Trade Secrets
What The
WTO Didn't Want You To Know
by
Lori Wallach
Dissident Voice
March 7, 2003
Secret
leaked documents have revealed European demands in the WTO negotiations that
have been quietly underway in Geneva since 2000. These documents provide a
harsh wake-up call to the world about what is really at stake in these global
"commercial" negotiations.
When most people think about
trade, they conjure up images of ships ferrying steel beams and sacks of coffee
between nations and of agreements about cutting tariffs and quotas on trade in
goods. In reality however, today's "trade agreements," such as the
1994 North American Free Trade Agreement (NAFTA) and the 1995 World Trade
Organization (WTO), have little to do with trade. Instead, they focus on
granting foreign companies new rights and privileges within the boundaries of
other countries. They attempt to constrain federal, state and local regulatory
policies, and to commodify public services and common resources -- such as
water -- into new tradable units for profit.
The leaked documents reveal
negotiations that will expand the scope of General Agreement on Trade in
Services (GATS,) one of the 21 pacts enforced by the WTO. The
"GATS-2000" talks are promoted by the United States and European
nations on behalf of multinational service sector conglomerates. Up for grabs
at the negotiating table is worldwide privatization and deregulation of public
energy and water utilities, postal services, higher education and state alcohol
distribution controls; a new right for foreign firms to obtain U.S. Small
Business Administration loans; elimination of a list of specific U.S. state
laws about land use, professional licensing and consumer protections; and
extreme deregulation of private-sector service industries such as insurance, banking,
mutual funds and securities.
The national consumer group
Public Citizen joined the Polaris Institute of Canada and civil society groups
around the globe in a coordinated release of these documents February 25.
Europe's demands of the United States and 108 other WTO signatories provide
"smoking gun" evidence, after months of speculation and concern,
about how these secretive WTO negotiations threaten essential public services
upon which people worldwide rely daily.
Think of GATS as a Trojan
Horse. Appealingly dubbed a "trade agreement," it actually contains a
massive attack on the most basic functions of local and state government. You
might ask what the GATS provision creating a new right for corporations to
establish a "commercial presence" within another country has to do
with cross-border trade. The answer: nothing. The terms allow a foreign firm to
set up subsidiaries in other countries or acquire local companies under more
favorable terms than their domestic competitors get. For instance, once a
service sector is covered under GATS, governments may not limit the number or
size of service providers, meaning that applying zoning rules on beach front
development or limits on concessions in national parks to foreign firms would
be forbidden. This is why many people consider GATS to be a backdoor attempt to
revive the Multilateral Agreement on Investment (MAI), a radical investment
pact that was killed by public opposition in 1998.
The GATS not only promotes privatization
of public services, but it makes reversing failed privatization experiments
extremely difficult for national, state and local governments. Under GATS, if
cities seek to bring a privately operated utility back into the public realm,
they only can do so if the U.S. government agrees to compensate all WTO
countries for their companies' lost business opportunities. For example,
Atlanta just reversed a disastrous water privatization involving a French
company. If the United States agrees to Europe's GATS-2000 demands to subject
water to GATS disciplines, such reversals could only occur if compensation was
offered not just to that company but to all WTO signatory countries. The secret
European document also revealed a demand to include retail electricity services
under GATS, which would mean that privatization nightmares like California's
energy deregulation would be nearly impossible to fix.
GATS also sets strict
constraints on government regulation in the services sector -- even when those
policies treat domestic and foreign services the same. GATS allows federal,
state and local regulations to be challenged as barriers to trade if they are
not designed in the least trade-restrictive manner. For instance, Europe has
charged that the rather modest Sarbanes-Oxley corporate accountability
legislation, inspired by the recent corporate crime wave, violates these GATS
limits on domestic service-sector regulations. Also, because GATS is geared
toward market access for foreign competitors, the agreement is hostile to
regulation in general, and in particular to the diversity of domestic
regulations in the United States that vary from state to state -- yet state and
municipal officials are excluded from these closed-door negotiations.
The leaked EU documents have
prompted civil society groups worldwide to call for a moratorium on the
"GATS-2000" talks and for a public process involving state and local
officials. The clock is ticking, since all WTO member nations, including the
United States, are expected to respond to the European demands within weeks,
starting March 31, 2003. At a congressional hearing this week, U.S. Trade
Representative Robert Zoellick dodged congressional inquiries about when -- and
whether -- the public and Congress would have an opportunity to vet the U.S.
"GATS-2000" commitments. Zoellick recently submitted similar
service-sector commitments without public consultation in the regional
NAFTA-expansion talks known as the Free Trade Area of the America (FTAA).
Only growing public and congressional
pressure can stop the Bush administration from trading away our basic public
services and the fundamental powers invested in governments to defend the
public interest.
Lori Wallach is director of Public
Citizen’s Global Trade Watch (www.citizen.org/trade/).
This article first appeared in TomPaine.com (www.tompaine.com)