1

Tribute to come

The 5th Ministerial Meeting of the World Trade Organiza-tion (WTO) in Cancun Mexico, September, 2003 marksa mid-point in the new round of negotiations of theGeneral Agreement on Trade in Services (GATS): A good time to take stock.

Services: almost everything we depend onNot long after the GATS was agreed, the then-head of

the WTO, Renato Ruggiero, declared that the agreementand its obligations “extend the reach of the Agreementinto areas never before recognized as trade policy. Isuspect that neither governments nor industries haveyet appreciated the full scope of these guarantees orthe full value of existing commitments.” 1

Because of this reach into domestic jurisdiction,because GATS includes families of services that involvevirtually every utility, and most aspects of daily life –health, education, transportation, financial services,libraries, food, recreation – and because it incorporatesa principle of “progressive liberalization”, i.e. greateropenness to foreign investment and control, it collideswith the exercise of democratic policy-making by citi-zens. Because it is so sweeping, it also collides withthe security and futures of people working in manydifferent sectors of society and dependent on manydifferent services, public as well as private.

Take stockPeople may find their citizenship radically undermined

by these negotiations. As some commentators haveput it, time to get off the fast-moving bicycle of tradetalks, and look around. When you do you “are likely toreact with shocked disapproval at how far, and in whatdirection, the proverbial bicycle has been driven.”2

Consider these questions:��Has my government’s negotiation position in the

GATS been made public, can I have access to it?��Has there been any research on the impact and

implications of the GATS on issues I’m interested inand can I have access to it? If not, is it possible toget support for such research? How can I informmyself?

��Is my governmental/parliamentary representativeaware of the negotiations, possible impacts andpublic concerns? What can I do, and with whom can Iact, to make them aware?

��Has my government/parliament or the media beensubject to pressure from foreign governments orcorporations regarding the negotiations? What can Ior others do to counter that pressure?

��Has my government/parliament considered alterna-tives to the GATS proposals generally or in specificsectors?

��Will there be sufficient time and information for thorough public debate and will my government/parliament consult fully with all those who may beaffected before any agreement is ratified by my country?

And before any these, perhaps ask a prior question,do I care who makes decisions about the services I, myfamily, friends or community depend on each day?

JOHN W. FOSTER

Ed i t o r

2

The General Agreement on Trade in Services:

Why Worr y

“If new restrictions on domestic regulation, now being negotiated inGeneva, were ever agreed to, they would constitute an extraordinaryintrusion into democratic policy making.”Fa c i n g t h e f a c t s : A g u i d e t o t h e GATS deba t e .

1 F r om an add r ess made t o t h e Con f e r en ce on Tr ade i n Se r v i c e s , B r u sse l s , 2 J une , 1998 , as quo t ed i n S co t t S i n c l a i r a nd

J im G r e i s habe r - O t t o , Fa c i n g t h e Fa c t s : A g u i d e t o t h e GATS deba t e . , Canad i an Cen t r e f o r Po l i c y A l t e r na t i v e s , O t t awa , 2002

www.po l i c ya l t e r na t i v e s . c a

2 I b i d . x i v

?

3

The EuropeanCommissionacknowledged that GATS is first and foremost aninstrument for thebenefit of business...with a single goal:pursuit of profit...

GATSJeopardizes

by Nancy Alexander & T imothy Kessler

Essential SERVICES

How

acce

ss

4

There are six ways in which the GeneralAgreement onTrade in Services(GATS) of theWorld TradeOrganizationjeopardizes theuniversal provisionof essentialservices. Not only health care,education andwater services are affected, but democraticprocesses as well.

UNTIL the GATS was born(January 1, 1995) the rules of thetrading system pertained to trade ingoods, not services. Where astariffs are the principal barriers totrade in goods, domestic laws andregulations are the barriers to tradein services.

The scope of GATS is breathtak-ing. It applies to any measure (e.g.,law, regulation) taken by governmentat any level, from central to local,which affects specified services. Atpresent, the GATS is one of severalagreements being negotiated in thecurrent (2000 to 2005) round ofWTO negotiations.

The purpose of the GATS is toprogressively liberalize trade in 160service sectors, such as financial,sales, legal, telecommunications,accountancy, and constructionservices as well as essentialservices including health care,education, water, and electricity.

Proponents of the GATS arguethat the Agreement will promoteeconomic growth by enhancingcompetition and efficiency. Theystress that the sectors subject tothe GATS rules will attract foreigndirect investment (FDI), three fifthsof which now goes toward services.(About 80% of FDI comes from multi-national companies located inNorth America, Europe and Japan.)However, UNCTAD declares that“There is no empirical evidence tolink any significant increase in FDIflows to developing countries withthe conclusion of GATS.” [1] GATSsupporters also claim that develop-ing countries will benefit from GATSprovisions that liberalize temporaryimmigration of “natural persons”who perform jobs in service sectors.However, such benefits will not mate-rialize without consent from industri-alized countries, none of which haveyet made significant commitments.

Here are some of the risks:1) Exclusion for public services?

WTO leaders dismiss, and evenridicule, claims that GATS willlead to the privatization of govern-ment services. They point to aprovision stating that services areexcluded from GATS jurisdictionif they are “supplied in the exer-cise of governmental authority.”Yet services meet this criteriononly when “supplied neither on acommercial basis, nor in compe-tition with one or more servicesuppliers.” This is rarely thecase. Proponents also cite thePreamble of GATS, which recog-nizes the “right to regulate.”However, this language is non-binding. Actual GATS provisionsmake it clear that regulationsare allowed only as long as theyare consistent with the Agree-ment. This judgment will bemade not by governments but byappointed WTO dispute settle-ment panelists. Finally, despiteWTO assurance that “we’re notafter your public services,” manycountries have already madeextensive commitments to liber-alize hospital, medical and dentalservices, health insurance, andhigher education under GATS.Moreover, the European Unionhas requested that 72 countriesliberalize their water distributionsystems. Thus, assurances that

exclusion5

the Agreement protects govern-ment services have already beenproven false.

2) Irreversibility. Where GATS hasjurisdiction over a service, it“locks in” sectors as they areliberalized, thereby making liber-alization practically irreversible.While reversing commitments istechnically permitted, govern-ments can only do so by negoti-ating “compensation” for allaffected partners – a prohibi-tively costly undertaking. Indeed,the WTO states that “becauseunbinding is difficult, [govern-ment] commitments [to a sector]are virtually guaranteed . . .” [2]This means that if subsequentevents reveal serious negativesocial or economic effects, itmay be too late to take correc-tive action.

3) Development impact. Histori-cally, governments have insistedthat foreign investors take stepsthat ensure benefits to localeconomies, such as establishingjoint ventures with domesticpartners; equity ceilings onforeign capital; or performancerequirements in areas such astechnology transfer, public serviceprovision; employment or trainingof local staff. Also, governmentshave sometimes used human

rights, labor or environmentalstandards as criteria for entry bya foreign company. Under GATS,governments could be barredfrom employing such means topromote local development.

Furthermore, if performancerequirements (or other condi-tions on investment) are waivedfor one foreign investor, theymust be waived for all investorsunder the most favored nation(MFN) rule, which requires govern-ments to treat service providersfrom all other member countriesin the same manner.

GATS rules could adverselyaffect local interests in two ways.First, under the national treat-ment rule, foreign corporationsmust be treated at least asfavorably as domestic companies,which may prevent governmentsfrom promoting local servicebusinesses. Under this rule,governments that subsidize theprovision of essential services(as most do) may be compelledto subsidize provision by multi-national corporations as well.Second, under the market accessrule, foreign service providersmust be granted virtually unre-stricted entry into the sector.They can set up as many opera-tions as they want, which mayundercut environmental andsocial goals. For instance, theenvironment may be degraded iftoo many tourism operatorsexploit a delicate ecosystem.

4) Constraining state autonomy.Under proposed rules on “domes-tic regulations,” member coun-tries might have to prove to tradedispute tribunals that their regu-lations (e.g., technical standards,licensing, and qualifications) arenot “not more burdensome thannecessary.” That is, burdensomeregulations will be deemed “trade

restrictive.” One expert says thathealth care licensing require-ments that restrict health carefees for poor patients may beviewed as trade restrictive, sinceit impedes profit-making andcould repel foreign investors. [3]If implemented, rules ondomestic regulations could havea “chilling effect” on the passageand enforcement of environmen-tal, labor and public health regu-lations. (See pg.6) The EuropeanUnion proposes that when aWTO member brings a claim tothe dispute panel body againstanother government, that panelcould apply a “necessity test” toregulations under challenge. TheWTO said that the purpose of anecessity test is to “balance twopotentially conflicting priorities:promoting trade expansionversus protecting the regulatoryrights of governments.”

The WTO has global, bindingenforcement powers that haveprofound political implicationsfor the sovereignty of nations.The WTO’s dispute settlementmechanism functions as a judi-ciary that hears complaints andestablishes binding judgments.When it finds a government inviolation of its rules, a tribunalcan compel a member nation tostrike down its own laws andenact WTO-compliant rules. Itspower to enforce economic sanctions may cause govern-ments to back away from imple-menting even potentially non-compliant regulation, regardlessof its social or economic utility.As well, the history of WTO rulingsin trade disputes shows a markedbias towards interpreting thebalance between regulation andtrade expansion to the benefitof business.

”“Liberalization of services poses serious

dangers for policy autonomy, development

as well as the quality and access of

services, especially for the poor.

6

5. Undermining Transparency andDemocracy. Byzantine negotia-tion processes are used toachieve a progressively higherlevel of liberalization. Each of theWTO’s 147 members can makerequests to other governmentsfor liberalization of specificsectors; in response to theserequests, member governmentsmake offers to liberalize selectedsectors. These negotiationsoccur in secret, bilateral meet-ings where the weakest countriesare often pitted against thestrongest. Moreover, the US andEuropean trade negotiatorsmake their requests based onpressure from corporate servicelobbies seeking expandedmarkets, not development goals.

Frequently, governments failto disclose draft or final copiesof requests and offers, whicheffectively excludes the publicand many elected officials atstate and local levels fromparticipation in decision-making.The EU’s requests were leakedto the public, revealing theirrequest for liberalization of waterdistribution systems.

6. Imposing Liberalization. GATSarchitecture is often said to be‘development-friendly’. Techni-cally speaking, it is true thateach WTO Member can choosewhich sectors to liberalize andwhat limitations to put on theliberalization process. It is alsotrue that certain articles of theGATS (articles IV and XIX:2) areintended to accommodate theneeds of developing countries.However, in reality, developingcountries are often subject tounyielding pressure to liberalize.

