According to the European Commission, the General
Agreement on Trade in Services (GATS) is 渡ot just something that
exists between Governments・but 套 first and foremost an
instrument for the benefit of business.・That is not by accident.
The 1994 GATS agreement would never have come into being without almost
twenty years of intense lobbying by the US services industry. The
current negotiations to expand and deepen the scope of the GATS seem to
be primarily driven by the European Commission, working in close
cooperation with European services companies.
Godfathers of GATS
The US Coalition of Service Industries (USCSI) is
undoubtedly the most influential services lobby group in the world. Its
origins date back to the mid-1970s, when US financial services companies
American International Group (AIG), American Express and Citicorp wanted
to improve their access to heavily regulated markets outside the US,
especially in South-East Asia. They considered the inclusion of 奏rade
in services・in the General Agreement on Tariffs and Trade (the
WTO precursor) as a good tool to force open these markets.
After having placed services firmly on the global
trade agenda in the first half of the 1980s, the US Coalition of Service
Industries worked closely with US negotiators during the long-winded
Uruguay Round (1986-1994). As former USCSI chairman Harry Freeman
reflected afterwards: 鄭t the close of the Uruguay Round, we
lobbied and lobbied. We had about 400 people from the U.S. private
sector. There were perhaps four Canadians and nobody from any other
private sector. The private sector advocacy operations in the U.S.
government are radically different from those in every other government
in the world.・
CEOs Taking the Lead
But although the 1994 GATS agreement created a
multilateral framework for the corporate agenda of liberalising trade in
services, it still lacked important elements. Most significantly, it
didn稚 contain a sectoral agreement on financial services as US
demands for market access were not met. An attempt to conclude a
Financial Services Annex to the GATS was made in the first half of 1995,
but it failed when the US withdrew from the negotiations.
But a deal on financial services clearly was in the
interest of the financial services industry, especially from the US and
the EU. Aware of that corporate interest, the US Government, the EU
Commission and the WTO Secretariat actively sought the support of US and
EU financial services industry leaders to break the deadlock in the
negotiations. In the Spring of 1996, the Financial Leaders Group,
exclusively consisting of chief executive officers and chairmen, and a
lower-level Financial Leaders Working Group, started operating.
According to Bob Vastine of the USCSI: 典he
Financial Leaders Group not only agreed on the principles it would seek
to achieve in the negotiations, and on the key countries from which
concessions would be sought, it also agreed on the precise barriers it
wanted removed. The unanimity in the Financial Leaders Group became a
message to governments that the US and European financial community
wanted meaningful liberalization and a substantial success, and that the
negotiators should co-operate to achieve it. The strategy clearly
worked.・
Chief executives from the Financial Leaders Group,
especially those from the US companies, reportedly played a decisive
role during the final hours of the negotiations in Geneva in December
1997. The conclusion of the WTO Financial Services Agreement, improving
US and EU-based financial services companies・access to financial
services markets in Central and Eastern Europe, Asia, Africa and Latin
America, formed the profitable outcome of the Financial Leaders Group痴
two-year lobbying campaign.
Brittan痴 Brainchild
The decisive role of the Financial Leaders Group
during the WTO Financial Services negotiations in 1997 deeply impressed
EU Trade Commissioner Leon Brittan. He also realised the important role
of the US Coalition of Service Industries in guiding US negotiating
objectives during the Uruguay Round. At the start of preparations for
the GATS 2000 negotiations, Brittan decided to create a European
services industry pressure group, comparable to the USCSI and borrowing
from the new, CEO-driven approach of the Financial Leaders Group, to
guide the EU GATS negotiators.
