17 April 2002

AFTINET received a copy of an EU GATS document yesterday, and made the following media release, which got good coverage in the Sydney Morning Herald (see item 2 below). The EU document is now available on the Gatswatch website.

A leaked secret European Union document about the current WTO Trade in Services (GATS) negotiations shows that the EU is seeking global rules which remove the right of Australian governments to regulate essential services, says Dr Patricia Ranald, the convenor of the Australian Fair Trade and Investment Network (AFTINET). AFTINET is a network of over 50 community organisations which conducts public education on trade policy.

"The EU document demands that Australia remove the right to reject foreign investment 'on the basis of national interest considerations,' labelling this right as 'discriminatory'. This would effectively remove the few remaining powers of the Foreign Investment Review Board to regulate foreign investment in services" Dr Ranald explained.

Dr Ranald says the document also requires Australia to

• treat postal services purely as traded goods and open them to competition by private foreign companies. This would threaten the current policy of public ownership of basic postal services to ensure that they remain affordable to all Australians, especially those living in rural and regional areas;
• remove the requirement of majority Australian ownership of shares in Telstra;
• treat water services purely as traded goods which would threaten most state governments policies of public ownership and price regulation of water services to ensure they remain accessible and affordable to all Australians.

"This document has echoes of the failed Multilateral Agreement on Investment and shows the danger of governments negotiating behind closed doors," says Dr Ranald.

"AFTINET is launching a publication "The WTO New Round: Resurrecting the MAI?" on April 24 at 12.30 at the Jubilee Room, NSW Parliament House, Maquarie St, Sydney which explains these issues and calls for public debate on them".

"In Australia, trade agreements are tabled briefly in parliament and examined by a parliamentary committee, but they are not voted in parliament: Cabinet makes the final decision. We must demand more transparency and accountability of our governments, so that vital policy on essential services is not secretly signed away in trade agreements. We call on the Australian government to release the requests it has made to other governments so that they can be publicly debated," she added.

The EU document is available on http://www.gatswatch.org/requests-offers.html

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2) Europe wants to muscle in on post, water markets

By Toni O'Loughlin Sydney Morning Herald, April 17 2002, p2.

Mail, water supplies and other publicly supplied services around the country would be thrown open to overseas companies, and foreign investment limits scrapped, under a world trade deal being pushed by European countries.

The push is revealed in a leaked draft negotiating document from the European Commission (EC) -representing European Union countries - for the upcoming World Trade Organisation (WTO) talks on the General Agreement on Trade in Services (GATS).

The commission is widening its bid to dismantle trade barriers beyond the perennial issue of foreign investment restrictions to include publicly provided services. This puts areas once excluded from GATS, such as the mail service and the water supply, on the bargaining table.

European companies, including Vivendi Water, Suez Lyonnaise and Thames Water, already have a strong presence in NSW, Victoria and South Australia, where sections of the metropolitan water services have been contracted out. Australian governments would be pressured to allow them to expand even further under a new GATS agreement, according to the peak industry group, the Australian Water Association.

The EC's draft list of negotiating requests also reveals a renewed push to abolish the foreign investment "national interest test" which allowed the Treasurer, Peter Costello, to block the bid by Shell, the Dutch-owned petroleum company, to take over vital Australian oil and gas fields last year. The EC lists this test, under the Foreign Acquisitions and Takeovers laws, as a "limitation" and a "discriminatory" trade barrier, and calls for it to be abolished. It also wants the requirement for public companies to have at least two Australian residents as directors to be lifted, along with the foreign ownership caps in Telstra, Optus and Vodafone. Government legislation forbids foreigners from owning more than about 15 per cent of Telstra, and there is a requirement for the majority of shareholders in Vodafone to be Australian.

The European criticisms come amid a campaign by WTO members to broaden GATS so changes can be made to government-provided services to minimise restrictions, with the aim of opening them up to the private sector.

Public interest groups, such as the Australian Fair Trade and Investment Network, are worried that the expansion of negotiations to include public services will erode the right of governments to regulate, subsidise and fund such services. "The reason it costs 45c to post a letter everywhere in Australia is because it is cross subsidised so rural people can afford it. That would have to change under GATS," said Dr Pat Ranald, convenor of the network.

This story was found at:

http://www.smh.com.au/articles/2002/04/17/1018333540840.html

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