Writing Robert Zoellick, U.S. Trade Representative(March28, 2003) the California State Senate stated:

The proposed rules on ‘domestic regulation’ couldallow foreign corporations and governments tochallenge a wide range of California health careregulations as ‘more burdensome than necessary.’This could include nurse-to-patient staffing ratios,professional licensing standards and laws againstdiscrimination by licensed insurance companies onthe basis of genetic characteristics. Service rulescould also have devastating impacts on the envi-ronment by restricting the ability of governmentsto limit permits for oil drilling, land use and wasteincineration. Drinking water standards, pesticideapplication standards, renewable energy laws, andtoxic waste lawscould also bechallengedunder domesticregulation, aswell as nationaltreatment ormarket accessprovisions.

These impli-cations are verytroubling andstrike at theheart of ourability toregulate in thepublic interest.Recently leakednegotiatingdocuments fromthe EuropeanUnion (EU) reveal that the EU not only seeksmarket access to our service sectors, but explicitlyrequests future limits on state and local regulatoryauthority. These documents request that the U.S.open up a number of public services to trade bymultinational corporations, including drinkingwater, electricity, postal and sanitation services. Inaddition, they request the limitation of state over-sight of insurance, the extension of small businessloans to foreign companies and the limitation ofapproximately 44 specifically identified state laws.

…in spite of the

magnitude of these

requests, neither state

nor local lawmakers nor

the public have been

granted access to these

documents.

3The Ca l i f o r n i a Sena t e

Speaks Out

“

”

Donors and creditors, such asthe International Monetary Fund(IMF) and World Bank, areincreasingly promoting sectorliberalization and privatization.The IMF often exerts pressure bychoking off subsidies for publicservices.[4] In many instances,the donor and creditor communi-ties agree to starve public sectorservices of external support.[5]The World Bank and the regionaldevelopment banks have adoptedPrivate Sector Development (PSD)Strategies that introduce a thirdgeneration of structural adjust-ment programs (SAPs) to promoteliberalization of investmentregimes and the privatization ofbasic services.

In each service sector, thedonor and creditor communities,often led by the World Bank, arepromoting competition for provi-sion at commercial rates. Ifgovernments fail to comply, theycould lose critical financing, tradecredits, and debt relief. Donorand creditor communities arelaying the foundation for subject-ing each service sector to GATSdisciplines. Sometimes industri-alized countries exert directpressure on developing coun-tries, as when the EU stipulatedthat unless developing countriesliberalize their banking and insur-ance markets, the EU will notenlarge market access for devel-oping countries’ agricultural,textile and clothing products.[6]

ConclusionThe GATS expands the rights andprotections of corporate investors.By expanding the reach of globalinstitutions with legally bindingauthority over national policy deci-sions, transnational corporationsseek to replace the complex role of

the state with a single goal: pursuitof profit. The European Commissionacknowledged that GATS is “firstand foremost an instrument for thebenefit of business, and not onlyfor business in general, but for indi-vidual service companies wishingto export services or to invest andoperate abroad.” The main organi-zations representing these firmsinclude the European ServiceNetwork, and the U.S. Coalition ofService Industries, a 67-memberlobby organization whose top 12members had combined revenuesof about $700 billion in 2000. (See www.corpwatch.org andwww.polarisinstitute.org )

Developing countries needservices, particularly to meet theMillennium Development Goals(MDGs), such as reducing thenumber of people living in povertyby half by the year 2015. Reachingthese goals involves massive scal-ing up of health care, educationand water services. However, theMDGs should not be a pretext forprivatizing essential services, espe-cially if the privatization occurswithout the consent of citizens andtheir elected officials.

What can be done?WTO member governments must bepersuaded to take – “carve out” –essential services from the negotia-tions. State or provincial and localgovernments should be clearlyexempted from the jurisdiction ofthe GATS.

Governments must make thenegotiating process transparent.Part of that effort will require even-handed analyses of the impact ofliberalization in different sectors,particularly social and sovereigntyimpact assessments of the applica-tion of GATS rules.

Public service commitmentsmade under GATS must not beirreversible. Governments shouldinsist on safeguards that enablethem to measure negative socialimpacts from liberalization, specifya “trigger level” for applying safe-guards, and respond with regulatoryand subsidy actions that may notbe WTO-consistent .

Nancy A l exande r i s f o unde r a nd

d i r e c t o r o f t h e C i t i z e n ’s Ne two r k on

Essen t i a l Se r v i c e s

(www. cha l l e n geg l o ba l i z a t i o ns . o r g ) , a nd

f o r me r l y wo r ked w i t h B r ead f o r t h e

Wo r l d a nd a s a L e g i s l a t i v e Ad vo ca t e f o r

t h e F r i e nds (Quake r ) Comm i t t e e on

Na t i o na l L e g i s l a t i o n ( U .S . )

T im Kess l e r, Resea r c h D i r e c t o r w i t h t h e

Ne two r k , f o r me r l y wo r ked on t h e

Pove r t y a nd Soc i a l Impac t Ana l y s i s

( PS I A ) manua l f o r t h e Wo r l d Bank .

1 . UNCTAD , “A Pos i t i v e A genda f o r

Deve l o p i n g Coun t r i e s : I s sues f o r F u t u r e

Tr ade Nego t i a t i o ns ,” 2000 .

2 . WTO, “ Tr ad i n g I n t o t h e F u t u r e ,” o n -

l i ne gu ide to the WTO Ag reements , 1999.

Quo t ed i n S . S i n c l a i r a nd J . G r i e shabe r -

O t t o , Fa c i n g t h e Fa c t s , Canad i an Cen t r e

f o r Po l i c y A l t e r na t i v e s , 2002 , p . 34 .

3 . Gou l d , E l l e n , “ Tr ans A t l a n t i c

Consume r D i a l o gue ( TACD ) Backg r ound

Pape r o n Tr ade i n Se r v i c e s ,” O c t obe r

2002 . T h i s p ape r c i t e s t h e j u d gmen t o f

P r o f . Dav i d L u f f a t a Wo r l d Bank/OECD

Con f e r en ce i n Ma r ch 2002 , p . 13 .

4 . Ne l l i s , J o hn , “P r i v a t i z a t i o n i n

A f r i c a : Wha t h as happened? Wha t i s

t o b e done? ” Cen t e r f o r G l o ba l

Deve l o pmen t , Working Paper Number 25,

Februar y 2003.

5 . Dubash , Nav r o z K . , Dan i e l Bou i l l e ,

A l i x C l a r k , e t a l . , Powe r Po l i t i c s : E qu i t y

and Env i r o nmen t i n E l e c t r i c i t y Re f o r m ,

Wo r l d Resou r c es I n s t i t u t e , 2002 .

6 . UNDP, He i n r i c h Boe l l Founda t i o n ,

Rocke f e l l e r B r o t he r s F und e t a l . ,

“Mak i n g G l oba l Tr a de Wo r k f o r Peop l e ,”

Ea r t h s can , 2003 . 7

8

the

GATagenda

Commer¢e

by Meri Koivusalo

&Hea th:�

Benefit or threat Benefits attributed to the GeneralAgreement on Trade in Services(GATS) are largely based on theassumption of positive effects fromcommercialisation and the liberali-sation of service provision. Despitethese assumptions, in health,education and social services thereis little if any evidence of any effi-ciency gains and benefits fromprivatisation of service provision,including effects which would resultin substantial long-term savingswhile not compromising the equity,continuity and sustainability ofservice provision.

This article primarily treats healthissues in the context of trade inhealth services, but it is importantto highlight that health policy issuesraised by the GATS do not relatemerely to the health and socialservices sector, but also to regula-tory measures in other sectors,such as advertising of tobacco,alcohol and infant foods.Grieshaber-Otto and Schacter havedrawn attention to the role of GATSin alcohol policies(1). Alcohol maybecome an issue in the context ofcurrent GATS requests as exemp-tions and monopolies of alcoholrelated services are challengedduring the negotiation process. It is thus important to rememberthat GATS is a broad agreementand covers all kind of services thatcan potentially relate to health andhealth policies. While there arehealth-specific sectoral committ-ments, one can also find health-related services under severalother categories. The most impor-tant are financial services (e.g.health insurance), distributionalservices (e.g alcohol and medi-cines) and professional services.

GATS and privatizationAs public attention and sensitivityare drawn to the GATS negotiations,it may be that the progress of priva-tization will be halted. At the momentit is more likely that the EuropeanUnion and the United States willseek the continued opening ofmarkets in so called ‘sensitivesectors’ as health, education andsocial services through bilateralinvestment treaties rather than inthe multilateral GATS. It is also likelythat GATS requests will be increas-ingly made by the developing world.

The negotiation of trade agree-ments follows the policy agenda ofother organisations, such as theOECD, World Bank and IMF, in ensur-ing that liberalization reforms takeplace within countries. The OECDpromotes such changes at anational level and makes GATSpossible through opening servicesto trade and pre-adjusting countriesto the new regulatory environment.

In the developing world, the roleof the World Bank and the IMF is topromote governance and sectoralreforms which lead to more tradableservices. In terms of privatisationof services, the role of the GATSagreement is currently more limitedand so far lacks clout in importantareas of negotiation such as govern-ment procurement, rules of domes-tic regulation and competition poli-cies. This does not mean that it isirrelevant in the process of liberal-ization, just that focussing on GATSwill not give one full answers as towhy and how countries have priva-tised their service provision.

The relevance of the GATS agree-ment is also more long-term in theways in which the regulatory envi-ronment of public policy changesand more essentially in the ways it 9�

S

The issues GATS raises for health canbe clearly seen in the various fields ofhealth services; however, as this articlepoints out, there are several relatedsectors that could be affected as well...

may lock in committments to priva-tization. Reversing in GATS is in prac-tice difficult, although not totallyimpossible, and new or unfinishedGATS agendas include competition,government procurement anddomestic regulation.

GATS and equityIn health systems the regulatoryaims of governments may and oftenshould differ greatly from the needsof foreign investors, especially ifequity in access and public financingof services is of importance. Thismeans that any one regulation isnot good enough and that someregulatory measures - such as thoseto ensure efficiency, cost-contain-ment, quality in service provisionand access to services on the basisof need rather than ability to pay -may be far more difficult to enact ina more commercialised environ-ment than other regulatorymeasures related to competitionand business interests. GATS tendsto enhance the rights of the commer-cial actors in comparison to govern-ments. As the agreement representsmore regulation of governmentactivities for the sake of marketopportunities, it is simply not appro-priate to the aims of public healthsystems and policies.

The GATS special provisions forpublic and non-profit service havealso been promoted as a tool topromote health and equity in coun-tries with already privatised services.However, it is rarely recognised thatin practice governments are able tomake these decisions withouttaking on GATS committments.Exemptions for public services orrequirements for non-profit statusalso become problematic in prac-tice. It is crucial to realise that

such exemptions tend to be time-limited and that under the GATSgovernments run the risk of theirhealth policies being locked into amultilaterally-determined frameworkdriven by export and trade interestsand having limited opportunities tobe altered if the policies prove tobe disadvantageous.

