new round of services negotiations will force WTO Member
countries to open all their services sectors to foreign
is quite untrue.There
is no obligation on any WTO Member to allow foreign supply of any
particular service—nor even to guarantee domestic competition, since
it is possible to maintain a monopoly supplier, whether public or
private, of any service.
are free to choose those services on which they will make commitments
guaranteeing access to foreign suppliers. Each Member must have a
national schedule of commitments, but there is no rule as to how
extensive it should be. Some least-developed Members have made
commitments only on tourism, for example, and in general there is
great variation in the coverage of schedules, reflecting national
policy objectives and levels of economic development. There is
agreement among all Governments that in the new round of negotiations
the freedom to decide whether to liberalize any given service and the
principle of progressive liberalization will be maintained.
services negotiations mean that all public services will have to
be open to foreign competition Back
public services are not provided on a commercial or competitive basis
and are not subject to the GATS. The Agreement excludes from its
coverage all services provided in the exercise of governmental
authority, which are defined in Article I:3(c) as those supplied
neither on a commercial basis nor in competition with other suppliers.
Since they do not fall under the Agreement, these services are not
covered by the negotiations and commitments on market access and
national treatment do not apply to them. This is a principle to which
all Member Governments attach great importance and which none has
sought to reopen. So far, Members have not expressed the need to adopt
an authoritative interpretation of the criteria in Article I:3(c).
They could obviously do so whenever they deem it desirable or
appropriate. Also, the issue could arise if a specific measure, which
had been challenged in dispute settlement, were to be defended on the
ground that it applied only to services supplied in the exercise of
governmental authority. There is no requirement to notify such
services which are provided on a commercial or competitive basis are
covered by the GATS, but there is nothing in the Agreement which
requires that they should be privatized or liberalized. Governments
are free to decide whether or not to make commitments on them, as on
all other services. If they make no commitments the implications of
GATS coverage are minimal: monopoly suppliers, whether public or
private, can be maintained, established or reestablished, for example;
limitations of any other kind can be imposed on foreign supply. If
they do make commitments they can exclude from them any activity where
foreign competition is unwanted and can schedule limitations on the
level of market access and national treatment committed.
virtually all countries the public provision of services like
education and health coexists with private-sector provision, and
Governments recognize that to ensure the universal availability and
the quality of these essential services is among their primary
responsibilities. Governments which make commitments to allow foreign
suppliers to provide education or health services in their markets are
not undertaking to privatize public healthcare or education systems.
Nor are they compromising standards: they can enforce the same
standards for the protection of the public on foreign suppliers as on
nationals, and can indeed impose additional requirements on foreigners
if they so choose.
of February 2001, less than 50 WTO Members have made commitments
on education or health, no doubt reflecting the fact that in many
countries these are regarded as essentially functions of the State. In
its proposal for negotiations on higher education services, dated
18 December 2000 and publicly available, the United States
recognizes that "education to a large extent is a government
function, but that most countries permit private education to co-exist
with public education. The proposal, therefore, envisions that private
education and training will continue to supplement, not displace
public education systems."
under GATS means deregulation of services Back
right to regulate is one of the fundamental premises of the GATS.
objective of the GATS is to liberalize services trade, not to
deregulate services, many of which are closely regulated for very good
reasons. The GATS specifically recognizes "the right of Members
to regulate, and to introduce new regulations, on the supply of
services within their territories in order to meet national policy
of the concern expressed about the implications of the GATS for
regulation derives from the fact that Article VI of the GATS provides
for disciplines on qualification requirements and procedures,
technical standards and licensing requirements with a view to ensuring
that they "do not constitute unnecessary barriers to trade in
of this kind have been drawn up for the accountancy sector, and can be
read on the WTO website (www.wto.org). They provide the best insight
currently available as to the likely outcome of further work in this
area. They do not set standards for the accountancy sector nor do
they provide for the review of national standards. Their main
purpose is to increase transparency, meaning access to information
about regulations, standards and procedures for licensing or obtaining
qualifications. The objective is to ensure that applicants are treated
with fairness and are given a chance to compete on an equal footing.
