Today’s Solutions: January 30, 2023

More and more people are turning against the sell-off of public services

Marco Visscher | March 2003 issue
All over Europe, thousands of people are rising up in protest against the lack of democracy and openness surounding a new trade agreement. The European Commission is currently negotiating GATS, an agreement on trade in services. The talks with other members of the World Trade Organisation (WTO) are shrouded in mist. Up until March 31, 2003 countries may indicate which sectors they want to have access to, and which sectors they wish to open to foreign corporations in their own country. But citizens, organizations and members of parliament who have asked the European Commission to indicate exactly which services are being talked about have received no reply.
GATS is a dry document, but its implications are as simple as they are far-reaching. Commercial and public services will be opened to both domestic and foreign corporations – if not today, then tomorrow. Once a sector has been privatized, national legislation will have to be rewritten to ensure foreign companies get the same treatment as domestic ones.
Not in your backyard? Think again. The following categories have definitely been opened to trade: education, healthcare, social security, communications, transport, construction, distribution, environmental services, financial services, tourism, sport, culture and recreation. In case negotiators have overlooked something, a ‘Rest’ category has been created. It includes, among others: energy, water, postal services, scientific research, architecture and rubbish collection. In short, GATS will have an influence on your daily life.
There is a fundamental difference between commercial and public services. The first category is based on the ability to pay, the second on a measure of need and equality, and is usually financed by taxes. Article 1 of GATS still declares a public service must be safeguarded from privatization. A service, however, is only regarded as ‘public’ when it has no commercial basis and no other party is involved. In practice, this regulation will hold no meaning whatsoever, except perhaps in North Korea or Cuba.
In several countries, public services, such as railways, have been partially or entirely privatized, which means that a domestic corporation takes responsibility off the government’s hands. GATS means that foreign corporations will also be allowed to enter the competition. Governments will be changing their laws with the intention, not of giving their nation’s inhabitants the best guarantee for access to water, healthcare and education, but of providing foreign investors with the best guarantee of offering their services as cheaply as possible. Critics of GATS argue that more privatization means that more and more people will be missing out, causing the gap between the rich and the poor – both within nations and outside of them – to grow ever wider.
The inhabitants of Cochabamba in Bolivia – to take a relatively well-known example – know all about it. After the government privatized water provision, the price of water went up and many people in remote areas no longer had access to water. But in other countries as well, experience with privatization is hardly favourable for people with little money to spend. In a number of countries, for example, where business has a large say in healthcare, access to it has become too expensive for large groups of people.
Small wonder then, that within the European Union curiosity has led to enquiries being made about which services are the subject of negotiations. But according to Pascal Lamy, European Trade Commissioner, it is ‘tradition’ not to give full insight during negotiations. In Red Pepper (January 2003), Susan George, Vice President of the action group ATTAC, responds furiously: ‘It’s traditional in some societies to stone women or electrocute criminals. That doesn’t make these practices right.’
To find out which services their government is ‘sacrificing’, in February 12,000 people took to the streets of Brussels. They consider it an ill omen that negotiations are taking place behind closed doors. As Worldwide (November 2003) writes: ‘It is absurd and hypocritical to ask our support for something we are not allowed to see.’ According to that magazine, GATS is making a fundamental division between economic interests and basic rights, in which the latter seem to be biting the dust.
In his book The Best Democracy Money Can Buy, the British investigative journalist Greg Palast puts it like this: ‘When Churchill said “Democracy is the worst form of government except all others,” he simply lacked the vision to see that the World Trade Organisation would design a system to replace democracy with something much better – Article VI.4 of the General Agreement on Trade and Services, or GATS.’ That article gives the WTO the authority to impose sanctions should governments, with laws, rules or procedures, cause ‘unnecessary restrictions’ of trade or services. Decisions regarding this issue will be made – once again – behind closed doors. Three trade experts will pass judgement. Trade unions, consumers and environmental and human rights organizations will have no say in the matter.
Although the European Commission is negotiating on behalf of the EU countries, European Parliament members are not participating in the present talks. They have to rely on leaked information to discover that, for example, the EU is determined to privatize most environmental services, energy, transport, and scientific research, as well as all post offices.
Caroline Lucas, one of the few members of the European Parliament who was granted a look at the documents, told journalists that she had to promise not to copy anything, that she had to keep the papers in a safe and shred them when finished reading. But according to her Socialist colleague Glynn Ford, Lucas should have no illusions. Ford believes that the majority of Parliament members are not really interested in, let alone informed about, GATS.
They might turn to, an initiative of the Corporate Europe Observatory and the Transnational Institute. The website closely follows the development of GATS. Founder Erik Wesselius hopes that the growing resistance will result in the European Commission not having enough support from national governments to complete the European list of services to be privatized. ‘The French might not co-operate, because they want to save their culture,’ Wesselius says. ‘But it may also finally dawn on members of parliament that the negotiations are a one-sided process, as developing countries are unable to keep up with the speed with which European countries are proposing to open their markets to European corporations. That would temporarily halt GATS’ progress.’
But more is needed to thwart GATS. ‘In certain sectors, privatization might not be bad,’ Wesselius admits, ‘but it would be a good thing if in the end certain essential sectors – such as the provision of drinking water and healthcare – were excluded from GATS. But I would be even more pleased to see international agreements that guarantee that people and communities in developing countries will be able to decide for themselves how they regulate their services. This is a different starting point. We are now assuming that privatization is beyond discussion, whereas we need to put something else beyond discussion. You might call it self-determination, you might call it democracy.’

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