility corporations are having their attempts to expand into developing countries' markets frustrated by tight regulations and state ownership. Following their creation out of privatisation of British utilities, a new breed of service corporation has quickly taken advantage of the opening-up of utilities markets in poor countries. Anglian Water supplies water in Chile, National Grid delivers electricity in Zambia and Thames Water has contracts in Indonesia, Thailand and Malaysia. Even though GATS will have a huge impact on people and parliaments around the world, the signing of this agreement at the end of 1994 passed almost unnoticed. GATS applies to all levels of government — central, regional and local. Significantly, government commitments under GATS are effectively irreversible. Once a sector has been liberalised, future governments, however democratic, will find it virtually impossible to reverse the decision. Certainly, the WTO secretariat does not appear to give much weight to the possibility of reversal, with senior officials describing liberalisation under GATS as "irreversible". Decisions on how to organise service delivery are effectively being removed from the political arena. Unless we act now, citizens in years to come may no longer have the democratic right to decide how public services are delivered and private service corporations are regulated.
* * *Morning Star Britain's daily paper of the left.