It has been agreed that the accountancy disciplines—which will come
into force at the end of the current round of negotiations—will only
apply to countries which make commitments on accountancy services.
accountancy disciplines say nothing about the level of professional
qualifications or standards for accountants except that they should
not be more trade-restrictive than is necessary to achieve the
legitimate objective they seek. This means that if
or more measures exist which can achieve the
one should choose the measure with the least restrictive impact on
trade. It does not mean that Governments would have to compromise the
level of quality or consumer protection they are seeking to achieve
through the regulation in question. WTO Member Governments and dispute
settlement panels have consistently held that it is for Governments to
choose the level of protection they want to achieve (for instance when
regulating for the protection of public health or the environment) and
that this prerogative is not open to challenge.
is often alleged that the WTO will start to
considered to restrict trade more than necessary. It has been
suggested that the results of this work will include, for example,
"reviewing the qualifications
we require of doctors, engineers and other professionals to ensure
they're not too high", and even that the WTO itself will set
standards. Professional qualifications will not be reviewed in the WTO.
The GATS does not involve setting standards in any context and does
not require Member
Governments to submit any legislation or regulation for review by
their trading partners. The only circumstances in which a country
could be asked to demonstrate that a given measure is not more
trade-restrictive than necessary would be in the event of a dispute
with another Member. Only then could the necessity or the trade
restrictiveness of a measure become an issue.
made, GATS commitments are irreversible Back
are always free to liberalize unilaterally without making commitments
in the GATS. However, GATS commitments have real value in providing
secure and predictable conditions of access to markets, which benefits
traders, investors, and, ultimately, all of us as consumers. This is
why so many Governments have chosen to make binding commitments in the
GATS framework, where they are intended to be legally secure.
GATS commitments, like tariff bindings, are not irreversible. There
are four ways in which a country can modify, suspend or even withdraw
a commitment if it finds that to be necessary.
commitment may be withdrawn or modified after it has been in force for
three years. On request, "compensation" may need to be
negotiated with Members whose trade is affected. This does not mean
monetary compensation, as some have alleged, but merely the
replacement of the commitment withdrawn by another of equivalent
value. This process is similar to the renegotiation of tariff bindings
under the GATT, which has been in use for 50 years.
in case of need the General Exceptions in Article XIV of the GATS
can be invoked, where it is necessary to act to protect major
public interests, including safety, human, plant or animal life or
health, national security or public morals. These exceptions
override all other provisions in the Agreement, entitling a
Government to violate or withdraw its own commitments if
under the WTO Agreement Governments may seek a temporary waiver
from any obligation.
is also possible for a Government to suspend commitments in the
event of serious balance-of-payments difficulties.
addition, negotiations are now in progress under the GATS on the
question of developing an Emergency Safeguard Measure, whose purpose
would be to permit the suspension of a commitment in case of damage or
the threat of damage to a domestic industry.
negotiations are secretive and anti-democratic Back
is frequently stated by WTO critics that the organization is
undemocratic, and that negotiations take place in secret.
is true that the GATS 2000 negotiations, like other negotiations in
the WTO, are taking place between Governments and that meetings are
not open to the press, the public or industry. But
are the representatives of their countries' interests as a whole,
and have a
legitimacy that the self-appointed spokespersons of special interests
can never have.
great efforts are made to publicize what takes place in negotiations.
Every negotiating session is followed by a briefing to inform
journalists, and through them the whole world. Representatives of
non-governmental organizations receive regular briefings as well, from
the WTO secretariat. Most importantly, the records
of meetings, the texts of all decisions and the proposals made by
Governments are available to the public. They are posted on the WTO
website, which contains over 11,000 pages of information and receives
roughly 250,000 visits every month.
is a vast body of public information, constantly expanding, about the
work of the WTO and the Secretariat is always ready to respond to
enquiries. A telephone call would have sufficed to correct the
misunderstandings which underlie most of the scare stories described
in this booklet.