This past March 31, the Canadian government announced a proposal for opening up service markets in Canada. This step is in keeping with negotiations surrounding the General Agreement on Trade in Services (GATS) involving the WTO’s 146 member states. On June 30, 2002, members made a list of countries whose service sectors they would like to see opened up. The European Union, with France leading the charge, requested better access to the water markets of 109 countries (two of the three main multi-national water corporations, Suez and Vivendi Environnement, are French.)
Canada’s initial proposal for opening up its service sector was in fact a response to other countries’ demands. The commitments outlined in the offer are aimed at improving foreign companies’ access to Canadian markets in the financial, commercial, telecommunications, construction, and distribution sectors, as well as tourism and transport. A release from the Department of Foreign Affairs and International Trade stated, however, that "in keeping with what the Government of Canada has heard from Canadians, Canada has submitted no offer in the areas of health, public education, social services or culture."
According to Tony Clarke, director of the Polaris Institute in Ottawa, Canada’s position is vague, particularly in terms of education. "The definition used in the Canadian proposal includes kindergarten up until the end of high school, with no provision for post-secondary education. Canada’s position needs to be clarified on that end." Clarke also points out that Canada is itself asking member states to open up sectors of their economies such as health insurance. "This request is subtle because it is not being made under the banner of health, but of financial services." He adds that the offer is "a preliminary position that will change as a result of the pressures exerted by member states who will attempt to modify the proposal to include other sectors such as water and electricity."
The ABCs of the GATS
The GATS is one of over twenty trade agreements administered by the WTO. The negotiations, which began in 2000, are aimed at "progressively increasing levels of trade liberalization" and are scheduled to conclude in January 2005. The GATS’s mandate is to liberalize trade in the service sector, gradually eliminating government "barriers" that stand in the way of multi-national corporations. An international trade official from the Bush administration stated that "the GATS is intended to eliminate government policies that prevent services from being provided freely across national borders." The service sector accounts for 22 percent of all world trade and has undergone significant growth over the past few years.
The GATS applies to all levels of government: national, regional and local. Article I.3.b stipulates that negotiations cover all services, except those government services which are "not commercial in nature and not in competition with one or more service providers." The definition of what constitutes a service being "commercial in nature" or "in competition with" remains unclear. Would the WTO consider the public education system to be in competition with private schools?
Article XV requires member states to recognize that "subsidies may have the effect of distorting trade in services." Any member state can therefore call for an inquiry by the WTO if it believes its economic interests are being compromised by subsidies put in place by a given country.
Fourteen members have now put forward their initial offers for allowing better access to their service markets - Canada is one of the first to make its proposal public. As of last June, less than one-third of the WTO’s membership had submitted a request for opening up markets.
Developing countries have been slow to take part. According to Tony Clarke, these countries have been hit hard by the policies of trade liberalization and open markets imposed by the World Bank and the WTO. "They are the ones with the least to gain from this agreement," says Clarke.
"Globalization Cheerleader"
According to Vincent Dagenais, who deals with international relations for the CSN’s executive council, Canada "plays a specific role in these negotiations. One might call it a "globalization cheerleader," promoting openness and transparency during the negotiations, while insisting that everything is going fine without necessarily examining all the consequences."
Clarke points out that certain services should simply not be open to trade or to these negotiations. "We believe that basic services must remain in the public domain to ensure universal access."