Public health: something morethan an economic indicatorHealth services have other morevital purposes than contributing tothe growth of the Gross DomesticProduct (GDP). It has been arguedthat health tourism (GATS: mode 2)and the export of health personnel(GATS: mode 4) could be the way inwhich developing countries benefitfrom international trade in healthservices (2). However, this point ofview tends to consider healthservices mostly in the context oftrade and the possibilities ofincreasing GDP. Health serviceshave other more vital purposesrelated to the well-being of wholepopulations, including providingquality care and providing preven-tive and promotional services toincrease wellness.

The GATS focus on generatingGDP easily leads to a bias in priori-ties and to ineffectiveness in serviceprovision within the health systemas a whole. There is also a risk thatenhancing markets, profit incentivesand health tourism in developingcountries increases the risk ofproblematic operations, createsblack markets in organ transplantsand contributes to the loss ofexpensively trained and vitally-needed health professionals.

In the case of India, with signifi-cant privatization of health services,even relatively positive evaluations

of the GATS process show thatthere have been adverse effects onthe public health care system andon equity, and that benefits havebeen limited to the affluent urbanpopulations (3).

Educating health professionals isrelatively expensive, and many devel-oping countries have a substantiallack of skilled personnel. The exportof an educated health workforcemay appear to be a desirableoption for developing countries,however in reality it has been aproblem for many developing coun-tries – one that may signficantlyincrease in the context of GATS. Ithas been estimated that 56% of allmigrating physicians come fromdeveloping countries and that thefigure for nurses is likely to behigher. Among doctors it is oftenthe categories that are in shortsupply which migrate to other coun-tries. Although skilled labour tendsto go to the industrialised countriesin the North, there is also a consid-erable South-South flow (4). The‘brain drain’ of skilled work force isproblematic even when these10

workers send remittances backhome. In the case of highly educatedwork force the value of remittancesremains lower in comparison toskills and capacities lost.

Keep health out of the GATSThe simple conclusion seems to bethat most countries would benefitoverall from keeping their healthand social sectors outside of GATS.Governments should exercise thefreedom to manage and regulatehealth services, including relatedmatters like insurance, in the inter-ests of their own populations. Theyneed not prohibit foreign investmentor trade, simply maintain their auton-omy from the GATS in managing thesector.

From a health policy perspective,this kind of approach is the advis-able one. But autonomy can’t belimited to health services. It needsto affect and regulate a variety ofother measures, including advertis-ing, research and development,distributional services (i.e. medi-cines and alcohol), intellectualproperty (medicines and patents),

etc. Governments need to be alertto ensure that the fullest scope ofthe GATS exemption of publicservices is recognized and coversany present and possible futureservices they might wish to maintainin the public sphere.

In domestic regulation necessitytests, proportionality or pro-compet-itiveness requirements should beavoided in health and healthservices. Additional clarity shouldbe sought in terms of the role ofnon-profit agencies and subsidiesto local organisations and theirwork. [see our publications section]GATS stipulations and possiblefurther negotiations on governmentprocurement, competition andinvestments should not limit theoptions of governments to supportand subsidize local civil society andcommunity organisations in healthand social care. These issuesconcern developed as well as devel-oping countries, even though theEU and the US have made theirown exemptions to cover subsidiesto poverty reduction programmesand services of general interest.

Finally, the GATS negotiationstend to take place between repre-sentatives of trade and industrydepartments of governments and inthe context of export interests andcapacities. However, the impact ofnegotiations goes far beyond theseinterests into the very social fabricof nations. Debate over the implica-tions of trade negotiations needs tobe opened up, made transparent,and taken out of a context limitedto the competitive interests ofnational or corporate economies.It is thus important to ensure thathealth and social policy concerns oftrade agreements are discussedbroadly and in relation to the diverse

implications of policies. Trade nego-tiation is a political process andWTO agreements are negotiatedagreements, not natural laws.Trade rules, even if agreed interna-tionally, cannot override the legiti-mate concerns of governments forhealth and social security.

Mer i Ko i v u sa l o i s a s en i o r r e sea r c he r

i n G l o ba l i sm and Soc i a l Po l i c y

P r o g r amme (GASPP ) i n S TAKES , F i n l a nd .

T h i s a r t i c l e i s d r aws t o a l a r g e e x t en t

f r om po l i c y b r i e f s by GASPP

comm iss i o ned by t h e F i n n i s h M i n i s t r y

o f Fo r e i g n A f f a i r s . T he b r i e f i s av a i l a b l e

f r om t he GASPP webs i t e :

www. s t a kes . f i / g aspp as a s ho r t e r

v e r s i o n . A l o n ge r v e r s i o n w i t h s e ve r a l

p ape r s on g l o ba l s o c i a l g ov e r nance

(Deacon B , O l l i l a E , Ko i v u sa l o M ,

S t ubbs P. G l o ba l So c i a l Gove r nance .

T hemes and P r o spec t s . Hakapa i no ,

He l s i n k i , 2003 ) c an be o r de r ed f r om

GASPP : m i nna . i l v a@s t a kes . f i o r f r om

the M i n i s t r y o f Fo r e i g n A f f a i r s o f

F i n l a nd .

1 ) G r i e shabe r -O t t o , J a nd S chac t e r N .

Impac t s o f t h e s e r v i c e s t r e a t y o n t h e

hea l t h - b ased a l c oho l r e gu l a t i o n .

No rd i s k a l koho l& na r ko t i k a t i d s k r i f t ,

o n l i n e : www. s t a kes . f i / na t /na t01/n r. 3/

eng l i s h / ga t s . h tm . 2001 :18 :3

2 ) UNCTAD. I n te r na t i ona l t r ade i n hea l t h

se r v i c e s : d i f f i c u l t i e s and oppo r t u n i t i e s

f o r d e ve l o p i n g c oun t r i e s . UNCTAD

TD/B/COM1/EM .1/2 .7 Ap r i l 1997 .

GE 97 - 50672 . Geneva , 1997 .

3 ) Chanda R . Tr ade i n h ea l t h s e r v i c e s .

CMH Wo r k i n g pape r s e r i e s . PApe r n o WG

4 :5 . Comm iss i o n on Mac r oe conom i c s

and Hea l t h , Geneva . 2001 .

4 ) Adams O , K i nnon C . A pub l i c h ea l t h

pe r spec t i v e . I n Z a r i l l i S , K i n non C ,

( e ds . ) I n t e r na t i o na l t r a de i n h ea l t h

se r v i c e s . A d eve l o pmen t p e r spec t i v e .

UN I TED NAT IONS/UNCTAD and WHO,

Geneva . 1998 . 11

”

“In the case of India... evaluations ofthe GATS process show that therehave been adverse effects on the publichealth care system and on equity, andthat benefits have been limited to theaffluent urban populations.

12

The

toRIGHTCHOOSE

by Goh Chien Yen

WHETHER AND TO WHAT EXTENT TOLIBERAL IZE IN SERVICES – a debate

THERE is no legal require-ment or compulsion under the WTOand its current round of servicesnegotiations for developing countriesto commit themselves in the GATSto liberalize their services sectors.Developing countries should thusexercise their legal right to becautious about further liberalizationin the WTO, especially if they havenot yet carried out an assessmentof the effects or do not yet have anational services plan or strategy.

This caution and advice was givento developing countries during anexpert panel discussion at theUNCTAD Commission on trade ingoods, services and commodities,by a panellist, Mr. Martin Khor,director of the Third World Network

The panel on “Trade in servicesand development implications”,held on 4 February, comprisedUruguay’s deputy foreign ministerMr. Guillermo Calle Jaimes, SouthAfrican academic Mr. James Hersh,UK trade and industry departmenteconomist Mr. P. Dodd, SingaporeAmbassador V.G. Menon, the direc-tor of the WTO secretariat divisionon services, Mr. Abdel-HamidMamdouh and Mr. Martin Khor.After extensive discussions, UNCTADtrade division director Lakshmi Purimade concluding remarks.

All the panelists agreed thatservices comprise an increasinglyimportant sector in developing coun-tries, constituting a high proportionof Gross Domestic Product (GDP)(about 50% for developing countriesin 2001 and higher in some of them,66 percent in Singapore andUruguay).

Martin Khor said that in additionto the contribution to GDP and jobs,the services sector also had to be

well managed as it provided forpublic needs such as health careand water and had a major effect onfinancial stability and the balance ofpayments. What is of importance todeveloping countries is that theservices sector contributes tooutput, growth, employment andprovision for basic needs.

Trade in services should only bea means and not an end, and shouldbe properly managed if negativeeffects are to be avoided. Discus-sion and negotiations on servicestrade should thus be located in thelarger context of development.

Negotiating in the darkThe developing countries are

facing some serious problems relat-ing to the WTO’s General Agreementon Trade in Services (GATS) and thecurrent negotiations.

Firstly, there is the lack of dataon services trade, especially asthey pertain to the WTO servicesframework…, The inadequacy ofdata makes it difficult or impossiblefor developing countries to assessthe effects of past or future liberal-ization. As described in that book,this creates a negotiating situationakin to developing countries “chas-ing a black cat in a dark room,blindfolded”.i

The lack of data also made itimpossible to fulfill a GATS condi-tion, that there be a proper evalua-tion of effects of services liberaliza-tion, before embarking on newnegotiations. It also hinders effortsto develop safeguard mechanismsagainst the negative effects of liber-alization on developing countries.

GATS is inherently imbalanced asdeveloping countries have far lesscapacity for services productionthan the developed countries.

Even if market access wasincreased, most developing coun-tries could only benefit little due tosupply constraints as well as anti-competitive and monopolistic struc-tures that act as barriers to entryto the developed countries’services markets....

On the other hand, inappropriateand over-rapid liberalization couldcause a range of problems for devel-oping countries, such as financialinstability (resulting from openingup financial markets to the vagariesof capital flows and speculation),displacement of local firms and netjob losses by the entry or expansionof foreign service providers, andsignificant net foreign exchangeoutflows due to profit repatriation offoreign firms (which also mainlyprovide for the local markets andthus do not earn much foreignexchange for the host countries).

Khor continued, stating that theNGO community was increasinglyconcerned that the combination ofprivatization (often under loan condi-tionality) and liberalization wasleading to higher prices of essentialservices, thus hampering thepeople’s access to water, electricity,health care, etc. There have beenprotests in many developing coun-tries against this trend. Empiricalstudies involving more than 30countries conducted by SocialWatch, a NGO, show how the liberal-ization and privatization of essen-tial services have left consumersworse off.

The GATS architecture is oftensaid to be ‘development-friendly’.However, whilst each WTO Membercan choose to commit which sectorsto liberalize, when and to whatextent, in reality the developingcountries face tremendous � 13

In February, 2003, the Commission on Trade of the UnitedNation Commission on Trade and Development (UNCTAD)

held a discussion on the implications of liberalization inservices. This report on the debate was prepared by Goh Chien

Yen, for the South-North Development Monitor.

commercial and political pressuresto liberalize, and once they commitin the GATS they would be unableto “backtrack” unless they canafford to pay compensation.

