EU wants slice of our services

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Mark Davis, Australian Financial Review, 27 February 2019

Australia is under pressure to open up politically sensitive service industries to greater foreign competition as the European Union uses global trade negotiations to target restrictions in postal services, telecommunications, banking and insurance and legal and accounting services. The EU has also asked Australia to scrap its foreign investment laws, which allow the federal government to reject takeovers and other investments by foreign firms if they are against national interest.

The EU demands are contained in a series of confidential "initial requests" lodged with Australia under the World Trade Organisation's general agreement on trade in services (GATS) negotiations.

The requests, a copy of which has been obtained by The Australian Financial Review, would also expose financial, business and professional services to greater competition. But the more politically sensitive and sector-specific demands in the EU requests seek:

  • Greater market access for EU firms to compete against Australia Post, including in the delivery of standard letters.
  • Removal of limits on foreign ownership of Telstra and more flexibility for foreign investors to buy into Optus and Vodafone.
  • More scope for EU firms to gain access to the local market for water collection and distribution services.

Fair Trade campaigner Patricia Ranald of the Public Interest Advocacy Centre said yesterday the EU's requests would remove the right of state and territory governments to regulate and provide essential services. Dr Ranald, who is principal policy officer with the Public Interest Advocacy Centre, said the requests on postal services would open up delivery of standard-sized letters to private sector competition. This would undermine Australia Posts' ability to use cross-subsidisation to maintain its standard letter delivery service for the cost of a 50c stamp. She also said the EU claims in the water distribution sector "would threaten most state government policies of public ownership and price regulation of water services to ensure they remain accessible and affordable to all Australians".

"The danger is that access to essential services will be traded off in the hope of gains in agriculture or other areas that are being negotiated in the WTO" Dr Ranald said.

She called on the Howard government to publicly release its responses to the EU requests, which are due at the end of March, as well as its responses to requests it has received from other governments under the GATS negotiations.


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