Leaked GATS documents
GATS documents
The Wall Street Journal and the Guardian have already written
articles in the leaked GATS documents that we released last night....
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Guardian
EU's secret plans hold poor countries to ransom
Larry Elliott and Charlotte Denny
Tuesday February 25, 2003
The Guardian
The European Union has drawn up secret plans aimed at prising open
service sector markets in the world's poorest countries in return for
cutting its lavish farm subsidies, it was revealed last night. The
demands under the World Trade Organisation's service sector talks
target 109 countries, including the 50 least developed, and would
allow European firms to charge for providing water to some of the
1.2bn people living on less than a dollar a day.
Details of the blueprint leaked to the Guardian yesterday showed that
the EU has demanded a high price for allowing developing countries
access to its highly protected farm markets. Brussels is determined
to win large gains for its highly competitive banking, telecoms and
business service firms in the new round of global trade talks
launched 14 months ago. Brussels is under intense pressure to axe
export subsidies which depress global food prices and impoverish
farmers in the developing world. Reform of the common agricultural
policy is the top demand from the EU's trading partners.
"The EU is explicitly linking these requests to agriculture and
saying we have to get something for our service sector companies,
before we give up our farm subsidies," said Barry Coates, head of the
world development movement. "It reveals why they keep these demands
secret - their agenda isn't pro-development. This is what they regard
as their goodies from the new trade round." Development campaigners
say that poor countries would have their hands tied if they agreed to
the EU's requests and be unable to respond in the way Labour did in
the UK when it effectively renationalised a failing Railtrack. "These
commitments are effectively irreversible, if privatisations get
botched there is no way out," said Mr Coates. "By making such
commitments, developing countries would be affecting generations to
come."
Campaigners believe that faced with the batteries of industry
lobbyists the EU is wielding to make its case, countries could end up
signing deals they will later regret. Among its demands, the EU is
demanding that Bolivia let in more foreign water companies despite
outrage after a multinational company increased water prices by 200%
in the country's third largest city. The EU is also targeting Panama
where water privatisation plans were scrapped in 1998 after strikes
and demonstrations, and Trinidad where UK company Severn Trent lost
the contract for managing the water authority four years ago.
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The Wall Street Journal
Tuesday, February 25, 2003
Leading the News: EU Asks U.S. to Revise Rules for Service Sector
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Host of Regulations at Issue As Bush Seeks Freer Trade; Alarm Likely at
Local Level
By Neil King Jr.
WASHINGTON -- As the Bush administration seeks freer global trade in
services, the European Union is taking aim at the sector and requesting
changes in how U.S. state and federal authorities regulate everything
from liquor sales to accounting.
The EU requests, included in a confidential document put forward as
part of continuing global trade talks, are likely to raise alarm among
state and local authorities, who would be required to alter rules
governing businesses ranging from land ownership to insurance. The
34-page paper was leaked to Ralph Nader's group Public Citizen.
The Bush administration is set to respond by the end of March with a
list of changes it is willing to make to service-sector regulations.
Some of the EU positions have been known for months, but the final list
includes new language regarding accounting standards, cross-border
insurance and the retail sale of electricity, all highly controversial
topics. Consumer groups, as well as a growing number of state officials,
contend that the secretive talks within the World Trade Organization
could undermine the ability of local authorities to oversee vital
economic services.
"What we hear is going on in these WTO talks will run smack up against
laws in states like mine, but for now it's behind closed doors," said
Mark Pocan, a Democrat in the Wisconsin State Assembly. The big issues
in his state, he said, are privatization of public water supplies and
rules governing electricity distribution.
The EU push coincides with new scrutiny in Washington of the role that
government, and particularly state and local governments, play in
limiting competition. The Federal Trade Commission, under Bush appointee
Timothy Muris, is seeking to open regulated markets across the economy,
from prescription drugs to caskets makers, and has created a task force
to examine anticompetitive restrictions on Internet commerce, such as
state rules limiting auto sales or interstate shipment of wine. The
agency also is preparing to charge that Unocal Corp. used state
regulation and its patents on a clean-fuel formula to lock up a monopoly
in the West Coast gasoline market.
And the wisdom of state regulation in telecommunications was a major
issue last week at the Federal Communications Commission, where Chairman
Michael Powell was outvoted in his effort to largely eliminate the role
states play in overseeing wholesale rates that the four big regional
Bell telephone companies charge competitors for using their lines.
