"The GATS is not just something that exists between governments. It is first and foremost an instrument for the benefit of business." - European Commission (1998), Opening World Markets for Services. (1)
European Industry Lobby groups such as LOTIS (2) and the ESF (3) campaigned extensively to influence the negotiations on the Nice Treaty which was finalised at the Summit in Nice in December 2000. In less than a month, for the second time, that treaty is being voted on in an Irish referendum. Business interests from the global to the local level are striving to and succeeding in having their voices heard in the debate this time round. Why? Because they want to be charitable to the countries of Eastern Europe who want to join the EU? Or because there is another agenda?
One of the main corporate demands in the Nice treaty negotiations was for further centralisation of the EUs decision-making on international trade through changes in the EU Treatys' Article 133. NGOs and grassroots groups (4) from all around Europe have campaigned ever since against giving the European Commission "fast-track" powers in negotiations with the WTO (5) on the TRIPS (6) and GATS (7) agreements. Article 133 (8) is seen by many NGOs and Civil Society groups in Europe as a blatant attempt at removing any meaningful democratic oversight from the process of negotiating these agreements which will have huge ramifications for national governments in terms of the liberalisation of trade in services within national boundaries. This issue, disgracefully, has been ignored by media commentators on the Nice Treaty debate in Ireland, has been avoided like the plague by groups campaigning for a Yes Vote, and is, in our opinion, the 'Elephant' in the living room of the debate taking place at present. The insistence on the part of the Government that the Treaty is 'about' enlargement and nothing else is in our eyes merely a smokescreen disguising a corporate driven privatisation agenda which is quietly and enthusiastically being supported by our present 'Boston' oriented government.
AN EXTRACT FROM LEAKED LOTIS MEETING MINUTES.
"Reporting on PricewaterhouseCoopers' staff's recent visit to Geneva, Mark Hatcher explained that the main purpose had been to meet some key developing countries and to talk about PwC's draft model schedule. The Indian Ambassador had given them a warm reception, as had the Pakistani Ambassador. There had also been meetings with Singapore, Egypt, Canada, Chile, Argentina, Australia, the US and the EU. They had got a very positive reaction from Australia. The US Government was supportive behind the scenes. The meeting with the EU Ambassador, however, had been disappointing, with no support even in private. Within the EU, there had been support for PwC's efforts only from the UK, France and Ireland." (LOTIS) Committee Minutes: Thursday, 22 February 2001. (9)
THE IRISH GOVERNMENT SHARE THEIR AGENDA WITH PETER
Those attending the closed LOTIS meetings include Peter Sutherland, formerly the Director General of the World Trade Organization, who has made some recent high-profile interventions in support of a reversal of the result of the previous Irish referendum on this treaty, notably at a recent Fine Gael Forum in the Westbury Hotel.(10)
The Irish Government stance at negotiations of the Treaty of Nice was pro-liberalisation and in favour of handing increased powers in this area to the Commission."In the first phase of negotiations Trade Commissioner Pascal Lamy had high expectations. He and a number of governments - including Finland, Luxembourg, Belgium, Italy and Ireland - were ready to reform the EUs international trade policy, going far beyond some parts of the EU Treaty, and even contradicting it in some cases. Areas affected by their proposals would include education and health. The goal of the Commission was to get full competence to negotiate on behalf of the EU and to introduce majority voting on the important areas where unanimity is needed." Kenneth Haar/Denmark, SOS WTO. (11)
The new developments in the Nice Treaty are significant for the "built-in agenda" (12) of WTO negotiations which states that different areas of trade should be reviewed for further liberalisation every five years. This includes agreements on intellectual property (TRIPs) and services (GATS). These are precisely the areas where the Nice Treaty will make EU decision making more "efficient" and more democratically unaccountable.
STREAMLINING THE RATIFICATION PROCESS.
The Commission have been attempting to streamline the ratification process for international trade negotiations since at least 1990. So Qualified Majority Voting was introduced for 'traded goods' by the Single European Act and the Treaty of Maastricht. Judgment 1/94 of the European Court of Justice stated that the Commission had 'sole competence' on 'traded goods' issues but explicitly stated they did not have competence on Services and Intellectual Property. What Amsterdam did was stop the Commission signing agreements on services and intellectual property unless every government agreed. It also ensured that the European Parliament must be 'consulted' on any international trade agreements related to services and intellectual property. As the official EU website pointed out at the time, international agreements on services and intellectual property would require every member state to agree at the Council, that they must consult the Parliament and that the reason for this was that: "The negative effects of the globalisation of the economy will not be disarmed simply by implementing a common commercial policy, but also by defending the European social model (combating unemployment, reinforcing social policy, promoting equal opportunities, etc.)" Amsterdam Q & A. (13)
The collapse of the Seattle Ministerial Conference in 1999 hampered the progress of many negotiations, but not those on GATS, and since the beginning of 2000 they have been running at full speed. This is led by the EU and the US which both want to broaden and deepen the scope of GATS, closely mirroring the interests of the service industries of the developed World. With the changes in the EU Treaty, TRIPs and GATS are to a much wider degree part of EU competence and fall within the mandate of the European Commission. It is clear that problems will result from this centralisation of decision-making.
TREATYS AND SCENARIOS.
The EU Treaty clearly states that responsibility for health and education rests with the Member States. It is however important to note that while cultural and audiovisual services, educational services, and social and human health services (see subparagraph 2, of paragraph 6 of the proposed new Article 133) explicitly stay within the powers of the democratically elected governments of the EU, there are two big BUTs involved.
