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International Trade Union Statement on the GATS negotiations

Issue date


Trade in services comprises a huge share of total world output and employs hundreds of millions of workers. A key objective of an increase in trade in services should be to provide benefits for the users of services and for those employed in this sector and indeed in other sectors as well. However, there are growing fears that the present negotiations under the General Agreement on Trade in Services (GATS) could jeopardise access to vital public services and to other services of general interest for a large part of the world’s population. These services are too crucial to human well-being to be subject to private sector competition under WTO disciplines. Global Unions, the WCL, and the ETUC are calling for action in the following areas:

1. All parties to the current GATS negotiations should make it absolutely clear that public services (above all, education, health and essential public utilities) including at sub-national levels of government, and socially beneficial service sector activities are not a subject for negotiation. This would mean that the parties would not call on other governments to open up those sectors. To guarantee that this will remain the case, the next WTO Conference should amend as necessary the terms of the GATS agreement to exclude formally such sectors from all further GATS negotiations.

2. WTO agreements should not undermine the ability of governments to enact domestic regulations, legislation and other measures to safeguard the public interest. However, under present WTO rules, such measures could be subject to challenge at the WTO if they are perceived as constituting a form of trade discrimination. Explicit reference to the primacy of social and environmental concerns over the principle of ‘free trade’ as well as a fundamental revision or even removal of the ‘necessity test’ on regulationsis therefore required to ensure that all WTO members have complete freedom to execute domestic regulatory measures without the possibility of challenge through the WTO dispute settlement mechanism.

3. Countries must not be obliged to privatise public services against their will. Countries which make a commitment to open up their services sectors under the GATS must be able to take a future decision to increase the public sector role in these sectors, without any risk of a potential challenge through WTO disputes machinery or a need to offer some other services sector in compensation. The GATS agreement should include an explicit clause to exempt GATS commitments from the WTO disputes machinery in all cases where the public sector is concerned, so that foreign service suppliers would be unable to seek to use WTO disciplines as a tool to maintain market access. In addition, GATS negotiations should include the possibility of applying temporary safeguard measures to prevent a domestic industry from collapse (as already exists in GATT). More generally, the WTO ‘lock-in’ principle that has the effect of making commitments to open service markets ‘irreversible’ should not apply when the service market liberalisation has led to severe adverse socio-economic effects on the country and its population.

4. Article I.3 (b) of GATS should be clarified to make it absolutely clear that ‘the exercise of governmental authority’ allows, without threat of legal challenge, WTO members to exclude competition from public services and services of general interest.

5. WTO members should not open up other public services to international trade liberalisation:- where that would create a problem of insecurity in supply of the services concerned; where it would negatively affect the supply of services to disadvantaged regions, sectors or groups of the population; or where it might reduce government funding for other services (such as by undermining the principle of cross-subsidisation). Members should not submit requests for market-opening where it would lead to socially undesirable effects of this nature.

6. Article XIX of the GATS requires, for each round of negotiations, 'an assessment of trade in services in overall terms and on a sectoral basis'. Such an assessment has never been carried out. A full assessment of the social, environmental and economic impact of the GATS negotiations should therefore be conducted urgently. The relevant specialised agencies of the United Nations, including the ILO, should be involved together with trade unions and other representative organisations.

7. Regarding 'Mode 3' of the GATS on ‘commercial presence’ (i.e. investment), GATS negotiations should:- ensure that the interests of developing countries are fully taken into account; omit any provisions that give investors the right to challenge tax and regulatory measures; exclude investor-to-state disputes provisions; include company taxation; allow for the imposition of performance requirements especially as regards labour market provisions; ensure that foreign investments (and incentives to attract them) do not undermine core labour standards or environmental protection; and include binding references to the ILO Tripartite Declaration of Principles concerning Multinational Enterprises and Social Policy, and to the revised OECD Guidelines for Multinational Enterprises.

8. With regard to "Mode 4" (i.e. temporary cross-border movement of natural persons), negotiations should ensure:- protection of migrant workers against all forms of discrimination, and of the remittance of their contributions to social security and insurance schemes; observance of core international labour standards and national labour law; respect for existing collective agreements covering the sectors concerned; and the full involvement of the ILO.

9. Finally, GATS negotiations are too important to the public interest to take place under conditions of secrecy and without the involvement of parliamentarians and social partners. To ensure the maximum of transparency and democratic involvement, WTO members should publish after the submission deadline the access 'requests' they intend to make of other WTO members. Over the period leading up to March 2003, all WTO members should engage in a democratic process of dialogue concerning the 'offers' they intend to submit, and after that deadline all offer lists should be published.

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