U.S. Trade Representative Robert Zoellick has made opening up global
trade in services a central plank of his strategy in the Doha round of
WTO trade talks, which are meant to wrap up at the end of next year.
Persuading the rest of the world to accept U.S. banks, insurers and
overnight-delivery companies would be a boon to U.S. business, but
promises to reciprocate in the U.S. are already raising the ire of
environmental and labor groups.
The EU demands mirror those that the U.S. regularly makes on its
trading partners to lift government rules that tend to favor domestic
companies over U.S. competitors.
An area of chief concern to labor is the push by the EU and other
countries to open the U.S. market to contract workers offering services
ranging from computer software to equipment maintenance and landscape
architecture. Environmental groups, meanwhile, oppose efforts to open
all water and sewage services to foreign competition. Such a move, they
contend, would allow other countries to overturn local water regulations
and break up public utilities if they posed a "barrier to trade" within
the world trade system.
"What is startling is how much of the U.S. economy is up for grabs here
and how broad the impact might be," said Lori Wallach, head of Public
Citizen's Global Trade Watch. Ms. Wallach obtained the EU document last
week. It wasn't clear when it was submitted to U.S. trade negotiators.
The EU document also indicates that European officials may be ready to
further challenge the requirement that businesses operating in the U.S.
abide by U.S. accounting standards, as opposed to international
standards used in Europe. The Securities and Exchange Commission has
rebuffed several recent requests to allow the domestic use of
international accounting standards, which critics say are overly
subjective and lack clear rules. The EU, in its request to the U.S.,
calls this practice "a regulatory trade barrier" that must be resolved.
The EU also is requesting that the U.S. expand the cross-border sale of
"large-risk" insurance services, a proposal that some experts say could
weaken controls over insurers offering services to businesses or even
individuals. The EU's earlier requests sought to open the U.S. market to
foreign sales of mutual funds; the new document seeks to expand that to
the sale of financial derivatives, especially futures.
Some of the previously known EU objectives could have a bigger effect
on individual states. For instance, the EU wants to eliminate rules in
16 states that give state authorities the sole right to sell packaged
liquor. The document also seeks to lift restrictions in nine states on
foreign ownership of land and to remove certain residency and
citizenship requirements for practicing law.
Some of the requests aren't likely to go far. For instance, the EU
wants the U.S. drop its centuries-old prohibition on foreign ships
moving cargo between U.S. ports, an unlikely move in these times of
heightened security. The document also includes a request that the U.S.
allow foreign companies and governments to acquire 100% ownership of
U.S. radio stations. The EU also wants the U.S. Postal Service to cede
its monopoly over bulk, first-class letter delivery.
Both U.S. and EU trade officials declined to comment on the EU
requests.
The service negotiations are part of a long effort to deepen provisions
within the General Agreement of Trade in Services, which was part of the
sweeping 1994 Uruguay Round of global trade talks. The U.S. made its
formal request of the EU and other countries last summer in documents
that remain undisclosed.
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*** Leaked GATS documents ***
Last night the Polaris Institute released secret, leaked documents from
the European Union which outline the EU's requests to about 109 countries
in terms of what they want to negotiate in the GATS. "Requests to South
Africa" are on that list (see http://216.18.14.226/SouthAfrica.htm) and
access to services such as water, waste management and electricity are
part of the proposal (I've copied some of the relevant text below).
The EUs requests to other countries can be found at
(http://www.polarisinstitute.org/gats/main.html)
The leaking of these documents is a big issue because all of these
negotiation have been highly secretive to date. Now we know what's
on the table from the EU, and although it's not surprising it ain't
very encouraging either. The language is typically opaque, but the
bottom line is that the EU wants SA to further open its markets to
private sector delivery in a wide range of services...
ENVIRONMENTAL SERVICES - EC REQUEST TO SOUTH AFRICA
This request is based on the EC proposal for the classification of
environmental services. While discussions on classification in this
sector are still ongoing, the EC would like to invite South Africa
to present its offer in accordance with this proposal, without
prejudice to the outcome of the discussion on the classification of
environmental services:
A. WATER FOR HUMAN USE & WASTEWATER MANAGEMENT
Water collection, purification and distribution services through
mains, except steam and hot water.
This sub-sector only concerns the distribution of water through mains'
(i.e. urban sewage systems). This excludes any cross-border
transportation either by pipeline or by any other means of transport,
nor does it imply access to water resources.