So in early 1998, Leon Brittan asked Andrew Buxton,
who had also been a key figure in the Financial Leaders Group, to form a
European services lobby. At the launch meeting of the European Services
Forum on 26 January 1999, Commissioner Brittan outlined the role he
envisioned for the newly formed organisation: 的 am in your hand
to listen what are your objectives, your priorities for liberalisation [・
I count on your support and input, at the company, CEO and Chairman as
well as at the European or National Federations, so that we can refine
our strategy and set out clear, priority negotiating objectives which
will make a difference in the international expansion of service
business.・
In September 1999, Mr. Robert Madelin, a high level
DG Trade official, told a UK business audience: 典he European
Commission is convinced of the need to work not only with the member
states・experts but directly with European industry. We are going
to rely heavily on the European Services Forum. [・ We are going
to rely on it just as heavily as on member state direct advice in trying
to formulate our objectives.・
Evidence collected by Corporate Europe Observatory
clearly indicates that the European Services Forum has indeed developed
into a privileged liaison structure between the European Commission痴
GATS negotiators and the EU services industry. In fact, the ESF has
played an important role in the formulation of the EU GATS request lists
that were forced upon the EU member states in a rushed procedure between
April and June 2002.
GATS Requests and Offers: Open Debate Needed
At the Doha WTO Ministerial Conference, the WTO
member states set themselves deadlines for the tabling of bilateral
requests (30 June 2002) and corresponding initial offers for new GATS
commitments to liberalise trade in services. The preparation of the
requests has taken place in a very intransparent and unbalanced manner.
In the European Union, but also in other OECD countries, government and
business have closely collaborated in the preparation of the request
lists, whereas NGOs, trade unions and parliaments were excluded from
this process.
The debate over the corporate agenda behind the GATS
negotiations gained new momentum in the Spring of 2002, when a series of
draft EU request lists was leaked to NGOs. The draft request lists
contain detailed demands to 29 WTO member countries to apply GATS
free-trade rules to a broad range of their service sectors, including
water, energy, transport, tourism, construction and distribution
services. The draft GATS EU requests lists addressed to countries like
Indonesia, the Philippines and Colombia were clearly not written from a
development perspective, but reflect offensive interests of the EU-based
services industry.
The European Commission had planned to keep these
documents secret, even after approval by the EU member states in the
so-called Committee 133 on services. As the head of the Cabinet of
Pascal Lamy, Pierre Defraigne stated a few weeks before the leak, the
request lists 田an and WILL NOT be made public・ But the
secrecy didn稚 extend to business.
On 22 October 2001, the Commission noted in a letter
to Pascal Kerneis, Managing Director of the European Services Forum:
・W)e would very much welcome industry痴 input to this
exercise, both in terms of finding out where the problems currently lie
and in making specific requests. Without ESF input the exercise risks
becoming a purely intellectual one ・. The Commission followed
this up with a memo on the 14 January 2002, in which they 都tress
the importance to provide within the following days any input you may
have, as we are currently finalising the draft requests that will be
transmitted to Member States very soon.・
These documents highlight how the European Commission
has actively sought ESF guidance in formulating its GATS negotiating
positions. They point to a sequence of events where business input has
been prioritised over member state reflections. Moreover, there has been
no comparable input by civil society groups, including trade unions. Nor
did the Commission respond to the broad range of concerns raised since
GATS negotiations started in February 2000, except by denying these
concerns as false and exaggerated.
Groups that are jointly campaigning against the EU痴
GATS agenda, have repeatedly requested the European Commission and the
EU Member States provide full transparency on GATS negotiations and
called for a severing of the close links between the European Commission
and the European Services Forum. But at the time of writing this article
(December 2002), these demands were not met. Although summaries of both
the incoming and outgoing GATS requests were published, this falls far
short of the level of transparency which would allow for a well informed
debate on the EU GATS negotiating agenda.
The corporate influence over GATS negotiators is not
limited to the European Union and its member states but reflects a
wide-spread phenomenon, especially in countries with a well-developed
services industry. While it can be useful and justified for governments
to take business concerns into account when formulating trade policy,
privileged co-operative arrangements between business and government
have no place in a democratic policy-making process.
This crisis of old methods calls for a new model for
international policy-making and regulation of a globalising economy.
High priority should be given to the development of balanced and
democratic mechanisms for civil society input in trade policy
preparation. International trade policy should be reassessed and
reoriented so that it serves the common interest and fosters sustainable
development.
