20 June 2005

Contents:

1. AFTINET is moving offices
2. Government tables second round offer in GATS negotiations: Campaign victory as water for human use is excluded from offer
3. AFTINET press release: Government concedes that water does not belong in trade agreements
4. "Stop the GATS power play": GATS statement from civil society
5. Event: Make poverty history white wrist band day 1 July

1. AFTINET is moving offices

AFTINET is moving to a new office. Please take note of our new address and phone number. From 25 June, you can find us at:

Public Interest Advocacy Centre
Level 9, 299 Elizabeth St
Sydney NSW 2000

Ph: 02 8898 6500
Fax: 02 8898 6555

DX 643 Sydney

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2. Government tables second round offer in the GATS negotiations – Campaign victory as water for human use excluded from offer

The Australian Government tabled its second round offer in the WTO trade in services (GATS) negotiations in Geneva on 26 May. Australia was among the first member nations to table an improved offer. The offer was publicly released on 27 May.

The good news is that the offer responded to the community campaign to keep water OUT of the GATS. The revised offer contains a statement that the offer "excludes the provision of water for human use, including water collection, purification and distribution through mains." This is an improvement on previous statements made by the Government that there would be no offer on the ownership of water, which left the status of management and distribution of water ambiguous. See media release below for more information. Congratulations to all who have been involved in this campaign over the last few years and also during the Global Week of Action in April.

We are also pleased to note that there is no offer on postal services, public passenger transport, public health or education. This is also a response to community pressure.

The revised offer does include commitments and clarifications in the following sectors – legal services, business services, telecommunications, construction and related engineering services, environmental, private health and transport and freight logistics. The main commitments have been made in the legal, telecommunications and freight logistics sectors. The revised offer also makes increased commitments on movement of people across most sectors.

This offer is largely within the bounds of existing domestic legislation and policy. Enshrining these policies in the GATS however restricts flexibility and will limit the capacity of future Governments to change policies and legislation.

The offer and explanatory notes are available at http://www.dfat.gov.au/trade/negotiations/services/index.html.

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27 May 2005

"In response to a strong community campaign, the Australian Government has made a public commitment to exclude water for human use from the World Trade Organisation’s General Agreement on Trade in Services (GATS)", said Dr Patricia Ranald today. Dr Ranald is the Principal Policy Officer with the Public Interest Advocacy Centre and the convenor of the Australian Fair Trade and Investment Network of 90 community organisations (AFTINET).

The Government’s revised offer in the GATS negotiations published on Friday contains a statement that the offer ‘excludes the provision of water for human use, including water collection, purification and distribution through mains" (Australia, Revised Services Offer, p27).

"We are very pleased that water services have been excluded", explained Dr Ranald. "Community groups have sent a strong message to the Government that access to water is a basic human right and should not be included in trade agreements. To include water in the GATS would treat water as a traded good. It would reduce the ability of federal and state governments to regulate water services to ensure they remain accessible and affordable to all Australians. Many areas in Australia are drought-stricken, and we cannot risk putting water provision in the hands of market forces."

"This is a victory but we will continue to monitor and campaign, " added Dr Ranald, "Global water corporations see access to water as a source of profits and are lobbying governments to include water services in the GATS. Australia and other countries are still receiving requests from the European Union to include water services in the GATS."

"This offer is not binding and may be amended or withdrawn at any time during the GATS negotiations, which will continue into 2006. The danger is that access to water, and other essential services such as health, education, postal and energy, will be traded off at the last minute in the hope of gains in agriculture or other areas which are also being negotiated in the WTO", explained Dr Ranald.

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4. "Stop the GATS power play": GATS statement from civil society

AFTINET has signed on to a statement from civil society "Stop the GATS Power Play". For the full text of this statement, please see below. This statement will be used to pressure governments in the lead-up to the WTO Ministerial in December and also used at the next special services cluster of meetings will take place in Geneva from 20 June – 1 July. The statement has been sent to all WTO delegations in Geneva and to the Chairs of the WTO General Council and the Council on Trade in Services in Special Session (the GATS negotiating body) and to Dr Supachai, the Director-General of the WTO.

This statement has been signed by over 150 organisations spread throughout the world, including a number of AFTINET member organisations. For more information and to see a full list of signatories, please visit www.world-psi.org/powerplay.

Stop the GATS power play against the citizens of the world!

We, the undersigned civil society organizations from around the world, wish to express our deep concerns regarding the current round of negotiations on the General Agreement on Trade in Services [GATS] of the World Trade Organization [WTO], following the effective inclusion of these negotiations as part of the ‘single undertaking’ through the highly criticized July 2004 Framework Agreement.

The forces driving GATS

The current Doha Work Program on global trade negotiations at the WTO was to have been geared towards the critical needs and concerns of the peoples of the Global South. We have always been skeptical of that rhetoric. Today enormous pressure is being put on these countries to open up their service markets to powerful foreign-based, for-profit corporations from the industrialized countries. With only 50 countries making offers so far (counting the 25 EU member states as one), developed countries continue to demand that 40 developing countries and 50 less developed countries make offers to open up their service markets. This makes a mockery of claims that the GATS is a flexible agreement, in which countries could elect to put specific services on the negotiations table or not.

Key sectors in which developed countries are seeking further commitments from developing countries are, among other, finance, energy, environment, water, tourism, distribution and transportation services. On the one hand, these are among the service sectors where the EU and US are the home base of for-profit corporations seeking to expand their global market reach. On the other hand, these sectors also represent crucial and necessary bases for the fulfillment of human rights to public social services, as well as the fundamental support services required for agricultural and industrial production.

