Westminster Scotland Wales London Northern Ireland European Union Local
ePolitix.com

 
[ Advanced Search ]

Login | Contact | Terms | Accessibility

Baroness Symons: Reaching agreement on GATS

Writing exclusively for ePolitix.com Baroness Symons, the minister for international trade and investment, dismisses claims that GATS will mean the end of government's right to regulate.

Member countries of the World Trade Organisation are fast approaching the next important milestone in the current trade negotiations under the Doha Development Agenda.

March 31 is the date when WTO Members are to agree "modalities" for agriculture, and table initial market access offers for trade in services.

I want to concentrate on services - the General Agreement on Trade in Services (GATS) - in this article.

Over the next few weeks, we will be negotiating with our European partners to agree the scope of our initial offer on services. The European Commission's first draft has just been circulated to EU Member States. We are currently studying this with experts across Whitehall and with devolved administrations.

In forming our views on what should and should not be offered we will take careful account of the views received from our recent consultation and set this against our own domestic policy - regulatory and otherwise - for the services sectors in question.

The government will want the offer to do three things. Firstly, to respond positively to requests received particularly from developing countries. Secondly, to protect our own public services. And, thirdly to enter into the spirit of liberalising trade.

In the UK services are essential to our economic performance, accounting for 70 per cent of our GDP, and more than a quarter of all our export earnings. Countless UK jobs depend upon our maintaining an international approach to trade in services. Therefore, trading services internationally is of far greater importance to us than in other countries.

In the EU, foreign trade in 2001 accounted for more than 2,600 billion Euros, of which 600 billion Euros came under services. So we and the rest of the EU have much to gain from the GATS.

But so do developing countries. For their economies to grow, and attract inward investment, developing countries need basic infrastructure services such as telecommunications, financial services and transport.

Without these services, activities such as agriculture and manufacturing simply cannot operate properly. GATS commitments provide the guarantees of stable market access and investment regimes that make it more attractive to business to invest in developing that much needed infrastructure.

For developing countries, the prospects are good if services are liberalised - the World Bank estimates that the liberalisation of services in developing countries could generate US $900 billion per annum in additional income for them.

The starting point for the draft offer is that the EU, and the UK in particular, already have a very open, liberal services sector.

The offer suggested by the Commission includes commitments in sectors such as shipping, professional, computer, business, telecommunications, distribution, environmental, financial, tourism and other transport services.

Significantly, the Commission suggests improved commitments in relation to temporary movement of people, a key request from developing countries.

Significantly, the Commission's draft also does not make new commitments in health, education, water or audio-visual services.

Much has been said in responses to our consultation about the need to protect public services. The government has repeatedly confirmed that we will not take any commitments that could call into question our ability to maintain public services such as in health and education.

Indeed, we have stressed all along that GATS cannot force privatisation of public services. In fact, GATS explicitly excludes services provided by governments.

As all countries have the right to define and maintain their own public services, they can decide themselves which sectors and to what extent they wish to liberalise.

The EU already has commitments that allow foreign private hospitals and schools to be set up here. We see no need to go further in the current offer.

Developing countries too realise that it is in their economic interests to have better domestic services. Their aim is better domestic services - not necessarily privatised or deregulated.

GATS also takes into account a country's right to regulate to meet domestic policy objectives. Services are, and should be, subject to domestic regulation aimed at providing protection for consumers and the public generally.

It is inherent in the nature of services that business should be regulated as - unlike a poor quality consumer item - customers cannot take poor services back to the supplier. That is why it is a nonsense to suggest - as some do - that the GATS means the end of government's right to regulate. It most certainly does not.

Meeting the Doha timetable is very important. Important because we need to give the negotiations enough time to tackle the complex market access issues that are likely to arise. We also need to ensure that liberalisation of trade in services can take place within the right framework of international and domestic rules and encourage fair competition.

We are encouraging our European partners to agree to maximum transparency consistent with protecting our negotiating positions. We have pressed for the offer to be published when it is submitted to the WTO, and I am glad that the Commission has now confirmed it will do this.

Published: Tue, 11 Feb 2003 01:00:00 GMT+00
Author: Baroness Symons

"Unlike a poor quality consumer item... customers cannot take poor services back to the supplier"