Typically, developing countries donot have a comprehensive servicesdevelopment plan or strategy, nor acoordinating Services Ministry, andthus they are unable to makeinformed decisions such as onoffers and requests in the WTOnegotiations. Khor urged UNCTADto assist developing countries indeveloping such plans and strate-gies, as well as in the negotiations.

Developing countries, hestressed, have the legal right todecide whether or not to committhemselves to further liberalizationin any sector, and to what extent.This right is further strengthenedby provisions such as Articles IVand XIX of GATS and reaffirmed inthe Guidelines and procedures forservices negotiations of 28 March2001.

He said that developing countriesshould fully exercise this right,including the right not to liberalizefurther unless or until the countryhas developed a proper plan, isalready prepared to face increasedcompetition, has in place the pre-conditions for successful liberaliza-tion, and is thus comfortable tocommit itself in the GATS process.

A cautious approach is advisable,Khor advised, since it would be difficult to reverse a commitmentin GATS once it is made. Countriesthat believe it could benefit fromliberalization in a particular sectorcould do so autonomously withoutnecessarily committing itself inGATS, and thus be able to judgethe wisdom of its action and alsohave an opportunity to reverse it to

some extent or fully, should there benegative effects…

Khor noted that in the currentrequest-offer process, the devel-oped countries had made veryheavy demands on developingcountries to open up fully or to agreat extent in a wide range ofservices. He urged the developedcountries not to put pressure onthe developing countries to accedeto their requests, but to leave thedecisions wholly to the developingcountries. The latter should feelfree to make their choices fully inline with national policy objectivesand not feel they are obliged toopen up, simply because requestshave been made. Each developingcountry should be able to decidefor itself the extent of liberalizationin each sector, and whether or notto bind this in GATS. This flexibilityin GATS should be fully respected…

The Uruguayan deputy foreignminister Guillermo Calle Jaimessaid that developing countriesshould not only be defensive in theservices negotiations but take anew pro-active approach in submit-ting requests. He noted, however,that developing countries face problems such as lack of analyticalcapacity, and scant statistics. Thedata produced by agencies includ-ing the IMF are not adequate, headded.

South African academic JamesHersh stressed that the WTO nego-tiations should open up access indeveloped countries to profession-als from developing countries asMode 4 was the most importantsource of services trade for thedeveloping countries.

For a developing country an appro-priate strategy would be to enterthe services market of neighbouring

countries first, and then the regionand finally the developed countries…

Abdel-Hamid Mamdouh from theWTO secretariat said that in thedecade after concluding the GATSnegotiations, “we know more nowabout services but it is humbling asthe more we know the more thereis to know.”...

He pointed out the differencebetween liberalizing services underGATS and deregulating services,and stressed that Members shouldexercise their right to regulateservices…

Working people on the move:Mode 4 of the GATSMr. Roman from the Common-

wealth Secretariat said liberalizationof movement of natural personswould bring the most benefit topoor people in developing countries,14

”“A cautious approach is advisable,

since it would be difficult to

reverse a commitment in GATS

once it is made.Mar t i n Kho r

citing a study showing that if theOECD countries allowed a 3 percentquota of its labour force to foreign-ers, the benefits would be 150percent more than all liberalizationof goods combined.

The Morocco delegate referred toKhor’s emphasis that developingcountries have the flexibility tochoose the extent of liberalizationcommitments and said since Dohathe African countries face manyproblems… So it is no surprise thatAfrican countries are unable to fulfilthe negotiating datelines.

The Uganda delegate agreedthat it is in the best interests of

developing countries to exercisemaximum caution in making commit-ments in their GATS schedules.…Another delegate from Ugandaadded: “The LDCs are caught in apoverty trap. Commodity priceshave collapsed. Due to liberaliza-tion, most LDCs ended up withdeindustrialization, many local firmshave closed. Due to subsidies inrich countries, even our farmers arethreatened by cheap agriculturalimports. In view of all these prob-lems – the poverty trap, commodityprice collapse, deindustrialization,farmers going out of business,workers retrenched - what candeveloping countries do sothat their services sector can beboosted?”

The Bangladesh delegate saidLDCs had little chance to benefitfrom market access in mostservices such as banking, and thushad little prospect from trade inservices. He agreed that the bestbenefit could come from movementof labour. ...

The European Commission dele-gate thanked UNCTAD for its veryvaluable document on services.She said that that the points madeby Khor on the importance of havinga development policy need to bestressed…The EC stressed thatgovernments retain the right tosupply services, it is a decision foreach government to make, and thisis linked to the issue of universalaccess to services.

The representative of ICFTU (TheInternational Confederation of FreeTrade Unions) criticized thecomplete lack of transparency inthe offers and requests beingmade by the countries. Given thefar reaching impacts of the GATSnegotiations, this has to beaddressed immediately.

UNCTAD’s Director of the Divisionon International Trade in Goods,Services and Commodities,Mrs. Lakshmi Puri, in concludingthe panel session… said that whatmany panelists and participantssaid had reinforced the view thatdevelopment is the end objectiveand trade is only the means, andtrade liberalization is one of theaspects of trade… As mentioned bythe LDCs, there should be anassessment of the negative impactof services liberalization, includingwhen this is also done underadjustment programs.

The o r i g i n a l r e po r t was pub l i s hed i n

TWN I n f o Se r v i c e on WTO I s sues

( Feb03/2 )

www. twns i de . o r g . s g / t i t l e / twn i n f o8 . h tm

15

”“GATS... a negotiating situation akin to

developing countries “chasing a black

cat in a dark room, blindfolded”.

i S ee Chak r ava r t h i Raghavan i n h i s b ook Deve l o p i n g c oun t r i e s and se r v i c e s t r a de : Chas i n g a B l a c k Ca t i n a Da r k Room ,

B l i n d f o l d ed . ( TWN , Penang , 2002 ) ,

WHILE high-level negoti-ations have moved to forest, spaand island resorts, and the repres-sive wake of reaction to theSeptember 11, 2001 attack on theWorld Trade Centre appeared tomarginalize popular mobilization,the globe-girdling mobilization ofcitizen outrage about the war onIraq, February 15, 2003 demon-strates that public resistance hassurprising potential.

Trade negotiations are complex,secretive and have a highly techni-cal dimension. But they are essen-tially political, not technical, affairs.Decisions are frequently made innegotiations which if put to peopleby a political party in an electionwould lead to far-reaching debateand on occasion outrage.

Democracy is diminished whendecisions of this scope are made insecret and presented as a fait-accompli with little opportunity fordebate, amendment or participationin decision.

Public knowledge, engagementand reaction to the current round oftrade, investment and service nego-tiations is building. Here are someof the elements:

TransparencyIn July, 2003, civil society organi-

zations launched the Cancun

Democracy Challenge, questioningthe lack of democratic practice andbasic transparency within the WTOitself. The decision-making processof the organization should be radi-cally reformed to encourageinformed, democratic decisions.www.focusweb.org/civil-society-call/

Environmental and many otherorganizations have campaigned fortransparency regarding documentsand negotiations since the WTOwas founded in 1995.

ResearchStung by the negative effects of

bilateral (FTA) and regional (NAFTA)trade agreements, Canadian tradeunions joined with cultural, health,student, development and environ-mental groups to form a researchconsortium – the Trade and Invest-ment Research Project (TIRP) –which would serve all of them bymonitoring and analyzing tradenegotiations. Each group mustcontribute some research. Togetherthey sponsor investigations whichhave resulted in several books andbriefing papers, elicited detailedresponses from both the TradePolicy Committee of the Organiza-tion for Economic Cooperation andDevelopment (OECD) and the WTOitself. The results of TIRP’sresearch serve the public educationand advocacy work of its members,but are quoted and referred to byinterested organizations in manycountries and institutions.

Third World Network providesongoing coverage of negotiations inGeneva, books and issue papers.www.twnside.org Regional networks

like the Southern and EasternAfrican Trade Information and Nego-tiations Institute (SEATINI) issueregular informative bulletins.www.seatini.org

Engagement with governmentofficials & parliamentsThe World Development Movement

in the UK has been campaigning onGATS since November 2000. WDMhas engaged significant numbers ofMPs in both the UK and ScottishParliaments. They have pushed forparliamentary inquiries into theimplications of the GATS.

The campaigns in the UK led theDepartment of Trade and Industryto tell business that their position onliberalization of services was weak,and “was vulnerable when NGOsasked for proof of where the econo-mic benefits of liberalization lay.”

OXFAM’s EU office has remindedthe EU that when GATS was launcheda review of its impact on develop-ment was promised before any newnegotiation. The review has nothappened. Thus OXFAM has joinedin a call for a moratorium until ittakes place.

Public information and policyresponsesThe Social Watch network 2003

report The Poor and the Market,focuses on essential services andthe experience of privatization indozens of countries, a feast of casestudies,www.socialwatch.org. TheCommonwealth, in its process ofcivil society engagement withCommonwealth Finance Ministers,sponsored a multi-country event in16

Is Change PossibleThe defeat of the proposed Multilateral Agreement onInvestment in the late 1990s was evidence of theemergence of a diverse network of civil societyorganizations, linked in increasingly coherent networks byglobal gatherings and e-communication. The streetmobilizations which led to and from the Seattle Ministerialof the World Trade Organization was credited, in part,with the failure of the Ministerial itself.

Action?

Taking

Brunei, considering the experience ofprivatization of water, hydro electricand other services. African activistsand academics met in May in Accra,to confront the corporate scramblefor Africa’s water, and the role of theIFIs in compelling privatization.www.brettonwoodsproject.org

MobilizationUtilizing occasions as large as

the World Social Forum and asmodest as church hall meetings insmall communities, activist networkshave enlarged the sectors andinterest groups who have beenalerted to trade negotiations andthe GATS. Public debates in coun-tries as diverse as Thailand andMexico, the Philippines and Indiaare being organized. With the collab-oration of regional and national civilsociety, farm and labour groups inMexico, demonstrations and otherpublic activities confront the WTOMinisterial in Cancun.

The diverse reach of the GATScalls for an equally diverse mobi-lization of groups that are or will beaffected by the negotiations, whetherits parents concerned with publicdaycare, poor communitiesconcerned with access to water andsanitation, or librarians concernedfor public access to information.

Consider an example: WhyWater?The GATS covers many items,

many families of items. Not least

among them is water. As researcherEllen Gould notes, “the EuropeanCommission has taken the mostaggressive position on the liberaliza-tion of water services of any WTOmember.”1 The EC comments“further liberalization of this sectorwould offer new business opportuni-ties to European companies, as theexpansion and acquisitions abroadby a number of European watercompanies show.”2 Behind the ECdrive are the ambitious of Frenchwater giants Suez and Vivendi, theUK-German RWE-Thames and others

“One vision, put forward by majorcorporations trying to make a buckon water services, and their govern-mental allies, is that water is avaluable commodity to be controlledby the market. The other seeswater as a basic human and environ-mental right, to be protected bycommunities and people aroundthe globe.”3

The United Nations SpecialRapporteur on housing, MiloonKothari outlines what rights arethreatened by water privatization:��With an emphasis on profits and

cost recovery, rate increasesoften ensue.

