EC SERVICES REQUESTS ARRIVE EARLY

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EC SERVICES REQUESTS ARRIVE EARLY

Confidential documents prepared by the European Commission for the WTO negotiations on liberalisation of trade in services (GATS 2000) became public in mid-April. The public portion of the ECs preparations includes the draft country requests to be presented to WTO members. The text runs to more than a thousand pages in total.

The documents contain country requests that the European Commission is proposing to make for removing or adapting laws and regulations that restrict trade in services. The initial set of country requests targets 29 national jurisdictions, including the US, Japan, Canada, Mexico, Brazil, Egypt, China, South Korea and India. Additional country requests are expected to be in draft form in Brussels in early May. The draft requests will be put to the EU Member States for approval in May. According to the Doha Ministerial Declaration, WTO members will file their request lists before 30 June 2002.

Initial media reports and some NGOs took the hysterical view that the European Commission is demanding full-scale privatisation of public monopolies. More than one report suggested that the draft negotiating strategy had “provoked alarm among development campaigners who fear the ultimate goal is to push poor countries into privatising public services like health and education.”

However, the draft requests reflect nothing of the sort. To a large degree, the EC requests fall well within expected parameters for further liberalisation of service sectors, based on specific commitments made by the parties during the Uruguay Round.

There are in fact no sweeping requests for liberalisation of such highly sensitive sectors as health and education. In reviewing all 29 draft country requests, there is not a single request made regarding access to the educational services sector. In regard to the health and social services field, there is a single instance of a request made of Pakistan. However, it is more in the line of a technical classification matter than a request for liberalisation of the health or medical services market. Specifically, the EC requests that Pakistan’s commitments it made previously on the Medical and Dental Services Sub-Sector (CPC 9312) under Health and Social Services be brought under Professional Services.

Even on a sensitive sector in which European firms such as Vivendi have a significant stake in North American municipal water management services, the requests are modest. The EC seeks from almost all 29 countries commitments and clarifications regarding the temporary entry of persons supplying services associated with water services contracts. It is noteworthy that the contracts themselves are not in question. In addition, the EC makes almost universal requests associated with water in the field of environmental services.

Specifically, the EC seeks commitments related to water for human use and wastewater management (water collection, purification and distribution services through mains, except steam and hot water), and wastewater services (CPC 9401). There is no dramatic press for the privatisation of public services evident in the draft requests, not even in a sector like water services where European corporate interests are obvious. In effect, Brussels has no designs to negotiate for privatisation.

The documents also indicate that the EC intends to ask WTO members to liberalise the energy sector, banking, wholesale and retail, tourism, transport, and various other sectors.

EU officials have not disputed the validity of the leaked documents, but played down the proposals, saying they are still in the drafting stage and could be changed before they are officially submitted to the WTO in June. The papers are styled as “proposals” for the consideration of the 15 EU Member States, and are not yet the official negotiating position of the Union. Brussels did emphasise that the EU is not implying a willingness to bring the Common Agricultural Policy to an end in exchange for a substantial bundle of services liberalisation from its trading partners.

Meanwhile, on learning of the leak, the Canadian Department of Foreign Affairs thought it politic to play its longstanding tune - Canada's position is that health, public education and social services are not negotiable in the current GATS negotiation. What should perhaps be of more concern is that there are approximately 150 other federal and provincial measures targeted by the EC. There will be many months of federal-provincial and federal-NGO dialogue associated with the EC requests when they are tabled in Geneva in June.

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