[Last update: 5 April 2001]

General Agreement on Trade in Services (GATS)

THE HINDU, Tuesday April 3, 2001.

An accord to auction vital resources
by Vandana Shiva

The General Agreement on Trade in Services (GATS) is the agreement being most aggressively pushed through the ``built-in agenda'' of the WTO through no new round was possible in Seattle because of people's protests and a developing country backlash against their exclusion in trade negotiations. ``Services'' include health and education, water and environment, energy and transport, food distribution and even government public service.

The 1994 GATS categories are:

  • Business; Communication (telecoms, postal, audiovisual)
  • Construction and related engineering services
  • Distribution
  • Educational
  • Environmental (water delivery, energy, refuse disposal)
  • Financial
  • Health related and social
  • Tourism and Travel related recreational, cultural and sporting
  • Transport (sea, air, rail, road)
  • and other
  • Hence every aspect of our lives is up for sale and every aspect of human needs and every form of human activity is being redefined as a tradeable service.

    The WTO has drafted clever language about GATS being a ``bottom up'' treaty rather than a ``top down'' treaty because a country can make commitments for trade liberation in different sectors through progressive liberalisation.

    Not a `bottom up' treaty

    A treaty that totally bypasses national democratic decision- making and excludes citizen participation can hardly be called ``bottom up''. To be truly `bottom up', the rules and subject matter of GATS need to first be discussed among local communities and regional and national parliaments. They then need to be amended on the basis of democratic feedback. Without such a ``democracy round'', GATS is not a `bottom up' but a `top down' agreement being forced on the people of the world. The fact that governments, as members of WTO, are putting the lives and securities of their citizens on auction to global corporations through GATS does not make the agreement legitimate or reflecting the will of people. GATS is impinging on issues of culture, resources and dispute resolution which under some national laws and constitutions are not under the jurisdiction of federal governments negotiating in WTO.

    The philosophy of GATS is the auctioning of vital resources and essential services and transforming them from fundamental rights of citizens to markets for global corporations. Through GATS, in effect our lives have been put up for sale. Global energy and water corporations such as Enron, Suez, Vivendi, health and education, businesses such as the health management organisations (HMOs) in the U.S are pushing for liberalisation of trade in services. Even mining and logging corporations are riding on the back of GATS. And corporations trading in hazardous waste are trying to use GATS.

    Water privatisation

    It is being argued that because this trade is already larger than trade in merchandise, service sectors should be commercialised and globalised. The promise is that services would be provided more efficiently and prices of essential services would reduce. But the experience of water privatisation in Bolivia, Puerto Rico and Argentina and energy privatisation in California and Maharashtra state in India shows that this is totally false.

    In Bolivia, when public water system was sold to Bechtel and International water prices increased so dramatically that people protested, six persons were killed, hundreds injured. Finally, the corporations were kicked out. In 1995, when water was privatised in Puerto Rico, poor communities had no water, while tourist resorts and U.S. military bases enjoyed unlimited supply. In Argentina, when Generale de Eaux got a contract for water delivery, prices doubled and quality deteriorated. The company was forced to pull out when people refused to pay their bills.

    The WTO briefing of March 16, 2001, entitled ``GATS: Fact and Fiction'' uses four arguments to allay citizens fears that GATS will lead to the dismantling of rights to water, health and education.

  • Art. 1 of GATS excludes ``services supplied in the exercise of governmental authority''.
  • GATS does not oblige countries to privatise or deregulate services.
  • GATS does not oblige countries to open up their markets. In what is termed the ``bottom-up'' approach to liberalisation, governments can choose which services they open up and to what degree.
  • GATS does not prevent countries tightening regulations or reversing previous decisions to allow service provision by foreigners.
  • Each of these responses is misleading.

    Article I of GATS is recognised as ambiguous and does lend itself to the interpretation that public services are candidates for privatisation and liberalisation if services are offered on ``commercial basis'' or ``in competition with one or more service suppliers.'' Since public services also have a fee, this could be interpreted as being commercial. Since there are always private actors in health, in education, this could be interpreted as being in competition. But small schools and private clinics are different from global corporations seeking trade liberalisation of services.

    The very fact of putting vital service sectors up for trade liberalisation in the GATS classification for commitments, and allowing the entry of corporations in sectors which were beyond commerce is forcing the Third World to lock its essential services and scarce resources into the violent and unjust dispute settlement and trade sanction system of the WTO.

    Robbed of freedom

    While WTO repeatedly refers to the ``freedom of countries'', its rules and rule-making processes rob weaker countries of freedom. Contrary to the propaganda that WTO rules serve the interests of the poor, the rules are rules of commercialisation - shaped and defined by powerful corporations to increase their power and profits.

    None of the WTO arguments respond to the citizens' criticism of the principle of marketisation of essential services enshrined in GATS. That remains the goal and objective of GATS. The WTO response is a weak attempt at allaying realistic fears of citizens by using speed of processes of implementation as an excuse to say the goals might not be reached. But the fact that a car can go off the road, or not start or start with delay cannot be used to deny the existence of a highway. GATS is the highway to the privatisation of our lives, and the highway leads in the wrong direction. That is the central issue of the debate on trade in services.

    How and when different countries start their engines to drive down this highway is a secondary question. That they might not start at the same time, or might have different models of cars will not change the fact that once they are on the road to liberalisation of services, all will reach the same destination - a destination where water, health and education cannot be guaranteed to all members of society because they are no longer rights provided through public services, but are commodities to be bought in the market place.

    The history of the Uruguay Round provides a good lesson of how issues that do not belong to WTO have been brought into WTO, issues that were never negotiated or accepted by the majority of members but were forced on them. TRIPs, agriculture, investment, services are not subject matters of trade - As the post-Seattle NGO Campaign stated, ``WTO needs to shrink or it will sink''. The U.S. and European Union pressure to commercialise essential services through GATS so that their corporations can make money out of the survival needs of the poor is a new wave of the genocide unleashed through WTO.

    Trade liberalisation of agriculture is killing thousands of farmers, the TRIPs agreement is denying cures to millions suffering from Malaria, T.B., HIV/AIDS. Instead of pausing and taking stock of the destructive impact of WTO rules of agriculture, written by and enforced on behalf of 5 grain trading giants and TRIPs rules made by the pharmaceutical and life sciences corporations, the WTO is rushing headlong into writing new rules on behalf of corporations wanting to control our water, our health, our education. That is why, as we move towards the next WTO Ministerial in Qatar in November, we will be organising and mobilising worldwide with the common call ``Our World is Not for Sale: Stop Corporate Globalisation''. GATS should be put into deep freeze. The future of services, and people's rights to water, health and education needs to be democratically debated within each society and country. Only after a ``democracy round'', in which ordinary people can take part, should issues be brought to WTO. Without democratic debate, WTO agreements have no legitimacy. The citizens' agenda cannot continue to be preempted by the corporate agenda and then forced undemocratically on people.

    Broad alliances consisting of the women's movement, the environment movement, the education movement, the health movement, the basic needs and anti-poverty movements, and the economic and social justice movements are joining forces to ``stop the GATS attack''. We should be grateful to WTO for offering us this wonderful opportunity through GATS for building solidarity across sectors and across the world.

    (The writer is Director, Research Foundation for Science, Technology and Ecology, New Delhi.)


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