��The World Bank and IMF urge“unbundling” of services, so thatprofitable sectors go to the privatesector and the state and taxpay-ers are left with the unprofitableelements like infrastructure,sewage treatment or services topoor settlements.

��Privatization often leads toreduced access by the poor tobasic social services.

��Privatization can reduce account-ability and local control. Corpora-tions are accountable to theirshareholders. Contracts are oftenmade behind closed doors.4

In 2000, in the streets ofCochabamba, Bolivia, fought fortheir right to water at an affordableprice and force their government torescind a privatization contract witha foreign corporation.5

Governments could be challengedover any provisions they make whichprivilege domestic water servicesuppliers. Further, under the GATS,conservation of national resourcesis not recognized as a permissiblereason for breaching the agreement.6

Popular response is developingto protect access to water as apublic resource. A global alliance ofconcern has taken form in the BluePlanet project, aimed to protect theworld’s water as part of the globalcommons.www.blueplanetproject.net/englishMeanwhile in the United States,Public Citizen has initiated “Waterfor All: Campaigning to keep wateras a public trust.” www.citizen.org

Defending water as a global publicgood illustrates both the challengeof the GATS and the potential fororganizing international alliances inthe public interest.

17

1 E l l e n Gou l d , “Wa t e r i n t h e Cu r r e n t Round o f WTO Nego t i a t i o ns on Se r v i c e s ” , B r i e f i n g Pape r Se r i e s : Tr a de and I nv es tmen t ,

4 : 1 , J anua r y, 2003 , Canad i an Cen t r e f o r Po l i c y A l t e r na t i v e s , O t t awa , Canada .

2 Eu r opean Comm iss i o n , “Open i n g Wo r l d Ma r ke t s f o r Se r v i c e s : A Gu i de t o t h e GATS” ,

h t t p : / / ga t s - i n f o . e u . i n t / ga t s - i n f o / gu i d e . p l ? Menu=cc c - 8

3 Ho l l y W r en Spau l d i n g , “Bus t i n g t h e Wa t e r Ca r t e l ” , Sand i n t h e Whee l s , 180 , 02 J u l y, 2003 . A t t a c . h t t p : / /a t t a c . o r g

4 M i l o on Ko t ha r i , “ P r i v a t i s i n g human r i g h t s – t h e impac t o f g l o ba l i z a t i o n on adequa t e hous i n g , wa t e r a nd san i t a t i o n .” , So c i a l

Wa t ch Repo r t 2003 , Mon t e v i d eo , Soc i a l Wa t ch , 2003 . www. so c i a lwa t c h . o r g

5 See Tom K r use & Cec i l i a Ramos , “Wa t e r a nd p r i v a t i z a t i o n : d oub t f u l b ene f i t s , c on c r e t e t h r ea t s .” I n Soc i a l Wa t ch Repo r t 2003 ,

Mon t e v i d eo , Soc i a l Wa t ch , 2003 . www. so c i a lwa t c h . o r g

6 Gou l d , “Wa t e r…”

18

Civil society groups from Africa,Asia, Latin America, Europe, Canadaand New Zealand met in Nairobifrom 27 - 29 May 2003 to study,analyse and exchange views on theimpact of neo-liberal globalisationspecially on the south manifestingitself in the General Agreement onTrade in Services (GATS) and theforthcoming WTO Ministerial Confer-ence in Cancun.WTO is not justabout imports and exports of goods,but increasingly is encroaching onpeople’s democratic control overand access to resources and ongovernments’ abilities to regulatesocial and economic policies andformulate human development.

The GATS represents a powerfuland totally unacceptable instrumentthat limits policy space and restrictspopular access to services whichare essential to people’s livelihoodsand economic development.Africanand developing countries are beingforced through GATS to adopt poli-cies that have had negative impactson people and communities.

GATS-type liberalisation in sectorssuch as water in South Africa andGhana, electricity in Indonesia and

California, public broadcastingservices in New Zealand, rail in theUK and financial liberalization thatcaused the crisis in East andSouth-East Asia are real experiencesthat disprove the alleged benefitsput forward by the proponents ofneo-liberalism, i.e. IMF, World Bank,WTO, donor agencies and corporateinterests.

We civil society organisationsoppose GATS, existing commitmentsand attempts to adopt furthercommitments.

We therefore call upon developinggovernments to:1. share all necessary information

and documents, and work withtheir civil society to develop poli-cies that meet the needs of theircitizens.

2. to promote, protect and reclaimthe southern policy space, toreview, with a view to withdraw,current commitments andtherefore not to make any newcommitments in current GATSnegotiations. There is noevidence to prove that GATS willattract productive investment.On the contrary, the developingcountries lose whatever littleshare they currently have.

3. to share relevant informationamong themselves and to worktogether in order to increasetheir negotiation capacity toavoid being bullied in multilateraland bi-lateral forums.

Further to this, we call upon northerngovernments to stop manipulatingand abusing bilateral and multi-lateral processes.

We commit ourselves to continuebuilding global solidarity in ourcommon struggle against corporate-driven, northern imposed policyagendas. We also reaffirm ourcommitment to networking amongstourselves in order to make surethat our governments protect theinterests of their people.

Signatories:Action Aid, Uganda, Alternative Infor-mation and Development Centre,South Africa; ARENA, New Zealand;Business Watch, Indonesia; Centerfor International Environmental Law,Switzerland; Consumer InformationNetwork, Kenya; EcoNews Africa,Kenya; 11.11.11, Belgium; Equa-tions, India; Food Rights Alliance,Uganda; Gender and Trade Networkin Africa; Institute for Global Justice,Indonesia; Institute of EconomicAffairs, Kenya; International Genderand Trade Network, Asia; LawyersEnvironmental Action Team, Tanza-nia; MWENGO, Zimbabwe; PolarisInstitute, Canada; REBRIP, Brazil;SEATINI, Uganda; SEATINI,Zimbabwe; SodNet, Kenya; TanzaniaGender and Networking Programme;Third World Network Africa, Ghana;Trade Watch, Kenya; and WorldDevelopment Movement, UK.

From the :SEAT IN I Bu l l e t i n : S t r eng then i ng

A f r i c a i n Wo r l d Tr ade Vo l ume no 6 .

Fo r mo r e i n f o r ma t i o n and subsc r i p t i o ns ,

c on t a c t SEAT IN I , Ta ku r a House , 67 - 69

Un i on Avenue , Ha r a r e , Z imbabwe .

Te l : +263 4 792681 , E x t . 276 & 341

Te l : +263 4 251648

Fa x : +263 4 788078

Ema i l : s ea t i n i . zw@undp . o r g

www. sea t i n i . o r g

Nairobi c iv i l society declarat ion on the General Agreement on trade in services (GATS)

NGO

In May, civil society groups from north and south, gathered in Nairobi todiscuss the impacts on the south of GATS and the forthcoming WTOnegotiations in Cancun. Below is their declaration on GATS:

REP RTS

“”

The GATS represents a

powerful and totally unacceptable

instrument

19

For years NGOs have argued thatmember states fail to deliver onthe commitments they makethrough the UN system. This failurehas exacerbated a North/Southdivide, which has been characterizedby double standards, hypocrisy andincoherent and contradictory poli-cies. Confidence in the UN isfurther undermined by the currentcrisis which finds these fault-lineswidening in a geopolitical climatecharacterized by unilateralism,selective multilateralism and the‘war against terrorism’. At theconsultation, discussions focusedon civil society’s ability to confrontthis crisis and to envisage reformof multilateral systems of the UN,the Bretton Woods Institutions andthe World Trade Organization. Civilsociety advocates found it difficultto counter-balance these institu-tions in the face of national andinternational policy regimes thatreinforce northern dominance andsouthern submission.

Several representatives of NGOsbased in the global South stressedthat UN processes have providedcitizens an unparalleled opportunityto challenge their governments toprioritize social and economicprogress. They saw the weakeningof the UN system as having seriousimplications for organizations repre-senting groups that are adversely

affected by corporate globalization(women, youth, the elderly, the poor).

The context within which globalcivil society confronts power politicshas been most clearly illustrated inIraq. Most representatives at theconsultation wanted to supportprogressive movements in the USand to help combat the paranoiathat is becoming entrenched in USsociety. It was acknowledged thatthe systemic problem of unilateral-ism will not disappear with aregime change in the US. Thus it isessential to integrate considerationof the looming economic crisis thatmay be associated with imperialover-expansion. Ironically one ofthe greatest foes of multilateralismwas seen to come from within civilsociety itself. Participants in theconsultation were concerned aboutthe growing influence of corporate-funded think tanks, which havegained NGO status in the US andare becoming increasingly vocal inmultilateral forums. Since theseforums have been characterized bynegotiation, it was seen as crucialto prevent unilateralism frombecoming permanent policy.

The consultation also consideredwhether or not CSOs find theMillennium Development Goals(MDGs) campaign a meaningfultool. The MDGs were seen to notbe prescriptive about policies,

which places them in a better lightthan prior global development‘contracts’. However, it was arguedthat the MDGs lack the kind ofprecision inherent in economic goalsand have been established withoutthe existence of any mechanism inplace to guarantee fulfillment ofpromises. The UN DevelopmentProgramme (UNDP) is now targetingmuch of its campaign activity at thenational level where the debate mustcentre on causes and consider whatthe MDGs mean in the nationalcontext. MDG campaign advocatesa the consultation hoped to addressweaknesses in the goals and tailorthem so they can be achieved atthe national level.

There was a perception amongparticipants that the MDGs do notaddress root causes or basic needs.NGOs were also afraid that theycould be co-opted or limited by MDGstructures, as many donors seemto regard the MDGs as an easycatch-all formula for developmentalsuccess. Some suggested that thecampaign could be used positivelyby organizations pursuing a ‘policycoherence’ agenda to ensure thatPoverty Reduction Strategies are inline with the MDGs and to challengenorthern governments to meet theirside of a global partnership fordevelopment. However, severaladvocates stressed that countries

THE CRISIS IN GLOBAL GOVERNANCE:Chal lenges for the United Nations and Global Civi l Society

J O H N K N OX C E N T R E , G E N E VA , S W I T Z E R L A N D, 4 - 6 J U N E 2 0 0 3Sponso r ed by t h e Un i t e d Na t i o ns Non -Gove r nmen t a l L i a i s on Se r v i c e (NGLS )

by M. Fel ic i ty Daly

Senior representatives from over 50 non-governmental organizations workingaround the world recently attended an NGLS consultation on the crisis inmultilateral governance and the challenges that face civil society. From this meeting, several strong voices emerged, offering both warnings and possibilities for reform of the UN system.

