2. New Trade Treaty Seeks to Privatize Global Social Services

by Project Censored
Published: Last Updated on


The Ecologist
February, 2001
Title: The Last Frontier
Author: Maude Barlow

Faculty evaluator: John Kramer
Student researchers: Chris Salvano, Adria Cooper

Extensive international corporate media coverage including:
Toronto Star, 3/3/02
The Herald (Glasgow) 2/27/02
The Hindu, 11/17,01
The Weekend Australian, 8/25/01
The Gazette (Montreal) 6/15/01
The Financial Times (London)

A global trade agreement now being negotiated will seek to privatize nearly every government-provided public service and allow transnational corporations to run them for profit.

The General Agreement on Trade in Services (GATS) is a proposed free-trade agreement that will attempt to liberalize/dismantle barriers that protect government provided social services. These are social services bestowed by the government in the name of public welfare. The GATS was established in 1994, at the conclusion of the “Uruguay Round” of the General Agreement on Tariffs and Trade (GATT). In 1995, the GATS agreement was adopted by the newly created World Trade Organization (WTO).

Corporations plan to use the GATS agreement to profit from the privatization of educational systems, health care systems, child care, energy and municipal water services, postal services, libraries, museums, and public transportation. If the GATS agreement is finalized, it will lock in a privatized, for-profit model for the global economy. GATS/WTO would make it illegal for a government with privatized services to ever return to a publicly owned, non-profit model. Any government that disobeys these WTO rulings will face sanctions. What used to be areas of common heritage like seed banks, air and water supplies, health care and education will be commodified, privatized, and sold to the highest bidder on the open market. People who cannot afford these privatized services will be left out.

Services are the fastest growing sector of international trade. If GATS is implemented, corporations will reap windfall profits. Health care, education, and water services are the most potentially lucrative. Global expenditures on water services exceed $1 trillion each year, on education they exceed $2 trillion, and on health care they’re over $3.5 trillion.

The WTO has hired a private company called the Global Division for Transnational Education. This company plans to document policies that “discriminate against foreign education providers.” The results of this ‘study’ will be used to pressure countries with public education systems to relinquish them to the global privatized marketplace.

The futures of accountability for public services, and of sovereign law are at stake with the GATS decision. Foreign corporations will have the right to establish themselves in any GATS/WTO-controlled country and compete against non-profit or government institutions, such as schools and hospitals, for public funds.

The current round of GATS negotiations has identified three main priorities for future free-trade principles. First, GATS officials are pushing for “National Treatment” to be applied across the board. “National Treatment” would forbid governments from favoring their domestic companies over foreign-based companies. This idea already applies to certain services, but GATS will enforce it to all services. This will create an expansion of mega-corporate access to domestic markets and further diminish democratic accountability. The economically dominant western countries would like to make it illegal for “developing” countries to reverse this exclusive access to their markets.

Second, GATS officials are seeking to place restrictions on domestic regulations. This would limit a government’s ability to enact environmental, health, and other regulations and laws that hinder “free-trade.” The government would be required to demonstrate that its laws and regulations were necessary to achieve a WTO-sanctioned objective, and that no other commercially friendly alternative was available.

Third, negotiators are attempting to develop the expansion of “Commercial Presence” rules. These rules allow an investor in one GATS-controlled country to establish a presence in any other GATS country. The investor will not only be allowed to compete against private suppliers for business, but will also be allowed to compete against publicly funded institutions and services for public funds.

This potential expansion of GATS/WTO authority into the day-to-day business of governments will make it nearly impossible for citizens to exercise democratic control over the future of traditionally public services. One American trade official summed up the GATS/WTO process by saying, “Basically it won’t stop until foreigners finally start to think like Americans, act like Americans, and most of all shop like Americans.”

UPDATE BY AUTHOR MAUDE BARLOW: The General Agreement on Trade in Services is the most far-reaching negotiation ever undertaken on the trade in services and will effect the lives of every human being on the planet. Yet very few people know that it is taking place. If the governments of the WTO are successful in coming to a substantive agreement, by 2005, services such as health care, water, culture and education, among many others, will be subject to the rules and disciplines of the WTO, and launched on an irreversible path to private control.

Since my original story was printed, negotiations in Geneva have intensified. By June 30, 2002, every country is to have submitted to every other its wish list of services that it wants included in negotiations, and by March 31, 2003, each country is to submit its responses. All of this is being done behind closed doors, so that citizens are left to guess what services their governments are trading away. However, civil society groups did secure a leaked copy of the country demands of the European Commission, and they are shocking. The EC’s demands include all aspects of culture, including print and broadcasting, postal services, energy services, water, hydro-electricity, telecommunications, and pension funds, among others. In addition, at the December 2001, WTO Ministerial meeting in Doha, Qatar, a new provision was added that commits countries to take down “tariff and non-tariff barriers” to environmental services-including water.

The mainstream press has all but ignored this story. It is difficult to grasp and complicated to explain. In the aftermath of the September 11 attacks on New York and Washington, and the ensuing war, it is even easier for governments, corporate lobby groups and global institutions like the WTO to meet in total privacy, with very few enquiring journalists to deal with.

There is, however, excellent material on the GATS available. Public Citizen, Alliance for Democracy, Friends of the Earth International and Public Services International all have information available. Information can also be found at The Council of CanadiansPolaris Institute, and the Canadian Centre for Policy Alternatives.