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Trade in Services OverviewWhen most people think of trade, they think of goods crossing borders. A new generation of trade rules, however, is expanding the reach of trade agreements into nearly every aspect of the global economy and our lives. New rules on “trade in services”, could impact areas far removed from the purview of traditional trade agreements- issues critical to public welfare- including healthcare, education, energy, water distribution, sanitation, transportation, and more.
Trade negotiators are currently writing these rules within an expansion of the General Agreement on Trade in Services (GATS) within the WTO as well as neotiations of the Free Trade Area of the Americas (FTAA), the Central American Free Trade Agreement (CAFTA) and several bilateral agreements. If completed, these agreements would greatly threaten our ability to regulate both public and private services in the public interest, erode public funding for services, lock in any attempts at privatization or contracting out of services, and prevent any new gains in public services. These new rules would apply not only to the provision of services which crosses borders, but also to foreign direct investment in services and to the importation of workers to perform services in foreign countries.
More specifically these trade rules could:
- Lead to deregulation of public and private services. By ruling many domestic regulations “trade distorting”, trade agreements could promote the weakening of many public interest standards and regulations leading to more disasters such as the Enron and California energy crises.
- Require that private foreign service providers have equal access to public funding for services. This rule could seriously erode the funding base for public services such as schools and libraries.
- Prohibit governments from ensuring viable services by limiting the number of providers of a certain service. Public services like postal services couldn’t be viable if they were forced to compete with an unlimited number of providers.
- Prohibit government from protecting public health and environmental safety by controlling the number of service providers in certain sectors. This could have a negative impact on zoning laws meant to mitigate harmful impacts of waste incinerators in communities or development on public lands.
- Outlaw government monopolies on public services. This would make it impossible to reverse the privatization of any service by requiring compensation to private service providers for profits lost. This could lock in any experiments with privatizing social security or other services.
- Prohibit governments from establishing or maintaining requirements on working conditions for employees of contractors providing services to the government. This threatens living wage and prevailing wage laws as well as other worker protections.
- Allow foreign corporations and governments to challenge worker health and safety laws, laws on staffing, professional standards, and public interest regulations as barriers to trade. Foreign corporations would be able to sue governments for compensation when domestic regulations infringe on profits.
These new rules on trade in services would take important decisions about the provision and regulation of both public and private services out of the hands of communities and democratic institutions, and place them under the control of unaccountable trade negotiators and tribunals. At the same time, this new threat is mobilizing new voices throughout the world as the people in these communities- the teachers, seniors, consumers, construction workers, public sector employees, doctors, and environmentalists- see their common stake in trade policies.
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