�

20

NGO Repor ts cont’d

should retain theirright to set theirown developmentagenda and thatCSOs must continueto work on alterna-tives to address thesystemic factors creat-ing poverty.

The consultation wasparticularly concerned withthe UN Secretary General’sappointment of a high-levelpanel to conduct a “sweepingassessment of interaction betweenthe UN and civil society organiza-tions, and recommendations forimprovements.” The Coordinatorof the Secretariat of the panel,John Clarke, and a panel member,Kumi Naidoo, Secretary-General ofCIVICUS, discussed the backgroundof the review and outcomes fromthe first meeting of the panel. Thereview emerges from the UNsystem’s inability to come to termswith the ‘political hot potato’ of theadvocacy role that civil society hasplayed in UN processes. Within theUN system there is a concessionthat the attention that CSOs havegiven to UN processes has beencritical to the UN’s survival. Thepanel is developing consultationmechanisms including a widelydistributed survey to canvass civilsociety perceptions of UN relations.Panel members will seek input atexisting civil socety gatherings aswell as conduct a few key focusgroups. Their draft report will becompleted early in 2004 andsubmitted to the Secretary Generalby April for his review beforepresentation to the General Assem-bly in September 2004.

Many at the consultation weredeeply skeptical of the review, given

that several member states seek tolimit civil society participation in UNprocesses. They cautioned that thereview could be used to that enddespite the good intentions of panelmembers. Mr. Clarke and Mr. Naidooresponded that there is indeed arisk in opening this up for analysis.Several participants held the opin-ion that if the review is not beingproperly resourced in terms of timeand a series of specific consulta-tions, then it is not worth pursuing.Overall there was considerableunease about the timing of thisprocess coinciding with the emer-gence of overt attacks on the legiti-macy of the UN.

No concrete set of short term orlong-term strategies to cope withthe crisis in global governanceemerged from the heated discus-sions held a the consultation.Perhaps this demonstrates thatcivil society’s strength lies in itsdiversity of viewpoints rather thanits ability to present a unified voice.It may in fact be this ‘cacophony’that the powers that be find most

challenging aboutthe nature of CSOengagement in themultilateral system.We have thus farenjoyed a consulta-tive or advisory place

at some tables. Wemust now ask

ourselves what it takesto be effective in fostering

reform that delivers on thepromises for economic and

social development. Ultimately it isthe responsibility of governmentsand civil society to reform the UN,the Bretton Woods Institutions andthe World Trade Organization.

M. Fe l i c i t y Da l y i s P r o j e c t O f f i c e r f o r

t h e I n t e r na t i o na l Counc i l o n Soc i a l

We l f a r e .

No t e : f o r f u r t h e r i n f o r ma t i o n abou t t h e

consu l t a t i o n , c he c k :

www.unsystems.org/ngls/english/default.html

Within the UN system there is a

concession thatthe attention

that CSOs havegiven to UN

processes hasbeen critical to the UN’s

survival.

ICSW welcomes contributions

wor ldwide for inc lusion in

th is sect ion. P lease avai l

yourself of the opportunity of

informing the international

communi t y o f your soc ia l

development initiatives and

expertise through the Social

Development Review . For

contact information, please

refer to inside cover page of

this issue.

EDITOR’S NOTE :

21

GovernmentREP RTS

Development Agenda of theMillennium Summit, the MonterreyConsensus and the JohannesburgAction Plan intended. And I urgethe world to find its way back to thegood start we made on the newmillennium, when we set ourcompass clearly on a developmentcourse. Let me put it this way: Afterall the debate on the UN SecurityCouncil Resolution 1441 regardingthe disarmament of Iraq, we shouldnow concentrate all our efforts on,and provide the necessary financialmeans to implement, resolution55/2, i.e. the Millennium Declara-tion, which enjoys broad legitimationby all member states of the UN. �

Excerpts f rom theStatement ofHeidemar ieWieczorek -Zeul ,Federal Minister for Economic

Cooperation and Development, at

the High-Level Meeting of the

ECOSOC of the UN, Bretton Woods

Institutions and World Trade Orga-

nization, New York, April 14, 2003

This year’s high-levelmeeting of the Economic

and Social Council of the of UnitedNations, the Bretton Woods Institu-tions and the World Trade Organiza-tion is all the more important atthis time when their joint missionand our common vision – of fosteringsustainable human developmentand peace for all – must be putback at the top of the internationalagenda.

At a time like this, the originaltask for which the United Nationswas founded, namely to savemankind from the scourge of war,is more important than ever. Howis it possible that billions of USdollars can easily be mobilized forwar where as for the fight againstthe biggest enemy poverty millionsare not given. We should make acampaign: everybody knew SecurityCouncil Resolution 1441 and every-body wanted to have it implemented.I demand that UN Resolution 55/2will be implemented with the sameinternational vigor. In this resolu-tion the UN General Assemblyagreed to halve poverty in thewhole world by 2015.(*)

The international community cannow focus on bringing humanitarianassistance to the needy population.Our international efforts must now,of course, be focused on relief forthe people of Iraq and later on thereconstruction and development. Inorder to establish a stable, democ-ratic and peaceful order in Iraq, whatis needed now is a resolution ofthe Security Council to give the UNa clear mandate for the reconstruc-tion process. I fully endorse theSecretary-General’s approach tothe matter.

At the economic level, we areconcerned by the impact of the warin Iraq on the world economy. Themost recent figures suggest that,again, the developing countries willsuffer most from the further declineof economic growth rates as justforecast by the IMF and from lowlevels of foreign investment. TheHighly Indebted Poor Countries(HIPCs) in particular will face evenmore difficulties in implementingthe ambitious programs they havedeveloped in order to benefit fromsubstantial debt relief. On the polit-ical level, we have to channel allour efforts now into a return to theprevention of war. The world needsto prevent war. It does not need socalled “preemptive wars”. They areagainst international laws. We are,however, currently in danger of enter-ing a new arms race. Already, wehave seen a rise in world-wide armsexpenditure, from US$761 billion in2000 to US$839 billion in 2002.

…If there is a just war to befought, it is the war on poverty andhunger, illness and disease, illiteracyand environmental degradation,exclusion and injustice. This battleagainst want and fear is what the

Ger

man

yThe war on Iraq threatened to rupture the United Nations and diverted huge resources,energy and attention for the challenges of peaceful and sustainable humandevelopment. The annual high-level meetings of the major multilateral organizationsare a relatively new occasion for a comprehensive discussion of development. Thisaddress is particularly timely. (headings have been added to assist the reader)

“ if there is a justwar to be fought,

it is the war onpoverty and

hunger, illnessand disease,illiteracy and

environmentaldegradation,

exclusion andinjustice.”

22

which has our support, focusesspecifically on governance and isvery promising. Bilateral and multi-lateral efforts are, of course,assisting with these endeavors.

German development co-operationhas now developed specificstrengths in supporting democraticand good governance and publicsector reform, as this is now oneof our top sectors of bilateral co-operation. And I welcome thefact that the UNDP, for instance,now invests an important amountof its funds into fostering democra-tic governance.

In the spirit of partnership andjoint action, the German govern-ment is also actively approachingthe business community. Ourpublic-private partnership schemeencourages concerted actionbetween official development co-operation and private companies.We further support the exchange ofgood practices through the GlobalCompact Learning Forum.

Good global governance: aneconomic “security council”?Good domestic governance has

to be matched by good globalgovernance, i.e. inclusive and trans-parent international rules andprocedures. The German govern-ment has been supportive [ofstrengthening] the developing coun-tries’ say in international negotia-tions. We will continue to campaignfor a comprehensive approach thatwill greater involve the developingcountries in the decision-makingprocess within the internationalfinancial institutions. Still ourprospective is: a UN SecurityCouncil for Economic Policy. Try toget IFIs , UN, WTO to fulfill thesame principles in the practice oftheir responsibilities. With a

special emphasis on internationaltrade relations, we are working forfurther reforms that will promote afair and inclusive internationalsystem.

It is for this reason that we arecontributing to the Doha Develop-ment Fund for trade-related techni-cal assistance. I have always said,in concert with others, that we needto make the Doha round into adevelopment round that genuinelyreflects development countries’interests and lives up to theirexpectations…

I would like to make a specialplea for rapidly solving the problemunder the TRIPS agreement, thusgiving developing countries accessto vital medicines - as had beenpromised in Doha in November2001.

Ladies and gentlemen, with aview to world trade and beyond, Ihave a hope: that in the years tocome, Doha should be remem-bered not as the headquarters ofallied forces in war, but rather asthe birthplace of a true develop-ment round. The world’s attentionis on us; at the end of the day ourchildren and grandchildren willjudge us on whether we shapedworld affairs in a responsiblemanner and whether we havecontributed to a more just worldorder. Today this means primarilyreturning to the principles of theMillennium Declaration, theMonterrey Consensus and theJohannesburg Plan of Action.

The f u l l a dd r e ss c an be f o und a t :

www. ge r many - i n f o . o r g /UN/a r c h i v e /

speeches/2003/sp_04_03 . h tm l

( * ) Reso l u t i o n 1441 o f t h e UN Secu r i t y

Counc i l ( 8 Nov. , 2002 ) s t a t ed t h e

Un i t e d Na t i o ns pos i t i o n on t h e

d i s a r mamen t o f I r a q . Reso l u t i o n 55/2

o f t h e UN Gene r a l A ssemb l y ( 8 Sep t . ,

2000 ) i s t h e M i l l e nn i um Dec l a r a t i o n .

Multilateral partnershipThe German government is firmly

committed to the principles of multi-lateralism, the peaceful resolutionof conflicts and enhanced develop-ment efforts. Sustainable develop-ment and international solidarityare high on the government’sagenda following its re-election inautumn last year.

In line with the EU commitmentat Monterrey to significantly increaseODA, we have been able to increaseour development budget for 2003.This is a first step towards deliver-ing our national contribution to thejoint EU commitment made inBarcelona and Monterrey. OtherDAC countries have also announcedODA increases and have started torealize them. We will do our utmostto ensure that the EU will continueto play a positive role in this context.If all DAC members live up to theircommitments, we would, accordingto the latest DAC estimates, have a30% increase in overall ODA in2006. In combination with goodprogress in our joint efforts toenhance aid effectiveness, particu-larly with regard to the harmoniza-tion of donor procedures and unty-ing of assistance, this should helpthe international community a gooddeal to get “on track” with a viewto the MDGs.

In the spirit of Monterrey on anew partnership increased externalfinancing of development is impor-tant. Furthermore it is important totake steps on a national level. Gooddomestic governance is key todevelopment.

