How the WTO's New "Services" Negotiations Threaten Democracy
September 13, 2000
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Despite the breakdown in global trade talks in Seattle in December 1999, negotiations are now underway at the World Trade Organization (WTO) to radically restructure the role of government worldwide--subjecting an ever-greater degree of governmental decision-making to oversight by the WTO.

These negotiations are aimed at expanding the General Agreement on Trade in Services (or GATS), a framework agreement that was adopted as part of the Uruguay Round in 1994. Essentially unknown to the public, the agreement is designed to facilitate international business by constraining democratic governance. The talks are taking place behind closed doors in close consultation with international corporate lobbyists.

The GATS is extraordinarily broad, dealing with every service imaginable. It applies to measures of all governments, whether federal, First Nation, provincial, state, regional or municipal. It employs both "top-down" and "bottom-up" approaches to covering measures and sectors. The agreement is not confined to cross-border trade, but intrudes into many domestic policy areas including environment, culture, natural resources, health care, education and social services.

Even though the agreement is not fully developed and some key parts of it are still untested, it is already having a significant impact on public policy. The GATS played a pivotal role in several recent WTO cases, where its broad wording was interpreted forcefully. The rulings in these cases show that the "services" agreement can be used to challenge an almost unlimited range of government regulatory measures that, even indirectly or unintentionally, affect the conditions of competition of international service suppliers.

The current round of GATS re-negotiation, in which every service is on the negotiating table, is only the first in a series of successive rounds planned to broaden and deepen the agreement. This expansion is to be achieved by increasing specific commitments of members, through re-classifying services to maximize GATS coverage, and by inserting new "horizontal" provisions that apply across-the-board to all members, services, sectors and modes of supply. Additional constraints on "domestic regulation" are among the most serious new threats to democracy posed by this round. The informal deadline to complete the GATS 2000 talks is December 31, 2002.

The GATS negotiations highlight many underlying tensions between the expansive business agenda being promoted by international corporations and the democratic principles and priorities embraced by the global citizenry. Public concern about the impacts of the GATS will almost certainly grow, as the agreement becomes more widely understood outside business and trade circles. The recent experiences of Seattle and of the defeated Multilateral Agreement on Investment (MAI) demonstrate the vitality of well-organized citizens' movements committed to strengthening democratic authority. A similar movement can be expected to mobilize around the GATS negotiations and there is good reason to believe that another essential victory can be achieved.