EU Proposes Broad Liberalization Of U.S. Services Sector in WTO Trade Talks

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International Trade Daily, 26 February 2019

The European Union has asked the United States in negotiations now under way in the World Trade Organization to broadly liberalize its services sector in ways that nongovernmental organizations say would threaten existing regulatory efforts to protect consumers and the environment, according to documents released Feb. 25. Joan Claybrook, president of Ralph Nader's Public Citizen, said that, with the EU proposal, a "sweeping array of basic consumer and environmental safeguards at all levels of [U.S.] government" were being put on the WTO "chopping block."

The EU proposal--contained in a paper reportedly submitted during the WTO services negotiations in Geneva--call on the United States to commit to further opening its services sector to foreign competition.

Sectors covered in the proposal include professional services, business services, postal and courier services, telecommunication services, financial services, energy services, and tourism and travel-related services.

U.S. consumer advocate groups said that, under the proposal, U.S. water and electrical utilities, for example, could wind up being controlled by European or other foreign interests.

Lori Wallach, director of Public Citizen's Global Trade Watch, said that, in fact, everything from municipal drinking water to local electrical utilities to the U.S. postal service were now "headed for sale" in Geneva.

"The public and our elected officials at every level have been kept in the dark," Wallach said.

Public Citizen and other NGOs, including Friends of the Earth, called for an immediate halt to the WTO talks and for the launching of a "public process" involving state and local officials to provide input.

U.S. and European government officials were not available for comment.

The EU proposal suggests the "sweeping scope" of issues now on the negotiating table in Geneva, according to Public Citizen, including the privatization and deregulation of public energy and water utilities; postal services, higher education, and alcohol distribution regimes; the right of foreign firms to obtain U.S. government small-business loans; and the "extreme deregulation" of private services industries such as insurance, banking, and securities.

States Should Be Notified

Minnesota State Sen. Sandra Pappas (D) said that the Office of the U.S. Trade Representative, which leads the U.S. negotiating team in Geneva, should not be making commitments at the WTO regarding services sectors regulated by the states without consulting governors and state legislatures. "We make the laws," Pappas said. "We don't want them undone in a global trade agreement few of us have even heard about."

Under the EU proposal--posted on the Web sites of Public Citizen and the Polaris Institute of Canada, along with EU services proposals to some 80 other WTO member countries--the United States would be required, for instance, to commit to lifting current residency and citizenship restrictions on practicing law and eliminating rules in 16 states that provide state authorities with the exclusive right to sell packaged liquor.

The EU document also would have the United States remove restrictions on the ownership or purchase by non-U.S. citizens of land in nine states--South Carolina, Oklahoma, Florida, Wyoming, Mississippi, Hawaii, Idaho, Montana, and Oregon.

It would also have the United States eliminate preferential tax treatment benefiting residents of countries "contiguous" to the United States.

The United States is due to respond to the EU proposal--along with the proposals submitted by other WTO members in the services negotiations--under a WTO timetable for the services negotiations by March 31.

The EU proposal has been posted on the Web site of Public Citizen at http://www.citizen.org/documents/usa.pdf along with services proposals made by the EU in the WTO negotiations to some 80 other WTO member countries.

By Gary G. Yerkey

Copyright 2003 by The Bureau of National Affairs, Inc., Washington D.C.


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