GATSwatch Comment, 21 April 2019

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Re: Clare Short's Letter to Members of the UK Parliament

In her letter to British MPs, UK Development Minister Clare Short defends the GATS by repeating some of the 'arguments' brought forward by the WTO secretariat in its pamphlet "GATS Facts and Fiction", a year ago.

These 'arguments have already been refuted in the rebuttals of the WTO's pamphlet that were issued by GATS critics last year.

For now, I just would like to highlight two points from Ms. Short's letter: one on substance and one on process.

Ms. Short writes that:

On the impact of GATS commitments on the powers of national and local governments to regulate. The commitment to liberalise services does not imply the foregoing of domestic regulation.

Now consider two requests that the EU wants to make to Switzerland:

1) on acquisition of real estate

Switzerland has scheduled a NT restriction under the horizontal commitments the acquisition of real estate by prohibiting “purely financial investments, real estate business operations, acquisition, on a professional basis, of holiday apartments and facilities other than hotels (e.g. apartment houses, camps, sport areas) and acquisition of agricultural real estate”. EC requests: Removal of the prohibition against acquisition, on a professional basis, of holiday apartments and facilities other than hotels (e.g. apartment houses, camps, sport areas). Please clarify the nature of the prohibition against acquisition for "purely financial investment", and of "agricultural real estate".

2) under sectoral commitments for both wholesale and retail trade services, the EU wants to ask Switzerland:

Mode 3: Restrictions on sales area in some cantons. Eliminate such restrictions

Source: European Commission, "GATS 2000. Request from the EC and its Member States (hereinafter the EC) to Switzerland", Discussion document for the 133 Committee Ad Hoc Services, MD:046/02, 06 March 2019.

In both examples the EU asks the Swiss federal government to get rid of existing Swiss federal or cantonal legislation. Both examples show how GATS negotiations can (and are intended to) have an impact on the powers of national and local governments to regulate.

Another element in Ms. Short's letter that merits attention is democratic process and transparency with regards to the GATS negotiations.

As Ms. Short writes,

Papers which the EU submits to the WTO as part of the negotiating process are rapidly made public and are available on the WTO web-site (www.wto.org).

However, I am sure you will appreciate that in the context of complex international negotiations, it is not desirable to reveal detailed negotiating positions in advance.

The second line in this quote from Ms. Short's letter is crucial. Especially with regards to the offers that will be formulated after the June 30 deadline for the requests, it is the details that matter, and it is the detailed offers that should be debated and get approval in EU member state parliaments (the European Parliament has almost no effective power over external trade policies).

The note on the cover page of the leaked EC documents shows that, like Ms. Short, the European Commission does not consider transparency and democratic process their primary concern:

"Member States are requested to ensure that this text is not made publicly available and is only circulated to the officials concerned."

In fact, this cover note suggests that members of parliament in the EU member states the leaked documents would never have had access to the request lists if they hadn't been leaked and put in the public domain by anti-GATS campaigners.

Recently, Susan George, chair of ATTAC France, asked a senior member of Pascal Lamy's cabinet for full transparency with regards to the request-offer phase in the GATS 2000 negotiations. The reply that she received by e-mail on the 3rd of April confirms a wilful lack of transparency on the side of the European Commission:

"The requests that will be submitted to WTO
members in June cannot and will not be
public as they are part of the bilateral
negotiating process. We are currently
discussing with Member States the
preparation of requests with a view to
finalize them in time for sumission to WTO
members by June next.  Any input you'd
like to provide should, therefore, be
submitted to the Commission as soon as
possible".

Source: e-mail by EC official to Susan George, 3 April 2019


Finally, if you want to check out current GATS commitments and exceptions (by country or by sector), the European Commission's GATS INFO-POINT has a much easier interface than the WTO web site.

For example: click on Switzerland -> Distribution Services -> Retailing Services, and you will find the relevant schedule. Under limitations in market access it reads: "Some cantons have restrictions on sales area".

Erik Wesselius, GATSwatch

GATSwatch is a joint project of Corporate Europe Observatory and Transnational Institute
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