The GATS is essentially an investment treaty. It is designed, first and foremost, to protect investor rights and extend and ‘lock-in’ liberalization in the service sectors of other countries for foreign-based service corporations. This is why big business lobby machines like the U.S. Coalition of Service Industries and the European Services Forum, which represent the major for-profit corporations in key service sectors, are openly pushing hard for developing countries to make commitments now. And, once these commitments are made, they are "effectively irreversible". At the same time, the capacity of developing countries to have their own service industries operating 'competitively' in global markets is very small or non-existent, making these negotiations very one-sided.

Increasing pressures

To accelerate the pressure and ensure an outcome in services negotiations, developed countries, such as the European Commission and the United States have advocated the establishment of 'benchmarks' for the GATS negotiations and are coordinating these demands through informal ‘friends’ groups in key sectors. Imposing benchmarks would imply that WTO members would not have any more the flexibility to decide whether to table offers and engage in commitments or not.

We especially condemn moves to reclassify telecommunications to include value–added content as a back door route to secure - commitments that governments are unwilling to make. Commitments made under the proposed new classification would deprive governments of the chance to assess the implications of these technologies and decide the appropriate form of regulation.

This erosion of the so-called flexibility in the GATS negotiations - along side the failure of industrialized countries to propose and support significant development-oriented proposals in the simultaneous agricultural negotiations and in the so-called Non Agricultural Market Access (NAMA) negotiations - exposes the gulf between the rhetoric and reality of the so-called "Doha Development Round".

The experience of services liberalisation

Liberalisation commitments in services will undoubtedly have severe impacts upon national development policy options and their implementation. Contrary to the claims being made about services liberalisation:

• When public services such as water, education and health are exposed to liberalization, the people suffer the consequences. Consider what happened when Argentina allowed an essential service like water/waste water to be taken over by the global water giant, Suez. Argentinean's experienced rising rates, broken promises for expanded services, and the construction of a new treatment plant that dumped raw sewage into the Rio de la Plata.

Furthermore, in addition to all the above, there is the track record of these same service providers demanding compensation for their own failures and using trade language to justify their self-serving business interests.

The current negotiation realities

The WTO has ignored the repeated requests of developing countries for a comprehensive, assessment of the developmental, environmental, social and gender impacts of service liberalization before continuing with the GATS negotiations. A recent study paper by the UNCTAD secretariat questions the promised benefits of privatization and liberalization in the service sector and shows how developing countries will lose flexibility in public policy making under the GATS. Moreover, recent WTO rulings on services such as the Telmex case and the U.S. gambling case highlight the dangers of making commitments to open-up service sectors without knowing the full implications, even for countries experienced in trade matters.

The GATS regime contains other equally pernicious measures that can be used to undercut or reduce the space of governments for public policy making. The Domestic Regulation Article VI.4 of the GATS makes provisions for governments to challenge unwanted laws and regulations of another country, which may be perceived as a disguised barrier to trade. Yet, as the UNCTAD secretariat study points out, such challenges can also reduce the policy making and regulatory flexibility/security of developing countries. The right to regulate and maintain policy flexibility is essential for developing countries to ensure that their own development priorities and strategies are advanced, especially since most of them do not have optimal policy-making and institutional frameworks in place.

At the same time developing countries are hopeful of enormous gains under the Mode 4, which refers to the movement of 'natural persons' into other countries to supply services. Yet it is clear that most developed countries such as the US will not make substantial offers, particularly in relation to low and unskilled workers, due to internal political pressures. On the other hand, the potential impacts on developing countries of the loss of skilled workers in health, education or professional services have not been assessed. Nor have rich countries recognized any obligation to compensate those countries for the cost of training these professionals.

In addition to the above, the manner in which the GATS negotiations have been proceeding and the established experiences of services liberalisation-and-privatization give reason for working people to be concerned about job losses, job insecurity, curtailment of workers’ rights, decline in real wages and increased demands in labour flexibility, since the protection of labour rights and promotion of core labour standards are increasingly being viewed as ‘protectionist measures or barriers to ‘free trade.’

The demands of civil society organizations

Civil society organizations throughout the world are concerned that trade policies should truly serve the priorities and needs of all peoples in all countries.

As trade negotiators prepare to gather once again in Geneva this summer, it is important to stress that civil society organizations around the world remain opposed both to the processes and the direction of the WTO’s service negotiations.

We call upon the WTO members to stop the current push for a deeply questionable agreement that serves the expansionary interests of service corporations and will be a profound disservice to citizens around the world. We demand that

• international financial institutions like the World Bank and the International Monetary Fund must respond immediately to global civil society demands and developing country government requests for the immediate cancellation of all odious and illegitimate Third World debts, and an immediate end to the pressures on developing countries to liberalize and privatize their public services through regulatory or institutional impositions or by placing such economic policy conditions on their loans.

If negotiations do not proceed on the above terms, we call upon developing countries to seriously consider how or whether the negotiations should continue. Simply put, access to essential services and the livelihoods of millions of people in the developing world are at stake.

We welcome the opportunity to clarify these views further and would appreciate a response to this communication.

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5. Event: Make Poverty History white wrist band day 1 July

In 2000, most nations of the world, including Australia, agreed to a set of achievable targets (‘the Millennium Development Goals) that would see poverty halved by 2015. The Make Poverty History campaign is pressuring governments around the world to meet these Millennium Development Goals.