We therefore endorse theenhanced efforts of many develop-ing countries to improve governance.The NEPAD [New Partnership forAfrica’s Development] initiative,

Government Repor ts cont’d

Heads of State andGovernment of theAfrican Union:Second ordinarysession, Maputo,Mozambique,10-12 July, 2003

Maputo declaration onhiv/aids, tuberculosis,malaria and other relatedinfectious diseases

We, the Heads of Stateand Government of theAfrican Union,…devoted aspecial session to reviewand debate the currentstatus of the HIV/AIDS,

Tuberculosis (TB), Malaria andOther Related Infectious Diseases(ORID) in our continent. We held aVideo Conference with relevantexperts and international agenciesconcerned with the prevention andfight against these diseases, toexchange views and discuss furtherconcrete actions which should betaken to curtail their spread in ourcountries;

We remain deeply concernedabout the continuing spread ofHIV/AIDS, TB, Malaria and ORID,despite the efforts that memberstates have exerted to opera-tionalise the commitments made atthe Abuja Summits on Roll BackMalaria (April 2000) and onHIV/AIDS, TB and ORID (April 2001);

We commend the role beingplayed by the African Union (AU), incollaboration with UNAIDS and itsco-sponsoring UN Agencies,…

We have analysed the progressachieved so far in prevention andfight against HIV/AIDS, TB, Malariaand ORID, which are the majorcauses of morbidity and mortalityand constrain the socio-economicdevelopment of our region, accentu-ating poverty, disrupting family andsocial fabric and putting millions ofour people in despair. We acknowl-edge the successes achieved insome sub-regions in reducing HIVincidence. We note that this waspossible because of politicalcommitment, resource mobilization,collective social action and a highlevel of awareness among our citi-zens in face of these threats. Weurge that these positive steps andmeasures be intensified in all ourstates to achieve greater successagainst these diseases;

We note that the majority ofthose infected with and affected byHIV/AIDS in our continent arewomen, children and young people;especially the poor who have limitedaccess to effective care andsupport. This reflects their vulnera-bility particularly in societiesmarked by gender inequality, wherethe burden of care for the sick andfor the children orphaned by AIDSfalls overwhelmingly on women. Inthis connection, we recognise theneed to redouble efforts in givingparticular attention to women andyoung people’s prticipation andaccess to information, life skillsand services;

We also recognise the inclusionof the HIV/AIDS as a cross-cuttingissue in the New Partnership ofAfrica’s Development (NEPAD), andthe establishment of other initiativessuch as AIDS Watch Africa (AWA),the Commission for HIV/AIDS andGovernance in Africa (CHGA) andthe Millennium Development Goals,all of which represent milestones ofprogress in the fight against HIV/AIDS. We acknowledge the progressmade in some of our countries inmainstreaming HIV/ AIDS into rele-vant development frameworks suchas Poverty Reduction StrategiesPapers (PRSPs). We urge that theseefforts be sustained, strengthenedand extended to all countries;

We note that many MemberStates have mobilized internalresources and taken bold leadershipsteps to confront HIV/AIDS andother health challenges. We alsoacknowledge the response by theinternational community to theefforts to combat HIV/AIDS, TB,Malaria and ORID. The establish-ment of the Global Fund to FightAIDS, TB and Malaria (GFATM),provided a renewed impetus to theprogrammes and interventions thatMember States designed to combatthese diseases. However consideringthe gravity of the impact of thesediseases which have togetheralready been declared an emergency,we note that in a relatively shortperiod of time the GFATM has madesignificant financial commitmentsto concrete programs to fight thesediseases in Africa and disburse-ments are already underway.However, we underscore the needfor major new and sustainablefinancing (3 billion US dollars by � 23

Moz

ambi

que

Note: In SDR 7:1 (Dec. 2002, Mar. 2003] we focused on the challenge of HIV/AIDS.The governments of African here state their commitment.

the end of 2004) for the Fund fromdonor nations. These will ensurethat resources made available tofight the diseases rise to a new andmore realistic level given the scaleof the epidemics;

We recognize that healthsystems in our region need to bestrengthened, adequately equippedand financed to provide quality andeffective care against diseases andparticularly against HIV/AIDS, TB,Malaria and ORID in view of theirdevastating effects on society;

We reaffirm our commitment toachieving the goals we set concern-ing health sector financing in ourstates and recommit ourselves tomeet the target of 15% of nationalbudget to be allocated to health.We reiterate our readiness to mobi-lize more internal resources for thisstruggle, in partnership with theprivate sector, civil society and allother stakeholders. We areconvinced that the scaling up ofhealth interventions for HIV/AIDS,TB, Malaria and ORID prevention,care treatment and support cansignificantly contribute to the over-all reduction of morbidity andmortality and to the improvement ofthe quality of life of those infectedand affected by these diseases;

We warmly welcome the recentannouncement by President GeorgeW. Bush of the United States ofAmerica, to provide US dollar 15billion within the next five years forthe combating of HIV/AIDS in Africa.We express the hope that the fundswill be released in due time toenable the realization of the setgoals and objectives. We call onthe US government to appropriate 3billion US dollars in 2004, some ofwhich should be allocated to theGlobal Fund;

We are aware that provision ofquality care, support and treatmentto HIV/AIDS patients are importantaspects of prevention and control,and require coordination and harmo-nization of policies, strategies andprograms to obtain maximum effi-ciency and cost-effectiveness. Weare convinced that HIV/AIDS care,

support and treatment are essentialcomponents of prevention andcontrol and can help address thestigma and discriminationassociated with this disease andthus significantly contribute to thereduction of its spread and to thesurvival of those infected andaffected.

We recognise the urgent need toalleviate the impact of theHIV/AIDS on the lives of orphansand their long-term developmentprospects. In this regard, appropri-ate policies including legal andprogrammatic frameworks, as wellas essential services for the mostvulnerable children, should beadopted and applied at all levels.The challenge is to keep parentsalive through effective treatmentand prevention as a first vital step;

WE, THEREFORE, SOLEMNLY:1. REAFFIRM the commitments

enshrined in the Abuja Decla-ration [s] REITERATE ourcommitment to intensify andconsolidate efforts…

2. URGE the internationalcommunity to honour theirpledges by disbursing thefunds needed to fully executethe programs for prevention,care, support and treatment ofHIV/AIDS, TB, Malaria andORID, especially through theGlobal Fund, the World BankMulti-country AIDSProgrammes and other initia-tives, including removingconditionalities associatedwith debt relief and others thatcontribute to constraininghealth sector spending;

3. ALSO URGE the Global Fundand recipients of its funding,to work together to developsimpler and expeditious mech-anisms to ensure that theselarge additional financial flowsare quickly and easily availableto institutions in Africa thatcan utilize them effectively inthe fight against the diseases.We further urge the GlobalFund, UNAIDS family and the

recipient countries to worktogether to ensure the realiza-tion of our common objectives;

4. EXPRESS OUR DETERMINA-TION to ensure that all oppor-tunities for scaling up treatmentfor HIV/AIDS are pursued ener-getically and creatively, and inthis connection, seek diverseand effective partnerships withinternational donors, civil soci-ety, business sector andpeople living with HIV/AIDS, inorder to extend effective care,support and treatment to themaximum number of people,particularly women, orphanedchildren and others madevulnerable by HIV/AIDS, inconformity with the principlesof equal access and genderequity;

5. COMMIT OURSELVES topromote partnerships with theprivate sector and relevant UNSpecialised Agencies, pharma-ceutical companies and otherpartners to increase local andregional capacity for produc-tion and distribution of afford-able generic pharmaceuticalsfor the management ofHIV/AIDS, TB, Malaria andORID – the diseases with thehighest impact on Africa’ssocioeconomic development;

6. RESOLVE to continue tosupport the implementation ofthe Plan of Action for the AUDecade for African TraditionalMedicine (2000- 2010), espe-cially research in the area oftreatment for HIV/AIDS, TB,Malaria and ORID;…

“WE BELIEVE THAT HIV/AIDS, TB,MALARIA AND ORID CAN, MUSTAND WILL BE DEFEATED!”

AFR ICAN UN ION•UN ION A FR ICA INE•

UN IÃO A FR ICANA

A d d i s A b a b a , E TH IOP I A P. O. Bo x 3243

Te l ephone : 517 700

Cab l e s : OAU , ADD IS ABABA

The f u l l t e x t o f t h i s a nd o t he r

de c l a r a t i o ns c an be f o und a t :

www.a f r i c a - u n i o n . o r g24

Government Repor ts cont’d

25

Human Rights and Trade: the Legal basis5. The legal basis for adopting human rights approaches

to trade liberalization is clear. All WTO members haveundertaken obligations under human rights law. All144 members of the WTO have ratified at least onehuman rights instrument, 112 have ratified the Inter-national Covenant on Economic, Social and CulturalRights (ICESCR) and all but one have ratified theConvention on the Rights of the Child. Further, thoseareas of human rights law recognized as customaryinternational law take on universal application, whichmeans that trade rules should be interpreted asconsistent with those norms and standards whateverthe treaty commitments of States in trade matters.In other words, whatever the human rights treatyobligations undertaken by particular States, WTOmembers have concurrent human rights obligationsunder international law and should thereforepromote and protect human rights during the negoti-ation and implementation of international rules ontrade liberalization. …

6. A human rights approach sets as entitlements thebasic needs necessary to lead a life in dignity andensures their protection in the processes of economicliberalization. Article 1 of the Universal Declarationof Human Rights states that “all human beings areborn free and equal in dignity and rights” the protec-tion of which, through the rule of law, is necessary ifrecourse to rebellion is to be avoided. The UniversalDeclaration establishes the civil, cultural, economic,political and social needs necessary to human dignityand transforms these needs into legal entitlementsor rights to be protected, including, by extension, inthe processes of trade liberalization. The legal imper-ative of respecting human rights means that Statesare accountable for ensuring that these entitlementscannot be reduced to mere privileges or luxuries orleft subject to the whim of markets. The content ofthese basic entitlements have since been elaboratedat the national, regional and international level. Ofparticular relevance to international trade are theLimburg Principles on the Implementation of theInternational Covenant on Economic, Social and

Cultural Rights, the Maastricht Guidelines on Viola-tions of Economic, Social and Cultural Rights andthe general comments of the Committee onEconomic, Social and Cultural Rights (CESCR) onhealth, education, food and housing, all of whichhave added considerable clarity to these entitlementsand the obligations on States to protect them.

From the Executive Summary… After setting an outline for GATS, the report exam-

ines the obligations of States to promote and protectthe human rights most directly affected by the liberal-ization of trade in services, specifically the right tohealth (including the right to drinking water), the right toeducation and the right to development.