THE FIRST BIG BUT IS A WORST CASE SCENARIO:
What if the eight countries of the Council representing 169 votes in a 15 member EU signs a new version of GATS and TRIPS with the WTO and somewhere in a subparagraph of the new Agreements there is a technical legal and obtuse wording which could be interpreted as having an overlap on cultural and audiovisual services, educational services, and social and human health services? What will happen then? Well, legally, just because the Commission didn't prepare for this eventuality doesn't mean that the agreement can be backed out of or reversed. If the Commission signs an agreement and it overlaps on the three service areas supposedly remaining in the hands of Member State governments - tough luck. If they sign an Agreement and inadvertently or in the name of 'efficiency' go beyond the legal remit of their power that will not matter to the WTO and will not affect their opinion. Should the issue go to the WTO Court; the text of the Agreement will stand. These trade negotiations once signed CANNOT be legally reversed.
THE SECOND BIG BUT IS A MORE LIKELY SCENARIO:
The supply of services to any of the three areas singled out for dual competence (i.e. power shared by a Member State and the EU) will not be under this dual competence. In other words, for example, cooking, cleaning and servicing food in hospitals and schools will be controlled by any new GATS agreement and mean more privatisation, more deregulation, more liberalisation - i.e. more women than men bearing the brunt of anti-democratic EU trade negotiation policy and more minimum wage, no union representation jobs and a consequent reduction in the quality of work and the quality of life. There are further causes for concern in this area. Firstly, the treaty is unlikely to offer protection against liberalisation of smaller sub- sectors under these two sensitive areas. Secondly, the procedure for entering agreements on health, education and social protection (for instance pension systems) has now been written into the treaty. It could be construed as a worrying sign that some governments found it necessary to get the decision-making procedure for these areas clarified. It confirms that some of the core areas of the welfare state are at stake in the ongoing EUs trade policy negotiations with the WTO.
"Some will argue these are Chicken Little sky-is-falling concerns. But if the NAFTA-WTO experience shows anything, it is that corporate lawyers will grab onto any crevice in trade rules to hoist corporate interests above the public interest." Ralph Nader. (14)
The removal of the need for national ratification on issues like intellectual property and services severely limits the possibility for democratic oversight of Trade agreements on a national level and it can be said that the almost complete indifference which the European Parliament has treated the issue of the reforms of Article 133 leave little hope that this institution will rise to become an effective body for democratically accountable control of trade agreements entered into with the WTO in the near future. (15)
Parliamentary control is also about public access to information. This is crucial, as the Commission is far more difficult to monitor than national governments generally are. With the European Commission's monopoly on presenting proposals for EU trade policy, the decision-making process is extremely difficult to follow for large parts of the public. As more areas fall under full EU competence, the role of the Article 133 Committee is strengthened. The committee, appointed by the Council of Ministers, consists entirely of civil servants. Through this committee, which works largely in secrecy, the Council of Ministers has an indirect dialogue with the European Commission about international trade policies. "Only" parliaments and the public are excluded.
MORE LEAKED DOCUMENTS ON EU GATS REQUESTS.
The leaked documents of April 2002 (16) show that the European Union intends to ask all WTO member states to open up the water sector (including water collection, purification, distribution and wastewater treatment)(17) for international competition and to liberalise large parts of the energy sector and various other sectors, including retail, tourism and transport."This puts areas once excluded from GATS, such as the mail service and the water supply, on the bargaining table." Sydney Morning Herald. (18)
"Leaked documents of the European Commission to prepare its position for the
negotiations on a General Agreement on Trade and Services (WTO) demonstrate that
the European Commission is demanding that developing countries liberalise water,
energy and other essential services. The document, which has been prepared in
secrecy, reveals that the Commission is following a big business agenda. Despite
previous assurances from the Commission, the document clearly shows that
essential services are being targeted."
'THE EUROPEAN COMMISSION IN THESE DOCUMENTS IS LITERALLY ASKING FOR THE
WORLD - WHAT ARE WE GOING TO HAVE TO PROMISE IN RETURN?'
"The documents blow a great hole in many of the UK government's claims in defence of GATS. Clare Joy said: "The Government claims GATS doesn't endanger essential services, yet here they are explicitly targeted. They also claimed the agreement was flexible and governments retained the right to regulate - yet the documents show the EU wants developing government public interest regulations systematically eliminated. Our claims of the dangers of this agreement have been completely vindicated. GATS is not a one-way-street. Other countries, such as the US and Australia are currently discussing what services the EU should offer to open up to the ultra free market disciplines of GATS. The European Commission in these documents is literally asking for the world - what are we going to have to promise in return? World Development Movement (20)
We demand that the government answer questions about any commitments it has entered into in this area in discussions with groups such as LOTIS and the ESF and publicly address and take part in an open debate on the serious issues raised here. Do we really, as the economy suddenly enters choppy waters, want to take our eye off the ball and end up with a fire-sale of key elements of our public services without a full and frank debate on the issue? This liberalisation agenda, which is an integral part of the Nice Treaty, affects all EU countries and will profoundly affect the economies of new members. If we, who, as our government keep reminding us, are at the heart of Europe, know so little about this aspect of the Nice Agenda, how much do the electorates of accession countries know? Let's be good Europeans and find out on their behalf. The Referendum Commission has a constitutional obligation to inform the electorate fully on important aspects of the Nice Treaty - an obligation we believe it has not fulfilled to date in respect of Article 133 and its implications.
International Experts on GATS negotiations:
Eric Wesselius (Trans-National Institute/Corporate Observatory Europe (Amsterdam))
He has recently done a joint TNI/CEO project on GATS.
Tel no: 00-31-30-236.4422
Susan George (TNI Fellow /Author / Vice President of ATTAC)
Tel no: 00-31-20-662-6608
Myriam van der Stychle (TNI Fellow / Senior Researcher at SOMO in Amsterdam.)
Tel no: 00- 31-20-6391291
E-mail: email@example.com, firstname.lastname@example.org