BY KYLIE MOON
Behind closed doors in its Geneva headquarters, out of view of the public eye, the World Trade Organisation is currently negotiating the expansion of GATS, the General Agreement on Trades in Services. The product of extensive collusion between trade officials and global corporations' extensive lobbying machinery, GATS has been described as the "next stage in global liberalisation".
The specific aim of GATS is to remove all barriers on international trade in services. Signed in 1994 at the conclusion of the "Uruguay Round" of trade talks, GATS is one the WTO's 17 international trade agreements. It lays down a set of rules restricting governments from making decisions on how trade in services takes place, thereby facilitating the corporate takeover of public services.
It applies to activities as diverse as pesticide spraying, housing construction, tourist operations, and sewer and water facilities, a service being anything you can't drop on your foot.
Those intent on pursuing the GATS include corporate heavyweights frustrated by the demise of the Multilateral Agreement on Investment in 1998 and the collapse of trade talks in Seattle in 1999. They now see the GATS as their golden opportunity to pursue all kinds of agendas.
Big business
The service industry is big business, covering about two-thirds of economic activity in industrialised countries and recognised as the fastest-growing sector of the global economy.
Health, education and water are shaping up to be the most lucrative of all "services". Health care is considered to be a $3.5 trillion annual market worldwide, while education is worth $2 trillion and water $1 trillion.
But while the service sector forms an increasing proportion of most domestic economies, much of it is owned and regulated by governments — which is why the service sector has become a particular target for liberalisation by multinationals.
The agenda for the present ongoing negotiations in Geneva has largely been set by powerful lobby machines like the US Coalition of Service Industries and the European Services Forum.
David Hartridge, the former director of the WTO Services Division, explains: "Without the enormous pressure generated by the American financial services sector, particularly companies like American Express and Citicorp, there would have been no services agreement and therefore perhaps no Uruguay Round and no WTO."
The chief executive officer of US-based Columbia/HCA, the world's largest for-profit hospital corporation, insists that health care is a business no different than the airline or ball bearing industry and vows to destroy every public hospital in North America.
Investment houses like Merrill Lynch predict that public education will be globally privatised over the next decade, declaring that untold profits can be made through the process.
Water giants like Vivendi and Suez Lyonnaise des Eaux of France are working hand-in-glove with the World Bank to compel many Third World governments to privatise their water services.
In describing the agreement, the WTO Secretariat has said: "The GATS is the first multilateral agreement to provide legally enforceable rights to trade in all services. It has a built-in commitment to continuous liberalisation through periodic negotiations. And it is the world's first multilateral agreement on investment, since it covers not just cross-border trade but every possible means of supplying a service, including the right to set up a commercial presence in the export market."
Dire impact
GATS will have a major impact on First World countries, fueling their governments' already existing drive for cuts in public spending, deregulation and outright privatisation.
However, the most dire impact will surely be felt in the Third World, where the withdrawal of subsidies, privatisation of basic services, and invasion of multinational companies will drive down the living standards of already severely impoverished people.
Basic services like water, health and education are necessities, and should be supplied on the basis of peoples' needs, not on their ability to pay or the profitability of the market.
Many people in underdeveloped countries lack sufficient access to such services now, because public utilities have been grossly and persistently underfunded. In sub-Saharan Africa, for example, only 46% of the population has access to safe water and only 52% to sanitation; in some countries, access to health services plunges as low as 7% (in Tanzania).
But how much worse off would the 25.3 million mainly poor Africans who have AIDS be if they had to buy health services on the "open market"?
Because most trade in services occurs within a country, rather than targeting external barriers such as tariffs, GATS targets all internal domestic laws, regulations and policies, which may prevent foreign service providers from setting up shop or even limit their profitability.
GATS therefore extends beyond other trade agreements, preventing governments from following their own national development strategies and ensuring that local people actually benefit from the presence of multinational corporations.
Without such laws, Third World countries will be even more incapable of competing with huge multinational service-based companies from the First World and the bleeding of wealth from the poor to the rich will intensify.
The expansion of GATS will most likely enforce huge reductions in public funding, deemed "subsidising" and therefore either unfair competition or a barriers to entry for foreign services and suppliers.
The expansion of GATS will also impose new and severe constraints on the ability of governments to maintain or create environmental, health, consumer protection and other public interest standards.
Proposals include a "necessity test", whereby governments would bear the burden of proof in demonstrating that any of their country's laws and regulations are "not more burdensome than necessary", regardless of financial, social, technological or other considerations.
Irreversible
Commitments made by governments under GATS are effectively irreversible, regardless of the consequences or wishes of future governments.
The existing agreement operates on a "bottom-up" principle, whereby member-countries list the services they are willing to open up when they first sign on. These restrictions are the main bargaining chips traded off in negotiations.
In the current negotiating round, the pressure will be on for each government to reduce the number and scope of their restrictions.
If the WTO round goes ahead in November, the chances are that this be changed to a "top-down" structure where member-countries will have to specify which sectors they don't want GATS to apply to, leaving every other service open to privatisation.
As with any WTO regulation, any member-government which does not comply will have trade sanctions levied against them.
Many non-government organisations are pushing for GATS to at least include an emergency clause in the case of social or economic crisis, but even this is not acceptable to the corporate elite.
Serious negotiations between member-governments on new measures in GATS started on March 19, with an ambitious timetable for completion by the end of 2002.
The start of these negotiations was not affected by the collapse of the WTO meeting in Seattle in 1999, because they were already part of the "built-in agenda" agreed to in 1994 at the conclusion of the Uruguay Round.
As GATS is a "built-in commitment to continuous liberalisation", no new mandate is required for negotiators to extend its reach. In fact, negotiators took up their work a mere three months after Seattle, and intend to continue regardless of the outcome of the WTO's fourth ministerial meeting in November, 2001 in Doha, Qatar.
One of the main motivations for the corporate elite in pushing GATS negotiations is that they are less visible politically, that is, they are less at risk to come under challenge and direct public protest.
Says WTO Director of Services David Hartridge, "Services is the major part of the built-in agenda; less difficult and less visible politically than agriculture but very much larger in economic importance and potential. It is also the least controversial element of the Seattle agenda."
However, corporate lobbyists and their tame trade officials are unlikely to get their wish. Worldwide, campaigners are starting to study the implications of GATS — and are reeling back in horror.
Opposition to GATS' enforced privatisation of everything is likely to be, and needs to be, a major part of global efforts to prevent a new trade round being launched in Qatar and to reign in, and overthrow, the WTO's control of world trade.