The liberalization of trade in services can impact onthese rights in various ways, depending on a range ofissues, not least the type of services being supplied,the mode of service delivery, the development level ofthe country and its internal infrastructure, the regula-tory environment and the level of existing services priorto liberalization. One issue of particular relevance isthe effect of increased foreign direct investment (FDI),in particular from the private sector, and its effect onthe enjoyment of human rights. While FDI can upgradenational infrastructures, introduce new technology andprovide employment opportunities, FDI can also haveundesired effects where there is insufficient regulationto protect human rights. In particular, as with anynational privatization scenario, increased foreignprivate investment can lead to:(a) The establishment of a two-tiered service supply

with a corporate segment focused on the healthyand wealthy and an underfinanced public sectorfocusing on the poor and sick;

(b) Brain drain, with better trained medical practitionersand educators being drawn towards the privatesector by higher pay scales and better infrastructures;

(c) An overemphasis on commercial objectives at theexpense of social objectives which might be morefocused on the provision of quality health, water andeducation services for those that cannot affordthem at commercial rates; �

UN COMMISSION ON HUMAN RIGHTS

Repor t of the High Commiss ionerECONOMIC , SOCIAL AND CULTURAL RIGHTS:L ibera l izat ion of trade in ser v ices and human r ights

Multilateral

This report was tabled 25 June, 2002. We present limited excerpts from a 37-page text. The headings in bold are provided to assist the reader.

REP RTS

26

(d) An increasingly large andpowerful private sector that canthreaten the role of the Govern-ment as the primary duty bearerfor human rights by subvertingregulatory systems through politi-cal pressure or the co-opting ofregulators.

The report notes that, to the extentthat these phenomena can be linkedto the liberalization of trade inservices, regulators need to beconscious of ensuring that liberaliza-tion policies take into account Stateresponsibilities to respect, protectand fulfil human rights. Human rightslaw does not place obligations onStates to be the sole provider ofessential services; however, Statesmust guarantee the availability,accessibility, acceptability and adapt-ability of essential services includingtheir supply, especially to the poor,vulnerable and marginalized.

…it is important to understandthe interaction between the rulesand disciplines in GATS and thenorms and standards of humanrights law. In particular:(a) GATS is broad in scope. The High

Commissioner encourages inter-pretations of the scope of GATSto ensure that under GATS oblig-ations do not constrain Govern-ments in taking action to promoteand protect human rights;

(b) Many government regulationsare measures that can comewithin the scope of GATS. WhileGATS acknowledges Govern-ments’ right to regulate in itspreamble, the question remainsas to the extent to which GATScan affect government regula-tions that might have an impacton trade - including governmentregulations relevant to the promo-tion and protection of humanrights. Consequently, judgementson or “tests” of the trade-restric-tiveness of government domes-tic regulation under GATS shouldtake into account States’ obliga-tions under human rights law;

(c) Both GATS and human rightslaw include the principle of non-discrimination; however, thereare distinctions in the applicationof the principle. The HighCommissioner highlights the

Finally, the High Commissioneridentifies a list of areas requiringfurther action to promote humanrights approaches to the liberaliza-tion of trade in services, includingthe following:(a) Ensuring equal access for basic

services - the High Commissionerencourages States to take actionto ensure universal supply ofessential services, includingthrough the use of affirmativeaction to ensure provision ofservices to the poor, isolatedand marginalized, taking intoaccount national circumstancesand capacities;

(b) Ensuring Governments’ rightand duty to regulate - the HighCommissioner encourages inter-pretations of GATS provisionsthat acknowledge the need forcountries to retain the flexibilityto use development tools, suchas “cross-subsidization” or theregulation of corporate gover-nance, in response to nationaldevelopment needs;

(c) Encouraging interpretations ofGATS that are compatible withhuman rights - the High Commis-sioner reminds WTO membersof their concurrent obligationsunder human rights law andencourages the development ofrules or “tests” that acknowledgeand protect States’ dutiesconcerning human rights whendetermining or assessingwhether a measure is trade-restrictive;

(d) Undertaking human rightsassessments of trade policies -the High Commissioner high-lights the voluntary nature ofcommitments to liberalize tradein services and stresses theneed to make commitments onthe basis of sound empiricalevidence…

The f u l l t e x t ( E /CN .4/Sub .2/2002/9 )

and o t he r r e l e v an t d o cumen t s a r e

ava i l a b l e o n l i n e a t t h e UN Comm iss i o n

web s i t e : www.unhch r. c h

need to ensure that theapplication of trade law takesinto account the human rightsprinciple of non-discrimination,including by safeguarding theneed to use mechanisms suchas “cross-subsidization” toensure that the poor, vulnerableand marginalized do not sufferdiscrimination in accessingservices in liberalized markets;

(d) GATS includes general excep-tions to protect public morals aswell as human, animal andplant life and the protection ofcertain aspects of individualprivacy. These could be seen asbeing linked to the need topromote and protect humanrights in the liberalizationprocess;

(e) GATS seeks the liberalization oftrade in services through theprogressive opening up of States’services markets. However, thereis at times a need for States tohave some flexibility to modifyand withdraw country-specificcommitments to liberalize tradein services, taking into accountthe need for States to meettheir human rights obligations;

(f) Country-specific commitments toliberalize service sectors underGATS could have both positiveand negative effects on the enjoy-ment of human rights. Conse-quently, WTO members shouldbe encouraged to undertakeassessments of the impact ofthe implementation of GATS onthe enjoyment of human rights aspart of the ongoing negotiationsconcerning GATS. Assessmentsshould concern both past experi-ence and potential effects offuture liberalization commitments;

(g) Developed countries, in accor-dance with their responsibilitiesto cooperate internationally topromote human rights, shouldshare both financial and techni-cal expertise to support devel-oping countries to undertakeassessments.

27

Social DevelopmentP ub l i c a t i o nsPub l i c a t i o ns

From a Global Market Place to Political Spaces-the North – South DialoguecontinuesEd . Leena R ikk i l a and

Kata r i na Sehm Pa tomak i

Paperback 240 pp.

Network Institute for Global DemocratizationHelsinki, Finlandwww.nigd.u-net.com

Power without accountability?: The Global Accountability Report 2003By Het ty Kovach , Ca ro l i ne Ne l i gan

and S imon Bu ra l l

Paperback 43 pages

The One World TrustHouses of ParliamentLondon SW1A 0AAwww.oneworldtrust.org

These essays make up a “working paper”, and merit use asthe basis for debate and development of goals and strategiesfor global governance.

The book results from a process begun in 2001 “devise anoriginal and realistic strategy to further the cause of democracyand social justice in a globalizing world.” The objective is to findinitiatives that civil society organizations and sympathetic partnerstates can implement. The NIGD gained the support of theFinnish Ministry for Foreign Affairs, and the Ministry itself spon-sored a high-level Helsinki Conference on global governance, inDecember, 2002.

The most important aspect of the book, is that it records aNorth-South and South-North dialogue. Essential questionsconfronting both, regarding the future of global institutions andtheir accountability, are examined.

Criteria applied to proposals include examination of what ismeant by democracy – franchise, scope, authenticity and self-binding –, the value justification of democracy, potential politicalsupport for initiatives under review and feasibility..

The Global Accountability Report (GAP) stimulates debate.It simply asks “why does accountability matter?” and examinesfive inter-governmental organizations, six transnational corpora-tions and seven NGOs. This is merely the tip of the internationalorganizational iceberg.

There are some unsurprising results, the Bank for Interna-tional Settlements comes off least well in terms of transparencyand member control. The OECD comes off best, with the UNHigh Commission for Refugees scoring well on access to onlineinformation and the World Bank second worst on the combinedscore.

Among corporations (Aventis, GSK, Microsoft, Nestle, Rio Tintoand Shell), its Rio Tinto that comes off best in member controland access to information, with Microsoft the last in the pack.

Probably more provocative are the NGO ratings. Seven speci-mens are under the microscope: (Amnesty International, CareInternational, International Chamber of Commerce, InternationalConfederation of Free Trade Unions, International Federation ofRed Cross and Red Crescent Societies, Oxfam International andWorld Wildlife Fund for Nature). The Red Cross pulls off the bestscore in member control and information with the ICC the worst.Amnesty scores tops on member control and IFRC on informa-tion. WWF is second worst in both areas.

Accountability is something NGOs often demand of others.Others are demanding it of NGOs. This report considers it aright. The criteria chosen, the way in which they are weightedand applied are worth scrutiny and debate by organizationalboards, management and membership. Let the debate continue.

28

Publications cont’d

When World’s Collide: Implications ofInternational Trade and InvestmentAgreements for Non-Profit Social ServicesBy And rew Jackson and Mat thew Sange r ( 2003 )

Paperback , 190 pp. ISBN 0-88627-319-6

Canadian Centre for Policy Alternatives,410-75 Albert Street,Ottawa, ON Canada K1P 5E7www.policyalternatives.ca

Canadian Council on Social Development309 Cooper Street,Ottawa, ON Canada K2P 0G5www.ccsd.ca

International trade and investment agreements couldnegatively impact on Canadian non-profit service providers. The collision in the book’s title refers to the “world of tradepolicy and the world of social policy” –spheres based on differ-ent values and seek conflicting outcomes. The authors discussCanada’s non-profit sector and its relation to NAFTA and WTO-administered agreements, showing how government’s policyflexibility regarding the sector can be compromised by challengesunder the North American Free Trade Agreement’s (NAFTA)investment Chapter 11 and under the General Agreement onTrade in Services (GATS) and Government ProcurementAgreement (GPA).

The provision of social services often involves a complexsystem of direct public, government-sponsored non-profit, andcommercial provision. Because of the mixed nature of servicedelivery and the narrow reading of exemption provisions by U.S.trade officials, agreement clauses protecting public servicedelivery may not extend to non-profits. The homecare industry isused as a case-study to illustrate these potential hazards. Toreduce vulnerability, explicit reservations for non-profit socialservices should be negotiated under NAFTA and the GATS,continuing to exempt social services from GATS commitments.Representatives from the non-profit sector in should be involvedin present and future negotiations. For non-profits operating inpublic service provision, this excellent book explains therelevant issues, offering constructive policy alternatives.

‘We the People’s’ or ‘We the Corporations’:Critical reflections on UN-business ‘partnerships’By Jud i t h R i ch te r ( 2003 )

Paperback, 62 p.

International Baby Food Action Network(IBFAN) www.ibfan.org& Geneva Infant Feeding Association (GIFA) www.gifa.org

This well-argued report looks critically at the trend within UNagencies toward embracing public-private partnerships (P3s). Ata time when making overtures to the private sector is being soldas de rigueur policy for public sector organizations, JudithRichter raises several important questions as to the validity andeffectiveness of these collaborations. After examining theevidence, she concludes that the P3 phenomenon has yet toproduce the results hoped for by the public sector, and hasinstead enticed the UN into a potentially dangerous trade-off ofpublic interest for private gain.

Richter poses the tough questions that spinners of P3-rhetoricdon’t want to hear, wondering at what conflicts of interest thevague terminology of “partnership” conceals, and asking how anuncritical acceptance of corporate interest helps further theglobal neo-liberal project. She illustrates her arguments withexamples from prominent P3s including the Global Alliance forImproved Nutrition (GAIN), the Global Fund to Fight AIDS, TB andMalaria and the Global Compact. In the end, her cogent positionspeaks to the need for clear lines between the public andprivate sectors and for a clear set of policy guidelines to protectthe public interest when interactions do occur.