Relevant for the future of work as well as that of democracy... >X-Sender: [EMAIL PROTECTED] >Date: Mon, 18 Jun 2001 21:23:55 -0400 >To: [EMAIL PROTECTED] >From: Bob Olsen <[EMAIL PROTECTED]> >Subject: GATS: The End of Democracy? >Mime-Version: 1.0 >Status: > > > > > GATS: The End of Democracy? > GATS: The End of Democracy? > GATS: The End of Democracy? > > > >Date: Mon, 18 Jun 2001 12:09:21 -0700 >From: Sid Shniad <[EMAIL PROTECTED]> >Subject: GATS: The End of Democracy? - The Australian Financial Review > > >The Australian Financial Review > 15th June 2001 > > >GATS: The End of Democracy? > >Richard Sanders investigates the forces behind its unseemly haste. > >"The liberty of democracy is not safe if the people tolerate the growth >of private power to a point where it becomes stronger than that of the >state itself. That, in essence, is fascism - ownership of government by >an individual, by a group, or any controlling private power." > >Franklin D. Roosevelt's warning of the fascist threat is as urgent today >as it was in the 1930s, particularly since the public is blissfully >unaware of the stealthy corporate assault on democracy occurring right >now. We are witnessing the economic colonisation of the world by >corporate interests. This is achieved through 'free' trade agreements >designed to run the world on economic rationalist lines. > >Since negotiations began earlier this year, anti-globalisation activists >have been warning that the General Agreement on Trade in Services (GATS) >poses a major threat to democracy and that proposed changes being >negotiated will lead inevitably to the demise of most public services >including health and education. > >Little notice has been taken of these dire warnings, probably because >they sound so outrageous. After all, what government in its right mind >would voluntarily sign away public services and allow democracy to be >severely eroded? > >Yet close scrutiny of the GATS text and related World Trade Organisation >(WTO) documents reveals that there is a great deal of substance to these >warnings. For example, WTO head Mike Moore and Trade Minister Mark >Vaile want the public to believe that all services provided by >government are excluded from the scope of the GATS. As we shall see, >WTO documentary evidence proves that most government services including >health and education will in fact be subject to the GATS in spite of the >assurances from Moore and Vaile. > >The GATS is one of seventeen international trade agreements administered >by the WTO. These agreements are so complex and full of jargon that >possibly only their architects fully comprehend their detail and more >importantly, their implications for society. Most people, including our >government ministers and elected representatives, have little >understanding of the secretive world where an unelected elite shape the >destiny of humanity. > >The first step to understanding the GATS is to understand the forces >driving it and the other WTO trade liberalization agreements. On the >face of it, the WTO consists of representatives of 141 governments >sitting around the table negotiating international trade agreements that >are mutually beneficial and in the public interest. > >However, the European Commission's website on Services alerts us that >the GATS is "not just something that exists between governments, but it >is first and foremost an instrument for the benefit of business." > >Few realise that the GATS and even the WTO itself are part of a global >corporate power grab. As David Hartridge, the former Director of the >WTO Services Division explains: "Without the enormous pressure >generated by the American financial services sector, particularly >companies like American Express and Citicorp, there would have been no >services agreement and therefore perhaps no Uruguay Round and no WTO." > >Few realise that the agendas for these negotiations are set behind the >scenes in private meetings involving a small but very powerful elite who >are avid proponents and beneficiaries of the free trade ideology. > >Let us for a moment observe one such meeting that played a key role in >setting the GATS agenda. Our window is > >http://www.globalservicesnetwork.com/Ditchley%20Park.htm. It is April >26 1998 and we are at Ditchley Park, an English country estate near >Oxford. > >We are looking into a large room with bookshelves to the ceiling and >valuable paintings on the walls. Forty-two people are seated around an >enormous oval table. > >>From a press release lying on the table entitled "Trade Experts and >Policymakers Gather at Ditchley Park to Determine Future WTO Role in >Services" we learn they are meeting "to chart a new direction for >liberalizing global trade in services". It tells us that this select >group of people includes corporate executives, public officials, >academics and advisers from the OECD, UNCTAD, and the WTO. This is >clearly a private and unofficial meeting as we read they are all >"acting in their personal capacity". > >This raises the question of how we, the public, can place trust in our >unelected and unaccountable public officials when they are being >enlisted by corporate interests to work unofficially behind the scenes. > >Corporations see government regulation and the provision of public >services as barriers to trade in services. The corporate agenda to >remove these is achieved through the process of 'progressive >liberalisation' that lies at the heart of all WTO agreements. It >involves regular rounds of negotiation where governments progressively >negotiate away their regulatory authority with no back-tracking allowed >between rounds. The WTO calls this 'disciplining governments'. Like >the ratchets on a pair of handcuffs, the ties on the hands of government >are progressively tightened. This is a subtle but very real corporate >assault on democracy as public control over the economy, society and the >environment is progressively removed. > >Although the WTO denies it, the inevitable ultimate outcome of >'progressive liberalisation' is the commercialisation, privatisation and >deregulation of the world's domestic economies. Essentially, it is like >imposing National Competition Policy at the global