the WTO Want My Water?
By Lori Wallach
When most people think about trade, they conjure up images of ships
laden with sacks of coffee and steel beams ferrying between nations,
and trade agreements focusing on 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, on constraining federal, state and
local regulatory policies and on commodifying public services and common
resources, such as water, into new tradable units for profit.
A leak this week of European
negotiating demands in WTO service sector negotiations that have been
quietly underway since 2000 in Geneva provided a harsh wake-up call
to the world about what is really at stake in these global "commercial"
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 U S consumer group Public
Citizen joined the Polaris Institute of Canada and civil society groups
around the globe in a coordinated release of the secret documents. Europe's
demands of the United States and 108 other WTO signatories provide the
"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.
The negotiations are to 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.
Think of GATS as a Trojan
Horse - appealingly dubbed a "trade agreement" - which in
reality 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. Actually, the terms create a right for a foreign firm to set
up subsidiaries in other countries or acquire local companies under
terms more favorable than provided domestic competitors. 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 it extremely difficult
for countries, states and local governments to reverse privatization
experiments that fail. 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 lost
business opportunities of their companies. Thus, if the United States
agrees to Europe's GATS-2000 demands to subject water to GATS disciplines,
then Atlanta, for instance, which just reversed a disastrous water privatization
involving a French company, could do so only if compensation was offered
not just to that company but to all WTO signatory countries. Another
GATS threat revealed in the secret European document is 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 U.S. 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 as 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 or if 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 is
likely to stop the Bush administration from trading away our basic public
services and governments' basic public interest regulatory powers.
(Lori Wallach is the director
of Public Citizen's Global Trade
March 6, 2003