General Agreement on Trade in Services

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  • by Anup Shah
  • This Page Last Updated Tuesday, July 24, 2001

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." David Hartridge, Director, WTO Services Division.

Laura Wilkes, GATS 2000 — The end of democracy?

GATS could limit the sovereignty of host governments [to control TNCs]. GATS increases the power of TNCs at the expense of governments.

John Madeley, Big Business Poor Peoples; The Impact of Transnational Corporations on the World's Poor, (Zed Books, 1999) p. 143.

The General Agreement on Trade in Services (GATS) at the WTO is seen as the next MAI (Multilateral Agreement on Investment, that was successfully derailed by enormous protest at the impacts it would have on people's lives).

Its goal is to basically further liberalize services in the public domain. While private businesses providing public services can have its merits, the concerns with something like GATS has been along the lines of concentrated ownership, foreign ownership by large transnationals and rules limiting or affecting the ability of national governments to appropriately hold companies providing these services sufficiently accountable. On a broad range of "services" this therefore has a wider impact than many other (often also undemocratic) international trade and investment agreements.

Transnational corporations [TNCs] and their strong business lobby groups have helped make the US and European Union (EU) push the GATS hard to developing countries.

If given the go ahead, it too would be seen to have a "devastating effects on the ability of governments to meet the needs of the poorest and most powerless of their citizens" according to the World Development Movement's report, titled In whose service?. The report goes on to show that there are concerns on a number of fronts including the following:

  1. GATS covers basic services like water, health and education. These are basic necessities –- not things that can be left to the market. It should be the duty of governments to ensure that even the poorest have access to such services, whether or not they can afford to pay. Yet, water supply in developing countries appears to be a major target for European companies in the current negotiations.
  2. GATS rules are not just limited to the cross-border trade in services. They also prevent some forms of government regulation of foreign investors, that is, of multinational companies setting up shop in their country. The 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.
  3. Commitments made by governments under GATS are effectively irreversible. The privatisation and deregulation of service provision is highly controversial, yet governments are not only signing away their own right to regulate – but the right of future generations to implement different policies.

The scope of Gats is breathtaking. Almost every human activity is designated a "service", from transport and tourism to water, health and education. Foreign corporations will be allowed to take over almost any public service on the basis of a secret "agreement" that is irreversible. The EU website describes Gats as "first and foremost, an instrument for the benefit of business". A prototype is well under way in Britain with the coming privatisation of the London Underground, air traffic control and sections of the health service and education.

John Pilger, The violence of a few protesters in Gothenburg is trivial. Blair runs a violent government, which sells lethal weapons, June 25, 2001

Negotiations started March 2001, with a view to get an agreement by the end of 2002.

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Author and Page Information

  • by Anup Shah
  • Created: Wednesday, December 20, 2000
  • Last Updated: Tuesday, July 24, 2001

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