PRESS RELEASE
22 September 2005
At 6pm today, an informal meeting on “complementary approaches†will take place in the WTO.
Civil society organisations are astonished and appalled by the underhand co-ordinated attempt from the EC, Japan, Australia, Switzerland, Korea and Taiwan to change, mid-way in the negotiations, the negotiating format all WTO members had agreed to prior to the commencement of the GATS negotiations. These changes suggested by EC et al in their proposals of 13 September on “complementary approaches†will subvert the more flexible request-offer negotiating approach WTO members had agreed upon.
The GATS currently allows countries to open up only those sectors governments deem ready for liberalisation. EC et al are suggesting that countries take on mandatory liberalisation in a certain percentage of services sectors, for which they have tabled requests. Therefore, even if their economies are not ready, all developing countries, including LDCs, will be forced to commit a significant number of commercially-important sectors to liberalisation and to deepen that liberalisation by removing restrictions on market access and national treatment.
TNCs based in the developed world currently control 80% of services trade, and more than 90% of infrastructural services such as financial, construction, computer and telecommunication services. Liberalisation of this trade therefore benefits the transnationals in the EU, US, Switzerland, Australia, Japan etc disproportionately. More worrying, even in their own domestic markets, most local service providers in the developing world will not be able to compete with the giant multinationals of the developed countries. Forced liberalisation and the removal of domestic regulation so that foreign providers are given the same treatment will decimate local service companies in the South, and cause further unemployment and decrease access to essential services such as health, education, water, energy.
In addition, the EC’s proposal is patently one-sided – it recommends much more aggressive liberalisation in Mode 3 (commercial presence) where the developed countries’ corporations have an interest, asking for a minimum of 51% in foreign ownership. This effectively makes null and void any performance requirements countries may want foreign companies to abide by. Yet in Mode 4 (movement of natural persons) where the developing world has an interest, it specifically allows the maintenance of economic needs tests, one of the major barriers currently facing developing countries. There will therefore not be any significant gains to developing countries in Mode 4.
Making an Irony of the “Development†Round
This latest move underlines, once again, that this Round, contrary to its stated objectives, will undermine rather than promote development.
According to the General Secretary of the International Union of Food Workers (IUF), Ron Oswald, “These latest proposals demonstrate the extent to which the GATS/WTO rules and processes – already heavily stacked in favor of the corporations – are about deregulation and corporate appetites dressed up as a “development round.” No negotiations on further liberalization should take place until a full, transparent public assessment has been made of the social, environmental and development impact of past and ongoing services deregulation in all the countries concerned. We should also be aware that the further opening up of water provision, agricultural support and environmental services threatens to undermine even further democratic control over food resources and therefore directly menaces global food security.”
Aileen Kwa of Focus on the Global South comments, “This only confirms that the WTO negotiations are driven by corporate interests and not development. It exposes the total hypocrisy of the EC’s lip-service to development concerns. The EC does not care about building up the economies of the poor countries, only about squeezing more blood out of the poorâ€.
Dissenting voice
The Philippines was one of only four developing countries that objected to the proposals for benchmarking. In a meeting with Filipino trade activists from Stop the New Round Coalition, Task Force Food Sovereignty, and The Rice Watch Action Network in Geneva around the time of the General Council Meeting in July, Ambassador Manuel Antonio Teehankee stated that “in general the Philippines opposes the principle of benchmarking.â€
The Philippines has already made its conditional initial offer under GATS on the following sectors- computer and related services, communication, , construction, distribution environmental services, energy, financial, transport, and an improved offer on tourism. On these areas alone, many groups fear negative consequences already for our local service providers with possible lifting of constitutional prohibitions on foreign equity and ownership of such assets as land.
“This EU proposal is a bully tactic plain and simple. The benchmarking proposal is meant to pressure developing countries like the Philippines to commit to liberalize more sectors than they are willing and able to†says Joseph Purugganan of the Stop the New Round! Coalition. “We really hope that the Philippine mission in Geneva hold firm in its position against benchmarking as this proposal goes clearly against our national interest.†He adds.
Contacts:
Stop the New Round Coalition (Philippines)
Joseph Purugganan
Tel: +632 4331676
Email: josephp@focusweb.org
Institute for Agriculture and Trade Policy
Alexandra Strickner / Carin Small
Tel: 022 7890724 / 079 764 8658
Email: astrickner@iatp.org, csmaller@iatp.org
Third World Network
Tetteh Hormeku, Goh Chien Yen and Martin Khor
Tel: 022 9083550 / 078 6562059
Email: chienyen2001@yahoo.com
International Union of Food, Agricultural, Hotel, Restaurant, Catering, Tobacco and Allied
Workers’ Associations
Peter Rossman,
Tel: 022 793 2233
Email: peter.rossman@iuf.org
Public Services International
Mike Waghorne,
Tel: 33 (0)4 50 40 11 70 / +33 685 66 03 41
Email: Mike.Waghorne@world-psi.org
Focus on the Global South
Jacques-chai Chomthongdi and Aileen Kwa
Tel: 022 320 6948 /078 682 4052 and 079 625 8536
Email: Jacques-chai@focusweb.org , aileenkwa@yahoo.com
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