level. > >The specific aim of the GATS is to remove barriers to trade in >services. Because most trade in services occurs within a country, >rather than targeting external barriers such as tariffs, it targets all >internal domestic laws, regulations and policies that may possibly >discriminate against foreign service providers or even` limit their >profitability. > >At the heart of the GATS lies the noble sounding concept of >non-discrimination. Its aim is to eliminate existing (and prevent new) >government measures which either discriminate between the services or >service suppliers of other member countries (Most-Favoured-Nation >Treatment) or between its own and those of other member countries >(National Treatment). > >The GATS rules place enforceable restrictions (disciplines) on what >government measures are allowed. Government measures are defined >broadly as any "law, regulation, rule, procedure, decision, >administrative action, or any other form" of measure and also include >subsidies and grants. It also covers every possible means (mode of >supply) by which an individual or firm based in one country may provide >a service to a party in another member country. > >The GATS document consists of two sets of rules. The first, called >General Obligations and Disciplines, contains 17 Articles or sets of >rules that already apply to all government measures. Those requiring >the closest scrutiny are Article 6 (Domestic Regulation), Article 15 >(Subsidies) and Article 13 (Government Procurement). > >The second set of rules, called Specific Commitments, has three Articles >that apply only to government measures in those sectors that a >government has committed to in negotiations. Article 16 (Market Access) >requires the closest scrutiny. The negotiating process pressures >governments to increase the number of service sectors they will expose >to these disciplines in each successive round. > >The GATS contains a 'built in agenda' to renegotiate the agreement every >five years. Serious negotiations started on 19th March this year and it >is the implications of proposals currently on the negotiating table that >are the major cause for concern. > >The most serious concern about the GATS in current negotiations is the >extent to which WTO disciplines will apply to the provision and funding >of public services such as health and education. Based on the GATS text >and WTO documents there are very strong grounds for concern. > >Echoing the WTO, and apparently seeking to allay growing public concern >that public services will be subjected to GATS disciplines, [Australian >Trade Minister, Mark] Vaile recently claimed: "Services supplied in the >exercise of government authority, such as public education, are not >covered by the GATS." However, according to Article 1:3(c) of the GATS, >"a service supplied in the exercise of governmental authority" means any >service which is supplied neither on a commercial basis, nor in >competition with one or more service suppliers." Very few public >services would appear to be excluded by this definition. > >According to a 23 page Government of British Columbia discussion paper >devoted solely to interpreting this definition, "only a small sub-set >of services - those that are provided by completely non-commercial, >absolute monopolies - appear to be protected by this exclusion." In >other words, most public services would be subject to GATS disciplines. > >Even the minutes of a WTO Council for Trade in Services meeting support >this view: > >"Members drew attention to the variety of policy objectives governing >the provision of health and social services, including basic welfare and >equity considerations. Such considerations had led to a very >substantial degree of government involvement, both as a direct provider >of such services and as a regulator. However, this did not mean that >the whole sector was outside the remit of the GATS; the exceptions >provided in Article I:3 of the Agreement needed to be interpreted >narrowly." > >If the GATS disciplines do apply to most public services, then this has >profound potential implications for the future of all publicly funded >services including health, education and the ABC to name a few. The >reason is that public funding is seen as a subsidy under these >agreements and GATS will treat subsidies as unfair competition or >barriers to entry for foreign services and suppliers. National >Treatment commitments already mean a country has to give out subsidies >on a non-discriminatory basis. Once Article 16 disciplines on subsidies >are developed and agreed to, governments will not be able to >discriminate between government and foreign service providers in their >funding decisions. This will massively reduce, and could end, public >sector funding. > >As the WTO Secretariat has said, an obligation to give out subsidies on >an equal basis to foreign and domestic suppliers is a powerful >inducement to get rid of government subsidies altogether. > >Because the WTO can't deny that disciplines on subsidies are already >included in the GATS, or the impact of these disciplines on public >services, it dismisses these concerns by saying public services are >excluded under Article I:3. Yet as we have just seen, very few services >are likely to be excluded on these grounds. > >Current negotiations on Domestic Regulation (Article 6) could impose new >and severe constraints on the ability of governments to maintain or >create environmental, health, consumer protection and other public >interest standards. Proposals include a 'necessity test' whereby >governments would bear the burden of proof in demonstrating that any of >their countries laws and regulations are the 'least trade restrictive,' >regardless of financial, social, technological or other considerations. > >Market Access (Article 16) commitments are the basis under which >countries open up their markets to foreign service suppliers. >Governments have a single opportunity to list their market access >restrictions when they first sign up to the GATS. All signatories to >the first round have a Schedule of restrictions. These restrictions are >the main bargaining chips traded off in negotiations. In the current >negotiating