EC request: Extend sectoral coverage to include the above services.
- Mode 3: Take commitments under MA and NT.
- Mode 4: Commit as referred to in the section 'Horizontal commitments'.
Waste water services (CPC 9401)
- Mode 3: Take commitments, i.e. schedule 'none', under MA and NT.
- Mode 4: Commit as referred to in the section 'Horizontal
commitments'.
B. SOLID/HAZARDOUS WASTE MANAGEMENT
Refuse disposal services (CPC 94020)
Sanitation and similar services (CPC 94030)
C. PROTECTION OF AMBIENT AIR AND CLIMATE
Services to reduce exhaust gases and other emissions and improve
air quality (CPC 94040)
D. REMEDIATION AND CLEANUP OF SOIL & WATER
Treatment, remediation of contaminated/polluted soil and water
(part of CPC 94060)
E. NOISE & VIBRATION ABATEMENT
Noise abatement services (CPC 94050)
F. PROTECTION OF BIODIVERSITY AND LANDSCAPE
Nature and landscape protection services (part of CPC 94060)
G. OTHER ENVIRONMENTAL & ANCILLARY SERVICES
Other environmental protection services not classified elsewhere
(CPC 94090)
For each of the above sub-sector (B - G) :
- Remove limitation of all commitments to consultancy services only,
and for modes 1 (where technically feasible), 2 and 3 : Undertake
full commitments for market access and national treatment.
- Mode 4 : Commit as referred in the section "Horizontal commitments".
ENERGY SERVICES - EC REQUEST TO SOUTH AFRICA
This request includes services that are listed under the negotiating
proposal of the EU (S/CSS/W/60) . The work on the classification of
these services is still underway. For this reason, some activities
therefore lacks reference to CPC.
The EC wishes to underline the significant contribution of an
appropriate use of energy for the promotion of sustainable
development.
The EC requests that this area is committed as follows :
A. SERVICES RELATED TO EXPLORATION AND PRODUCTION
CPC 8675: Related scientific and technical consulting services
This sub-sector is not committed.
EC Request:
- Mode 3 : Take full commitments, i.e. schedule "none".
- Mode 4 : Commit as referred in the section "Horizontal commitments".
CPC 511: Construction and related engineering services
This sub-sector is not committed. EC Request:
- Mode 3 : Take full commitments, i.e. schedule "none".
- Mode 4 : Commit as referred in the section "Horizontal commitments".
C. SERVICES/RELATED TO NETWORKS
C.1 Operation of transportation/transmission and distribution
facilities
Services incidental to energy distribution (including operation
of transmission/distribution of electricity)
This sub-sector is not committed. EC Request:
- Modes 3 : Take commitments.
- Mode 4 : Commit as referred in the section "Horizontal commitments".
CPC 71310: Transportation of petroleum and natural gas
This sub-sector is not committed. EC Request:
- Modes 3 : Take commitments.
- Mode 4 : Commit as referred in the section "Horizontal commitments".
Energy services
1 EC Request to South Africa
D. STORAGE SERVICES
CPC 74220: Bulk storage services of liquids or gases
This sub-sector is not committed. EC Request:
- Mode 3 : Take full commitments, i.e. schedule "none".
- Mode 4 : Commit as referred in the section "Horizontal commitments".
E. SERVICES FOR THE SUPPLY OF ENERGY
E.1 Wholesale of energy products
Wholesale trade services of electricity
EC Request:
- Modes 3 : Take commitments
- Mode 4 : Commit as referred in the section "Horizontal commitments".
E.2 Retail Sale of energy products
Retail sale trade services of electricity
EC Request:
- Modes 3 : Take commitments for the supply to industrial customers.
- Mode 4 : Commit as referred in the section "Horizontal commitments".
E.3 Trading of energy products
EC Request:
- Modes 1, 2, 3 : Take full commitments for non-network energy products
and commitments for network-energy products.
- Mode 4 : Commit as referred in the section "Horizontal commitments".
E.4 Brokering of energy products
EC Request:
- Modes 1, 2, 3 : Take full commitments for non-network energy products
and commitments for network-energy products
- Mode 4 : Commit as referred in the section "Horizontal commitments".
G. SERVICES RELATED TO DECOMMISSIONING
EC Request:
- Modes 3 : Take full commitments, i.e. schedule "none".
- Mode 4 : Commit as referred in the section "Horizontal commitments".
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