GATS Resource Kit

1. GATS Resource Kit

2. Introduction • This kit has been prepared by unions in the New Zealand Council of Trade Unions who are concerned about the impact of GATS.

3. How to Use this Kit • Each of this kit’s five sections is a PowerPoint presentation that can be printed off to use as handouts, overhead transparencies or as a data show projection. There are more detailed notes below each PowerPoint providing further information to support a presenter. Some of the kit’s pages are hyperlinked so that presenters can move quickly to the parts of the kit that are relevant to them and ignore the other sections. • Resources such as pamphlets and form letters are available.

4. Resources in this Kit • This introduction • How GATS works • Examples of how GATS will affect your service • Campaign resources • Contact details for further information • The end

5. GATSThe General Agreement on Trade in ServicesA quick introduction to how it works Return to Contents

6. The WTO • GATS is one of a number of agreements under the World Trade Organisation (WTO) • The WTO and GATS were both established in 1995 • The WTO now has 144 member countries including Australia, Fiji, New Zealand, Papua New Guinea and the Solomon Islands. Samoa, Tonga and Vanuatu are all presently seeking to become members. Return to Contents

7. The goals of the WTO and GATS • To establish global rules for trade between nations • To ensure trade flows freely and predictably • To remove any restrictions such as government regulations that are considered to be ‘barriers to trade’ in goods or services. Return to Contents

8. The scope of GATS GATS limits governments from taking measures that inhibit free trade in services • What are services? • What is trade in services? • What are ‘measures’ taken by governments? • Are any services exempted? Return to Contents

9. Business Services (e.g. accountants, midwives) Communications Services (e.g. postal, telecomunications) Construction and Engineering Services Distribution Services (retail and wholesale shopping) Education Services (incl. professional standards) Environmental Services (e.g. water supply, sewage) Financial Services (e.g. insurance, banking) Health Related and Social Services Tourism and Travel Services (e.g. restaurants, travel agents) Recreational, Cultural and Sporting Services (e.g. libraries, museums, rugby) Transport Services And other services not included elsewhere What is a service? ‘Service’ includes the production, distribution, marketing, sale and delivery of that service. Return to Contents

10. What is trade in services? • How to ‘trade’ in services Services can be delivered • across borders (e.g. internet, call centres) • to consumers who travel abroad (e.g. students, tourists) • by foreign companies establishing a local presence (e.g. privatisation, takeover) • by personnel from overseas (e.g. consultants, skilled labour contracts) Return to Contents

11. What are ‘measures’ taken by member countries? • Each country is restricted from taking ‘measures’ which are considered barriers to trade of services. This includes measures taken by: • Central, regional and local governments and authorities • Non-governmental bodies exercising powers delegated by them (e.g. water companies, professional organisations) Return to Contents

12. Are any services exempted from GATS? • GATS does not cover ‘services supplied in the exercise of governmental authority’ • However a service supplied in the exercise of governmental authority is defined as any service which is supplied: • neither on a commercial basis, • nor in competition with one or more service suppliers • This does not exempt most public services such as post, schools, hospitals, water supply etc. Return to Contents

13. GATS Obligations • There are two types of obligations GATS member countries have: • The first set is top down or “general” obligations which apply to every service, whether a country has scheduled it or not. • Secondly, there are specific obligations which each country can choose to individually sign up to in their schedule. Return to Contents

14. General (“top down”) ObligationsThese apply to all services – whether scheduled or not • Most Favoured Nation Treatment • Transparency • Increased Participation of Developing Countries • Domestic Regulations • General Exceptions • Subsidies Return to Contents

15. Most Favoured Nation Status • MFN means that each member country must treat all other member countries equally favourably. • E.g Tonga could not choose to have free trade in health services with Samoa but not the USA. It must treat them both the same. Return to Contents

16. Transparency • All members must publish all relevant measures that effect their trade in services and inform the WTO of any changes to laws, regulations or administrative guidelines that will affect trade in services • They must respond promptly to requests for information from any other member country Return to Contents

17. Increased participation of developing countries • Developing countries will be ‘facilitated’ towards increased participation in trade of services by developing greater competition and effectiveness, improved access to distribution channels, and the liberalisation of market access in services of export interest to them Return to Contents

18. Domestic Regulations • Each country will establish and maintain administrative tribunals or procedures which provide for prompt review and appropriate remedies at the request of an effected overseas service supplier. • Each country will ensure that any measures it takes that affect foreign companies are ‘not more burdensome than necessary’ or act as ‘unnecessary barriers to trade’. Return to Contents

19. General Exceptions to GATS • GATS rules cannot be used to prevent measures: • Necessary to protect public morals or maintain public order • Necessary to protect human, animal or plant life or health • Necessary to prevent deceptive or fraudulent services • To protect individual privacy and confidentiality • Relating to safety • To collect taxes on traded services or service suppliers • To protect security interests Return to Contents