round, the pressure will be on for each government to reduce >the number and scope of their restrictions. > >It wasn't protestors who scuttled the Millennium Round of the WTO in >Seattle in 1999. It was the discontent among less developed countries >over bullying and the undemocratic negotiating processes of the WTO. In >spite of this major setback, a year ago at the GATS 2000 negotiations in >Geneva, the president of the U.S. Coalition of Service Industries, said >the U.S. services industry lobby was very satisfied with the progress >made in the GATS: "Considering Seattle, we have every reason to be >pleased. Where we are now is effectively where we would have been if >the Seattle meeting had succeeded." > >There is one more thing we need to know - the theoretical basis for >'free' trade is a sham. The theory of Comparative Advantage, formulated >in 1817 by David Ricardo, only applies under conditions where capital is >not mobile between nations as was the case in 1817. Under modern >conditions of high capital mobility there is no such thing as >comparative advantage - only absolute advantage and that means strong >economic players win and the weak lose. In the global scheme of things, >Australia is a weak player. > >Why then, is this subtle coup on democracy being allowed to happen? >Indeed, why is government actively facilitating it? > >The WTO Training Package provides a powerful explanation: "there are >various economic and political advantages associated with liberalisation >commitments under the GATS � [including] � overcoming domestic >resistance to change." In other words, it provides an excuse for >governments wanting to impose economic rationalist policies against the >democratic wishes of the public. But why would they want to impose such >policies? > >The simple answer is that they have been conned by a long running >corporate propaganda campaign that stretches back half a century and >arose as a reaction against the prescriptions of Keynes. The message >endlessly repeated through the 60s, 70s and 80s was that the private >sector is efficient while the public sector is inefficient. In reality >the efficiencies of both sectors are, on average, similar. However, the >public sector can provide a service 10% more cheaply because a profit >dividend does not need to be extracted. > >The more recent propaganda is that repetitive mantra: "Globalisation is >Inevitable". Of course, in the sense that it means running the world on >economic rationalist lines, globalisation is not inevitable as The >Economist admitted in its editorial in September last year. This clever >use of language serves two political purposes. First, if decision >makers believe this mantra, they will develop policies that accord with >what they see as 'inevitable' and turn this 'inevitability' into a >self-fulfilling prophecy. Secondly, it creates a mood of resigned >acceptance on the part of the population being impacted on by the >structural changes flowing from economic liberalisation. This also >assists in allowing this 'inevitability' to become a self-fulfilling >prophecy. > >The propaganda tells us economic liberalisation increases economic >growth. While this is true, what we are not told is that GDP does not >subtract the costs of economic growth from the benefits. A new measure >that does this, called a Genuine Progress Indicator (GPI), shows that >for most countries the costs of growth equal, or are greater, than the >benefits. According to the UN, the gap between rich and poor has >continued to grow over the past fifty years and that the rate has been >greatest over the thirty year history of economic liberalisation. The >reality is that economic growth is taking us slowly backwards. > >The propaganda tells us we'll all be better off. The reality is that >business privatises benefits and socialises costs where possible. >Consequently, the benefits of economic growth flow mainly into private >hands while the social, environmental and economic costs (such as >bailing out HIH) are borne by society. Trade and investment >liberalisation serve the interests of the wealthy at the expense of >society in general. Remember, the words 'private' and 'privatise' >derive from the Latin 'privare' meaning 'to deprive'. > >Finally, there are the bureaucrats who negotiate these agreements and >advise our ministers and as mentioned earlier, we must ask whose >interests they serve. The myopia of the bureaucracy is illustrated in >the following response from a Treasury official when a Parliamentary >Inquiry was being held into the Multilateral Agreement on Investment >(MAI), a very similar agreement to the GATS. > >The official was asked: "So Treasury has made no attempt to quantify the >potential benefits or cost to Australia? > >Treasury replied: "As economists, Treasury would argue that trade and >investment liberalisation is good for economic growth, both domestically >and worldwide." > >This reply based on faith and without a fact in sight had the Committee >members shaking their heads in disbelief. This probably marked the >turning point in the demise of the MAI. Similarly, if the facts about >the GATS, rather than the baseless assertions and half-truths, are >allowed to enter the public debate, it is almost certain that the public >will rally behind democracy and the GATS will be scuttled. > > > >Richard Sanders is an ecological economist, futurist and change agent >who initiated and helped coordinate the successful Australian campaign >to stop the OECD's Multilateral Agreement on Investment. > >................... > > > Bob Olsen in Toronto adds that the report by the government > of British Columbia referred to above is available at... > >http//www.ei.gov.bc.ca/Trade&Export/FTAA-WTO/WTO/governmentalauth.htm > > Also, the "corporate propaganda campaign that stretches back half a > century" referred to above has been clearly described by Susan George > >http://www.tni.org/george/talks/bangkok.htm >http://www.zmag.org/CrisesCurEvts/Globalism/george.htm > >http://www.mail-archive.com/futurework%40dijkstra.uwaterloo.ca/msg04579.html > > > > .......................................... > Bob Olsen, Toronto [EMAIL PROTECTED] > .......................................... >
