A privatisers' hit list

By Katharine Ainger, The Guardian, Thursday 18 April 2002

European commission demands to deregulate services spell disaster for the developing world

In the fevered imaginations of anti-globalisation protesters, the World Trade Organisation agreement known as Gats is a corporate boot sale of essential services, from water to electricity to the media. It is, they say, an attack on democracy that will lock the world into privatisation and deregulation of essential services ad infinitum.

Now, as revealed in this paper, we have got the leaked documents of the European commission's secret WTO negotiating positions to prove it. Let no one wonder any longer why WTO negotiators have to meet behind six-foot fences to avoid protesters.

The commission documents—leaked to Corporate Europe Observatory and posted on the Guardian's website—are breathtaking in scope. This is a corporate shopping list of requests to open up service sectors in everything from water supplies to banking in 29 countries, including China, India, Canada, Egypt, Mexico and the US. In a month, more countries will be included.

The requests are described by an Indian NGO, Equations, as a frontal attack on the Indian constitution. The Council of the Canadians, a large and moderate consumer group, described them as chilling. The EU demands are extraordinarily aggressive—whether they are to remove the ability to limit Wal-Mart's activities in India, or to take away the Mexican people's control of the land along their borders, or to destroy Malaysia's capacity to regulate its financial sector.

Despite the commission's cant that a development round of trade negotiations is under way at the WTO, an essential tool for poor countries—the ability to regulate foreign investment—is a key target. One of the arguments used to deflect critics of Gats is that developing countries have the choice to opt in the services they want to be liberalised, making exemptions for those they wish to build up domestically. What the documents show is that while that may be true, the commission has simply taken this list of exemptions—and used it as the basis for its liberalisation hit list.

Water in developing countries is a major target for European companies in the current negotiations. Citizens from Ghana to Argentina and Bolivia have already strenuously resisted such privatisations. The idea that poor people's access to clean water can be adequately decreed by European corporations such as Vivendi or Thames simply has no basis in reality.

Another controversial demand is for Canada, the US, Australia, China, India, Malaysia, Indonesia, Argentina, Panama and Colombia to make no market restrictions on the distribution, at wholesale or retail level, of alcohol or tobacco.

To add insult to injury, while the EU incarcerates increasing numbers of migrants from poor countries, it is now pushing across the board for intra-corporate labour mobility under Gats. In a nutshell, that's free movement for corporate yuppies, but not for street-sweepers from Kenya.

If this is the commission's negotiating position, what on earth does the US's look like? The commission has said that Gats is first and foremost an instrument for the benefit of business. It is more than that. It is a corporate wish list made manifest. Corporate lobbying is its heart and soul. According to David Hartridge, former director of the WTO services division, 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.

What is the point of discussing how we fund our healthcare systems when we don't know what effect Gats will have on them? What we do know is that the US corporate lobby group, the US council for service industries, with its strong American healthcare contingent, has already complained: Historically, healthcare services in many foreign countries have largely been the responsibility of the public sector. This public ownership of healthcare has made it difficult for US private-sector healthcare providers to market in foreign countries.

Another of the most important members of the USCSI was Enron, pushing for energy deregulation worldwide. One Canadian activist, Tony Clarke, says that other members of the USCSI pushing for Gats reads like a who's who of those connected to the Enron scandal, including the beleaguered accountants, Arthur Andersen.

Secret trade and investment documents leaked over the internet are the dynamite keg that have brought other such treaties to their knees. Five years ago, US NGO Public Citizen found and posted an obscure investment treaty called the Multilateral Agreement on Investment on their website. What campaigners found in this text sparked an unprecedented worldwide campaign against it, until the treaty no one had heard of crumbled under public pressure.

The lesson from the MAI is that it is no longer possible to negotiate trade and investment treaties in secret. As the Financial Times wrote in the wake of the MAI campaign: That makes it harder for negotiators to do deals behind closed doors and submit them for rubber-stamping by parliaments. Instead, they face pressure to gain wider popular legitimacy for their actions by explaining and defending them in public.