20. Subsidies • Subsidies are subject to GATS rules • WTO members recognise that sometimes subsidies have ‘distortive effects’ on trade. Members shall enter into negotiations to avoid such distorting effects • Any Member that considers it is adversely affected by a subsidy of another member can request consultations with that member and must be afforded sympathetic consideration Return to Contents

21. Specific Commitments • Each country draws up a schedule of services which they commit to open to trade • They can also list limitations on their commitments • If a particular service is specified in a schedule then it is subject to the following specific commitments: • Market Access • National Treatment • Additional Commitments Return to Contents

22. Part of a typical schedule These columns indicate limitations on those commitments MARKET ACCESS NATIONAL TREATMENT This column indicates sectors the country has committed to GATS • Limitations come in four modes: • Mode 1 -across borders • Mode 2 – to consumers who travel • Mode 3 – by foreign companies establishing a local presence • Mode 4 – through mobile personnel

23. Market Access • The following types of limitations are not allowed in committed service sectors • Limitations on the number of suppliers (e.g. number of universities, landfill sites) • Limitations on the total value of service transactions or assets (e.g. size of a tourist hotel in a sensitive location) • Limitations on the total number of service operations or on the total quantity of service output (e.g. number or size of suburban malls) • Limitations on the total number of natural persons that may be employed in a particular service (e.g. limiting the number of foreign actors in a film being shot in New Zealand) • Measures which restrict or require specific types of legal entity or joint venture to supply a service (e.g. requirement for joint venture with locals or local representation on a board) • Limitations on the participation of foreign investment (e.g. maximum foreign shareholding in a news media company)

24. National Treatment • Each country must treat foreign service suppliers no less favourably than it treats locally owned service suppliers • Foreign service providers may be treated the same or better, but not worse • The rules for foreign and local services do not have to be identical Return to Contents

25. Additional Commitments • Members can negotiate further specific commitments into their schedule if they wish! Return to Contents

26. Progressive Liberalisation • ‘Members shall enter into successive rounds of negotiations … with a view to achieving a progressively higher level of liberalisation’ Return to Contents

27. Modification of Commitments • A member can modify any commitment in its schedule once it has been in place for three years • First however it must negotiate a necessary compensatory adjustment to its other commitments that leaves allother members no less well off. • Compensatory adjustments are made on a MFN basis – every country is entitled to them • Any member that is not happy with this adjustment can refer the matter to arbitration to enforce its right Return to Contents

28. Dispute Settlement and Enforcement 1 • A member that breaches GATS may be reported to the WTO’s Council for Trade in Services • The council can refer the matter to binding arbitration • The guilty member will be required to make adjustment in its schedule that compensates for any benefit that other members could reasonably have expected to accrue if it were not for the breach Return to Contents

29. Dispute Settlement and Enforcement 2 • The case is heard in secret before a WTO panel of trade experts • If the government is found in breach of GATS rules the WTO can order that the offending measure be withdrawn • If the government refuses the WTO can authorise the complaining country to impose trade sanctions to the value of what that country’s services suppliers have lost or could reasonably have been expected to lose Return to Contents

30. Current GATS negotiations • The promised assessment of the impact of GATS prior to new negotiations has not occurred • WTO argues that the assessment is technically not possible • GATS negotiations began in 2000 and include changes to the agreement as well as new commitments • A full new round of negotiations began in 2001 at Doha and are due to complete in 2005 • Each country must make initial offers of further liberalisation by 31 March 2003 Return to Contents

31. Energy Broadcasting Post Distribution Education Tertiary Education Water Environment Health Tourism Local Govt Libraries and Museums Labour Rights Public Services and Privatisation Click on your sector for examples of how GATS could affect it How could GATS affect Maori? Click Here And, how does GATS affect Developing Countries? Click Here Return to Contents

32. Energy • Publicly owned or controlled energy providers could find the are in competition with foreign providers • Renewable energy sources could be exposed to full completion with non-renewable or environmentally harmful energy sources • Measures to limit energy consumption could be illegal Return to Services List Return to Contents

33. Broadcasting • Countries could lose the ability to have local content quotas on television, radio and movies. • They will not be able to nurture local creativity and talent • the public could be exposed to an increasingly homogenised and non-critical international media • Attempts to establish Maori television and radio will be undermined Return to Contents Return to Services List

34. Post • Courier companies could lode challenges against postal monopolies on delivering basic letters • Or in New Zealand’s situation this pre existing deregulation could be cemented in so that state owned postal services could not be reintroduced in the future • Postal services engaged in international competition will not be able to protect rural delivery costs Return to Contents Return to Services List

35. Distribution • GATS could lead to local shops increasingly being replaced with internet and telephone shopping. Jobs will be lost overseas. • Local towns could lose the ability to limit large mega stores moving in and driving out smaller local shops. It could limit the ability to restrict the supply and distribution of alcohol and tobacco. Return to Contents Return to Services List

