The GATS Agreement Challenging the European Union
The GATS Agreement challenging the European Union – An analysis of the decision making and governance process in the European Union in respect of selected segments of the GATS Agreement.
Description
Framework
The services sector and its development within world trade are particularly important for the European Union. Indeed, services rank high in the Community context; in terms of trade, they are the most dynamic economic activity, representing two thirds of the European Union’s gross domestic product (GDP) and employment (ETUC,2003). In addition, the European Union is the world’s leading exporter of commercial services . In historical and social terms, public services in Europe have played an important role in the development and strengthening of the European economies, constituting one of the historic foundations of the European social model. Moreover, the enduring importance of public services and other services of general interest is clear from the predominance of debates about their future, and statements from high-ranking politicians such as Pascal Lamy who clearly believes that “Public services remain an essential basis of the European Social Model” (Lamy 2003).
The process of liberalisation of services on a global scale, embodied in the General Agreement on Trade in Services (GATS) designed to liberalise all services in the framework of the World Trade Organisation (WTO), is an emanation of the current dominant liberal rationale according to which free trade benefits advanced industrial societies as well as developing countries (DCs), creating an equal playing field between countries and promoting social and economic development through foreign direct investment.
While the underlying motive for this determination to open up trade in services is strictly economic in nature, the implications of this process cannot be simply reduced to its economic dimension alone. The liberalisation of public services is clearly liable to generate repercussions of a social and environmental nature.
In the absence of a comprehensive assessment of the impacts of GATS-style liberalisation as required by the article XIX of the treaty, the GATS gives rise to a number of concerns for the European and international Trade Union movement which are considered to include negative impacts on universal access to basic services such as health care, education, water and transport; Fundamental conflict between freeing up trade in services and the Government regulatory capacity.
The European Union, as the representatives of the collective position of the member states towards the WTO and, in its capacity as important economic actor in the multilateral context and promoter of the social dialogue, has a special role to play in terms of ensuring that these different parameters are taken into account in the definition of its negotiating aims and strategies. Thus, this research proposes to assess to what extent the institutional arrangement of the EU actually does facilitate, in terms of their composition and mechanisms, the taking into account of the different areas likely to be affected by the GATS, considering the different aspects of public interest.
Focus of the study
This research will investigate the different European decision-making levels and the actors involved in the European Union’s external trade policy in relation to the GATS negotiations.
The purpose of this study is to illustrate the mechanisms underlying the EU decision-making process in the trade policy area, in the framework of negotiations on the General Agreement on Trade in Services (GATS). This should enable us to ascertain, on the one hand, to what extent the different actors making up the institutional architecture of the European Union, in the context of a dynamic of liberalisation of services, are representative of the different sectors affected by the GATS outcomes and, on the other hand, to what extent the Community approach respects the need for balance between private and public interests by involving the social partners in the process. The social partners are the trade union movement, the non-governmental organisations and other representatives of civil society, in keeping with the concept of the European social model.
a. The institutional dimension
There will be a need to identify the relationships between the different protagonists and their position in the European decision-making process in relation to the liberalisation of services.
In order to answer these questions, it is necessary to identify the composition and role of: - the 133 Committee the members of which are appointed by the Council, and which conducts negotiations in close collaboration with the Commission. Its activity is surrounded by relative opacity attributable in part to the absence of publication and the lack of transparency by which it is characterised.
- the European Services Forum, what are the interactions between the 133 committee and the European Services Forum which has gained notoriety as a European lobby group (comprising 85 major EU services corporations) and has been advancing the GATS agenda in close unison with DG trade, since it meets in closed consultation. The research will consider this interaction in the context of the relationship between the Commission and the European and national democratically elected institutions.
- the European parliament, to what extent is the European parliament, the only EU institution directly elected by citizens, capable of exercising its right of political control, in accordance with its prerogatives, in relation to the EU trade policy? The Euro-MPs, unlike the representatives of the European services industry, were initially refused access to the EU request lists to third countries and several of them have been requesting in a letter sent to Pascal Lamy more transparency regarding the GATS process.
- the national parliament, At national level, the role of the national parliament in the Gats process should also be studied. The implications of current debates about the constitutional relationship between the EU and national parliaments and their role in the process of EU policy-making are also pertinent to this research.
The European social model presupposes participation by the different European social partners in the decision-making process. The implications on changes to the EU’s basic treaties in this respect are pertinent.
- the European Trade Union Movement, To what extent does the European Trade Union Movement have access to the devising of a European approach that shows concern for the respect of public interest? The GATS agreement affects many different sectors of society and entails repercussions which extend beyong the strictly trade sphere into the social and environmental spheres. The European trade union movement has expressed its fears concerning the fact that no account was taken of the positions put forward by the trade unions and NGOs and by other representatives of civil society in determining the purpose of the negotiations. Although the International Confederation of Free Trade Unions (ICFTU), and its Global Union partners are calling on trade ministers for more transparency and to come clean to national trade union organisations, and other concerned groups with details of the offers and requests they are making in the context of GATS, the study of the level of coordination of their action in the GATS framework is of interest too.
B. Using sectoral lenses
However, it is necessary to refine the object of analyse further, since, as the existing literature convincingly argues, the entire GATS is immense and would far surpass the capabilities of this project. Consequently, it is intended to focus the research on a number of services that are of importance to the trade union movement and the GATS negotiations. These include: water services, transport services and educational services.
Water services, In terms of the GATS negotiations on water, the EU has proposed a revision of the current WTO classification of environmental services, thereby including water collection, purification and distribution services, and therefore submitting this sector to the GATS area of implementation.
Transport; generally transport privatization is one of the indisputable and clear-cut illustrations of the direct impact of an 'all private' approach on the every day lives of people in many European countries
Education; the ambiguous provisions of the GATS, the instances of joint funding, and the possibility of recourse to the courts of the dispute settlement body mean that the announcement made in February 2003 that the EU won’t propose any engagements in the fields of public health, audiovisual services and education in the current GATS negotiations cannot be taken at its face value.
This study proposes, by identifying the different decision-making levels of the EU and of the European trade policy makers in the framework of the GATS, and the links between them, to evaluation the degree of coherence existing between the the European management of the liberalization of services and the concept of a European social model.
Researchers
Gintare Kemekliene
Researcherphone: +32 (0) 2 224 04 85
Publications
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