GATS - trade in services

Source: CADTM
Developing country governments have been rightly concerned about agreeing to texts which promise illusory reductions in agricultural subsidies in the European Union and United States and require them to cut their industrial tariffs proportionally more than the developed countries. They should also not allow themselves to be snookered into a bad agreement on services. July 2008. [see more]
The General Agreement on Trade in Services (GATS) is one of the most comprehensive agreements of the World Trade Organization (WTO). Its aim is to increasingly liberalize "trade in services" among WTO members.

The GATS came into force in January 1995, but negotiations officially began in early 2000. In March 2001, the Trade in Services Council set out the Guidelines and Procedures for Negotiations. The Declaration of the Doha Ministerial Conference (November 2001) backed the efforts conducted thus far, endorsed the guidelines and procedures for negotiations, and set a deadline to close negotiations: 1 January 2005.

Trade in services is defined broadly to include direct foreign investment in services such as health, education, water, pensions, and transportation. Liberalization means, among other things, eliminating any government policies whereby national providers are favored over foreign ones, such as, for example, preferential public subsidies. Significantly, it also involves eradicating state monopolies, as well as deregulation whenever a norm is considered too onerous for foreign investors and service providers.

WTO leaders have denied claims that the GATS would lead to privatization of public services. They supported this statement by pointing to a provision that stipulates that the GATS is not applicable to services "rendered in the exercise of governmental authority" and other examples of the wording of the GATS that protect a government’s right to regulate. But the wording offers little consolation to those alarmed by its potentially limiting effect on government regulation and policies. Industrial lobbyists of the North are making no attempts to disguise their intention of seeking urban infrastructure markets in the developing world. Then again, it’s the small print that tells the real story.

A critical issue in this debate is that all the key terms of the agreement are left undefined and will only be determined by WTO dispute resolution panels. Consequently, any claim that the GATS protects public services must be met at least with some skepticism.

The civil society of the South believes that the trade regulations and negotiations included in the GATS must undergo a radical transformation if they are to benefit the world’s poorest citizens. The GATS, it is argued, is not a ‘development-friendly’ agreement, as its advocates maintain, but rather an instrument wielded by the industrialized world to steadily curb the chances of development of the poorest countries, through successive rounds of negotiations.

The current services negotiations at the WTO have also led to fears that countries could be pressurized into commitments that will limit the ability of governments to regulate and ensure affordable and equitable access to essential services: it is unrealistic to expect profit-seeking private companies operating under market forces to meet the needs of the less lucrative groups of the population. This is partly because it is hard – particularly for governments that are not strong– to regulate a powerful private sector and partly because making commitments to allow foreign service providers access to the domestic market can reduce the scope a government has to regulate in the public interest (known in trade-related jargon as policy space).

Moreover, the bilateral format gives more scope than multilateral fora for arm-twisting by powerful countries, to persuade smaller countries to open more service sectors to international competition. A 2002 study by the Commonwealth Secretariat found that newly acceded WTO Members, all of which are developing countries, were pressurized to open more service sectors during accession negotiations.

According to a paper by the United Nations Conference on Trade and Development (UNCTAD) secretariat, prepared for the Commission on Trade in Goods and Services and Commodities on March 2005, services negotiations in the WTO have so far not attained an overall balance of rights and obligations, the increase in developing countries' service exports has been small, and the initial offers by major trading partners has been disappointing for developing countries. The paper says that the assessment of trade in services continues to be a main concern for developing countries, as lack of assessment and information is a main impediment to their more active participation in the services negotiations.
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Wednesday, July 09 2008
The perils of a Doha deal on services
(Source: CADTM)

Official information

Text of the Agreement (WTO)

United Nations Conference on Trade and Development (UNCTAD)

Services trade (WTO)

Doha declaration on services (WTO)

Provisions on Trade in Services in Trade and Integration Agreements in the Western Hemisphere (FTAA official website)

GATS and the privatization agenda

GATS 2000 – The end of democracy? (Corporate Watch)

Beyond the market: the future of public services (Transnational Institute)

Sectoral/plurilateral negotiations and the pitfalls for development (Our World is not for Sale)

GATS (Common Dreams)

Profiting from poverty: Privatization consultants, DFID and public services (War on Want)

Divide and conquer (Public Services International)

Public services at risk: GATS and the privatisation agenda (Social Watch)

Education and GATS

The GATS: what's at stake for higher education? (Trade Observatory)

GATS and the future of public services (Oxfam)

Education International

Take education out of GATS (GATSWatch)

Trade in higher education services: the implications of GATS

Trade, education and the GATS (US Coalition of Service Industries)

Civil society


Public Citizen

Friends of the Earth

Stop the GATS Attack Now! (AFTINET)

The General Agreement on Trade in Services : An impact assessment (Consumers International)

Stop the GATS power play, civil society groups demand (Public Services International)

GATS and access to essential services (3D: Trade – Human Rights – Equitable Economy)

International Gender and Trade Network (IGTN)

Union Network International - UNI


Our World is not For Sale

Analysis and opinions

Ignoring the crises? How further GATS liberalisation impacts the financial and food crises (Transnational Institute - South Centre)

Divergence between profit and public services

The perils of a Doha deal on services (CADTM)

GATS negotiations

Questionable timing for tighter GATS rules, liberalized banking (SUNS)

GATS dispute settlement cases: practical implications for developing countries (South Centre)

The players in the GATS negotiations (CorpWatch)

How the IMF and World Bank misrepresent their roles in trade liberalization (Citizen's Network on Essential Services)

Plurilateral requests aim at maximum opening of South's services (South-North Development Monitor (SUNS))

North launches offensive to open South's services by 'new methods' (Third World Network)

Driving the GATS juggernaut (Global Policy)

GATS modalities for autonomous liberalization credits set (Third World Network)

GATS negotiations should first reduce current imbalance (Third World Network)

GATS modalities aimed at leveraging greater coverage (Third World Network)

GATS requests and offers (GATSWatch)

European Union GATS requests leaked (Polaris Institute)

GATS: The forgotten battle over WTO investment rules (World Development Movement)

Health services

The GATS threat to public health (Equinet Africa)

GATS and trade in health insurance services (Commission on Macroeconomics and Health)

The wrong model: GATS, trade liberalisation and children's right to health (Save the Children)

Water services

General Agreement on Trade in Services (GATS) and water (Institute for Agriculture and Trade Policy)

The pros and cons of private provision of water and electricity services: A handbook for evaluating rationales (Citizen's Network on Essential Services)

GATS and water: the threat of services negotiations at the WTO (Save the Children)

Information resources

Free Trade and Globalization

The GATS and Libraries

A brief on the General Agreement on Trade in Services (GATS) and some implications for ordinary citizens (Jubilee South)

Glossary of GATS terms

Business Guide to the GATS (International Trade Center)

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