Why read this brief?
In spite of assurances that have been given
UNISON Scotland remains concerned by the apparent threat that
GATS poses to public services. We fear that GATS does give a green
light to the privatisation of public services.
What is it?
GATS is the General Agreement on Trade in
Services, the service element of the Geneva based World
Trade Organisation (WTO). GATS was agreed under the Uruguay
Round of multilateral trade negotiations and came into force in
1995. It sets out a framework of legally binding rules for the
liberalisation of trade in services.
- the vast majority of services,
- almost all major world markets,
- all the different ways a service can be supplied to a foreign
- cross border: by fax, phone, email, transport;
- Commercial presence: service supplier crossing the
- Consumption abroad: consumer crossing the border, eg
- Movement of natural persons: the ability for nationals
to work overseas for a temporary period.
- issues of establishing commercial operations in foreign markets.
Interestingly GATS does not define "service".
How GATS works:
- GATS allows companies to identify markets and over 160 services
that are open to foreign service providers, known as Market
- It has a Most Favourable Nation clause which obliges
members to give the most favourable treatment to any trading
- The National Treatment rule requires Members to treat
foreign and domestic service suppliers equally.
- A Disputes Resolution procedure through the WTO applies
if a GATS member is breaking its obligations.
- Once commitments on specific services have been undertaken
they cannot be withdrawn without compensation for other members.
- When a country joins GATS it does not mean it has made commitments
to open all sectors for all measures affecting the supply of
services. The strength of the commitment can vary.
- Some services are not included in GATS as long as measures
in these matters are not used to get round a member's obligations
under GATS. This clause covers services supplied under "Government
Authority"*, and some fiscal policy and taxation.
*There is controversy over what constitutes a
service supplied under "Government Authority". As more
public services are provided through the private sector, particularly
hospital services, there are fears this means they will be liberalised
Progress so far:
The GATS timetable began in early 2000. Two major
liberalisation negotiations in telecommunications and financial
services have been agreed. An agreement on maritime transport
was postponed, whilst discussions have started on the impact of
trade in services of environmental measures.
Negotiations begin again in March 2002, there is to be a stocktaking
5th Ministerial Conference in 2003, and the deadline
for conclusion of negotiations is January 2005.
UK Government Position
The UK, through its membership of the WTO, has
taken on the provisions of GATS. The Department of Trade and Industry
(DTI) in consultation with the rest of government agrees the UK
position and the European Commission acts as lead negotiator for
EU member states in the WTO. The Department for International
Development (DFID) should ensure the UK position properly reflects
The DTI says fears are misplaced that GATS will
force the privatisation of public services or will prevent Governments
from regulating. DFID refutes claims that GATS threatens economic
development and poverty reduction in developing countries. In
March 2001 Secretary of State for International Development Clare
Short said: "The efficiency of the service sector is a major
determinant for development and therefore liberalisation of trade
and investment in services should be a key element of policy reform".
Criticism of GATS:
There has been a clear lack of debate on GATS
in the UK, and in January 2001 an Early Day Motion on GATS was
signed by 262 MPs. It expressed concern over the lack of debate
on GATS, and called on the Government to ensure that there is
an independent, thorough impact assessment of the extension of
GATS on the provision of key services both in the UK and internationally.
World Development Movement
The WDM released a report GATS: A Disservice
to the Poor earlier this year. It concludes that the rationale
for GATS appears to rest on "the remarkable and unproven
assumption that service liberalisation benefits developing countries",
and condemns the UK Government's position that negotiations should
continue despite the absence of an assessment.
In October 2001 ten developing countries (Cuba,
Dominican Republic, Haiti, India, Kenya, Pakistan, Peru, Uganda,
Venezuela and Zimbabwe) called for a proper assessment of GATS.
Public Services International
Public Services International (PSI) the federation
for trade unions representing public sector workers (UNISON is
an affiliate) has produced Great Expectations: The Future of
Trade in Services. This argues agreements to promote the
growth of international trade "jeopardises the central role
of government in determining policies for the good of individual
countries". It highlights concerns for health and education,
and public services in developing countries. The PSI campaign
calls for a full assessment of the impact of the GATS regime,
and a moratorium to be imposed on GATS.
A GATS motion was carried at National Conference
2001, and UNISON's Scottish Council (February 2002) agreed a motion
on GATS. UNISON has signed up to the international trade union
campaign to stop the corporate globalisation agenda. We want to
replace it with a society where social and environmental issues,
and core labour standards based on the International Labour Organisation
Conventions, are part of the global agenda. Despite Government
assurances, UNISON Scotland is concerned that GATS poses a threat
to public services. We want to secure a commitment from Government
that they will not sign up to a treaty that requires the UK to
liberalise any public services.