WTO news: what’s been happening in the WTO

28 June 2002

Director-general of WTO and chairman of WTO services negotiations reject misguided claims that public services are under threat

Mike Moore, Director-General of the World Trade Organization and Ambassador Alejandro Jara of Chile, Chairman of the Special Session of the WTO Services Council, underscored today that WTO negotiations to liberalize trade in services were no threat to Government services and that such sectors of the services economy were in fact excluded from the negotiations.

Speaking ahead of an important series of meetings on services to be held next month, the two WTO officials stressed that encouraging competition through liberalization holds potential for great economic benefit particularly in developing countries. But they made it clear that every government has the right to exclude public services — including health, education and water distribution — from the negotiations and that it is for governments to decide which service sectors they wish to liberalize and which they do not.

“These negotiations are taking place within the legal framework of the General Agreement on Trade in Services and the negotiating guidelines adopted by Member Governments in March 2001. The GATS explicitly excludes government services from its scope and there is no question of changing those rules. The negotiating guidelines explicitly stress that each Member Government has the right to choose the sectors it wishes to liberalize. Government services supplied on a non-commercial basis by each of the 144 WTO Member Governments are explicitly excluded from the scope of the negotiations. This is a principle to which all Member Governments attach great importance and which none has sought to reopen,” said Ambassador Jara.

Director-General Moore said that in the coming days governments will make their first requests for market opening and that it was possible some governments could ask others to open public service sectors to foreign competition. But, he explained, that such requests do not constitute agreements to include such sectors as part of their commitments.

“People can and will ask for the moon during the request stage of the negotiations. That doesn’t mean they’ll get it. Decisions in the WTO are taken on the basis of a concensus of all member governments. Governments cannot be forced to undertake opening of their public services,” Mr. Moore said.

The Director-General added that the liberalization of governmental segments of sectors such as health and education has never come up in the discussions between governments. Even the liberalization of the commercial segments of such sectors has received little attention in the negotiations, he said. The focus of the negotiations has been on other services sectors.

“What is important about these negotiations,” he said, “is that they offer vast potential for raising living standards globally but especially in developing countries, many of which stand to benefit the most from further opening of services markets. In fact, 25 developing countries earn more than half of their total export income from services”.

As the negotiations enter the important stage of bilateral bargaining over market access, Chairman Jara stressed the need for public understanding based on clarity and objectivity.

“Each negotiating Government has the unequivocal right to choose which services it wishes to open to foreign competition and under which conditions and the right to regulate the supply of service in line with national policy objectives. And even for those services provided by governments on a commercial basis, there is nothing in the WTO rules which requires that they be privatized or liberalized,” he said.