36. Education • GATS may allow foreign franchise early childhood centres the same access to government funding as local community operated centres • Curriculum Resources with local content and issues will not be able to be able to be favoured over mass produced foreign curriculum resources

37. Education • Governments may not be able to decide which institutions can and cannot educate teachers or what standards they should be required to meet to register • Private schools may be entitled to funding on an equal basis to public schools • Policies that favour internationalisation over local culture and society will not be able to be repealed Return to Contents Return to Services List

38. Tertiary Education • Foreign tertiary education providers are given the right to treatment at least as favourable as domestic private providers – but the distinction between private and public has been blurred by funding and other changes during the 1990s. • Competition and privatisation will increase and be locked in, contrary to current Government policy.

39. staff and community representation on councils; restrictions on the presence of foreign owned institutions or requirements on their ownership; limits on the number of particular types of institutions such as the number of universities, either nationally or regionally; limiting the number of PTEs; limits on the number of institutions that can teach a particular subject either nationally or regionally; limits on the number of students undertaking a particular qualification; preferential access of domestic tertiary institutions to research grants and funding; regulatory requirements re quality of provision and qualification requirements. Tertiary EducationGATS could threaten: Return to Contents Return to Services List

40. Water • The European Union's leaked secret request calls for the opening up of trade in water for human consumption and waste water. • For cities with private water supplies, such as Auckland, this could prevent them regaining public ownership of their water. Large foreign companies could control entire water supplies with the sole motive making a profit of a city’s people Return to Contents Return to Services List

41. Environment • GATS could lead to a inability to limit the number of landfills or oil drilling platforms for instance. • It would inhibit government's ability to regulate environmental services so that people’s health, local jobs and the environment’s well-being is promoted ahead of short term profit. Return to Contents Return to Services List

42. Health • GATS may force public health to compete on a equal footing with private health care. This could lead to increased costs for patients and cost cutting by health care providers. • Not for profit trusts and charity groups that provide services like aged care and ambulances will be in direct competition with foreign companies. • Cultural safety training requirements in nursing may be considered illegal • Many health care services (I.e. dentistry physiotherapy and midwifery) are not even included under the category health care but business Return to Contents Return to Services List

43. Tourism and Travel • Local communities could lose their ability to ensure tourism is planned and accords to their community values • Foreign owned tourism companies may not be compelled to consider protecting local habitats and heritage. • Companies with monopolies on resources, such as whale watching, may be exposed to unfettered competition Return to Contents Return to Services List

44. Local Government • GATS potentially undermines local government rights to prefer local businesses and use rates to generate local jobs and income. • It could affect • Subsidising low income housing projects • Regulating casinos • Regulating pesticide spraying • Regulating public transport • Subsidising community economic development initiatives that give preference to local hiring and purchasing Return to Contents Return to Services List

45. Libraries, Museums and Sports • Government funding to important cultural and democratic institutions such as museums and libraries may be required to be shared with foreign for profit competition. • Increased deregulation of sports could see local sport stars moving overseas in greater numbers Return to Contents Return to Services List

46. Labour Rights • GATS will make it easier for foreign companies to contract out services work overseas, deliver services across borders over the internet and telephone, and even to bring service workers across borders • To the extent that GATS contributes to privatisation of government services, public sector unions are likely to be replaced with non-unionised workers with lower wages and fewer benefits • The GATS, like other WTO agreements, does not include any reference to ILO labour standards on child labour, discrimination, and worker rights. This sanctions trade without standards Return to Contents Return to Services List

47. Public Services and Privatisation • GATS could mean governments lose their ability to • Limit the number of suppliers or reduce competition to protect important monopolies • Regulate foreign competition requiring it to act in a certain way • discriminate in favour of local ownership over foreign ownership when privatising their services • Once in competition, public services find it hard to maintain universal quality and free services for their people Return to Contents Return to Services List

48. Maori and the Treaty • GATS rules treat everything as tradable commodity, undermining the treaty and core Maori values • Despite the treaty Maori have no say in GATS treaty negotiation or ratification • Maori commercial interests are currently protected from GATS but not non-commercial interests and concerns • Maori community building enterprises could be placed in direct competition with foreign companies Return to Contents Return to Services List

49. Developing Countries • The public service sectors of many countries in the Global South have already been gutted by the IMF and World Bank's structural adjustment policies which require severe reductions in public budgets and privatisation of public services and assets. This opens up opportunities for multinationals to provide these services on a for-profit basis. • Many people will be excluded from such essential services as health care, education, water and energy due to cost and lack of access. Under the GATS developing countries will not be able to turn back from the structural adjustment forced on them by the IMF and World Bank in sectors where they have made commitments. Return to Contents Return to Services List

50. Return to Contents