Trade agenda propels privatization

Just because the World Trade Organization didn’t reach an agreement last December doesn’t mean public services have been spared.

Early in 2000, negotiators will meet again in Geneva to discuss trade in services — one of the major points of public opposition to the Seattle negotiations. The talks on the General Agreement on Trade in Services — part of the WTO’s ‘built-in’ agenda — were slated to go ahead regardless of what came out of Seattle. The talks aim to extend the GATS, to set up everything from health care, social services and utilities to education and municipal services for liberalization, privatization and deregulation.

Despite the stalemate in Seattle, the GATS is programmed to move forward. The first multilateral agreement to provide "legally enforceable rights to trade in all services," the GATS has a built-in commitment to renew negotiations periodically — each time with a view to removing more barriers to market forces.

While the GATS does not cover most public services, the key players want to change that. American and EU negotiators have both identified health and education as particularly "ripe for liberalization" and conversion into profit-generating commodities. And a European Commission policy paper, on the WTO and services, calls for increased constraints on governments to ensure that services can be supplied in a "free market environment."

Worldwide, services generate about US$12 trillion a year in economic activity. By 1997, global trade in services totalled US$1.3 trillion, according to WTO figures. With this much at stake it’s no wonder business interests are lobbying governments to open this lucrative area to include public services.

The existing GATS takes a "bottom up" approach, meaning only those services that countries voluntarily put forward have been subject to negotiation. The most powerful WTO members — the US, Japan, the EU and Canada — want to speed up the process so that all services are automatically on the table. The final draft declaration prepared by WTO heavyweights in Seattle stipulates that no service shall be excluded from GATS talks and further opens the door for negotiations to occur across the board.

If the GATS is extended to cover all services, corporations will decide how — and if — services are delivered. Governments would lose their power to regulate services and direct public funds to public services. And corporations would be guaranteed a share of the services "market". That means foreign, for-profit corporations would be guaranteed the right to bid on services that Canadian public institutions currently deliver. Governments would be barred from directing funds for public services to public and not-for-profit agencies because this "distorts trade". As a result, public dollars would be diverted into private, for-profit services.

All of these provisions would be backed by the WTO’s powerful dispute resolution process. The dispute settlement process allows one state to force changes in the domestic laws of other states and impose sweeping trade sanctions.

With two thirds of Canadian economic activity and 74 per cent of jobs in the service industry, any new trade deal touching services will have a far-reaching impact.