a) The Council believes that it is inappropriate that local authorities be
constrained by an agreement to which local government is not a party.
In responding to this first
point, we would like to draw on the text of Minister Sutton’s letter to Mike
Reid of Local Government New Zealand (LGNZ) of 24 September 2002 (MFAT had understood that Mr Reid’s letter
had been developed in consultation with local councils, and that Mr Sutton’s
reply would also be circulated to interested LGNZ members). Note this is attached (it was not previously
distributed by LGNZ)
NB: If the Council is in
fact able to point to specific instances since 1995 in which New Zealand’s GATS
membership has constrained its ability to regulate , MFAT would be interested
in a detailed account of these.
b) The Council
believes public policy regarding the regulation, funding and provision of essential
services should be made democratically by governments at the national and local
level;
The Minister for Trade Negotiations is responsible for the conduct of
New Zealand’s trading relations. Trade
policy is only one element of economic policy as a whole. The nature of public policy and the provision
of “essential services” within New Zealand fall outside the trade
portfolio. The Council’s concerns in
this respect should be addressed to the appropriate regulatory agencies and
their Ministers.
c) That Council
requests no restrictions be placed on local government’s rights regarding achieving
social and environment ends in procurement.
The right of governments to regulate, and to introduce new regulations
on the supply of services within their territories in order to meet national
policy objectives, is enshrined in the Preamble to the GATS. Furthermore, Article XIII.1 on Government
Procurement states that “Articles II,
XVI and XVII shall not apply to laws, regulations or requirements governing the
procurement by governmental agencies of services purchase for governmental
purposes and not with a view to commercial resale or with a view to use in the
supply of services for commercial sale.
“ Negotiations on government
procurement of services, mandated under Article XIII.2, have yet to take
place.
d) The Council
requests that the Government to fully consult with local government about the
implications of the GATS negotiations for local government services and regulation;
As noted elsewhere, MFAT has had regular contact with LGNZ on the New
Zealand-Singapore CEP, and the WTO services negotiations under the GATS. MFAT would however welcome further opportunity
to discuss services trade and the GATS with local government.
e) The Government
should make public the specific requests it made to other governments in the
GATS negotiations and make public its specific responses to requests from other
governments
New Zealand does not intend to make its own requests public, as these
are negotiating documents. Minister
Sutton released a comprehensive non-country specific summary of the coverage
and content of the requests in his press statement on the requests of 9 July
2002. Those WTO Members that have
submitted requests to New Zealand have asked that these be kept confident*al,
and the government intends to respect this.
However, MFAT is in the process of analysing the requests received so
far (17 in total, 8 from developing countries), and making summaries available
on a non-attributable basis on its website, as part of the Ministry’s consultation
on the development of New Zealand’s initial offer of further services liberalisation,
due to be submitted to the WTO Secretariat by 31 March 2003.
f) The Council
requests that the Government to support the clear exclusion of public services
at central and local levels from the GATS, including local government community
services, environment and water services;
Article 1.3 (b) of the GATS already excludes from the coverage of the
Agreement measures relating to “…services supplied in the exercise of
governmental authority”...
g) The Council
requests that the Government oppose any proposals which would reduce the right
of local government to regulate services, including the application of a
"least trade restrictive" test to regulation;
The objective of Article VI on domestic regulation is not to “reduce
the right of local government to regulate services.” Article VI 1-3 sets out some rules on measures affecting trade
in services in sectors in which specific commitments have been made – in
summary, that these be administered in a “…reasonable, objective and impartial
manner...”. This would seem to be a
test that local government would have little difficulty in meeting, unless it
seeks to apply those measures within its control in an unreasonable, subjective
and biased manner.
Article VI.4 establishes a mandate for the Council
for Trade in Services to develop any disciplines that the 144 WTO Members may
decide (on the basis of consensus) are necessary to ensure that qualification
requirements and procedures, technical standards and licensing requirements do
not constitute unnecessary barriers to trade in services. These discussions have, so far, failed to
reach any conclusions on either the necessity of such disciplines, or their
nature. In the meantime, Article VI.5
requires that Members should apply measures relating to qualification
requirements and procedures, technical standards and licensing requirements in
a manner consistent with Article VI.4 – i.e,
a) based on objective and transparent criteria, such
as competence and the ability to supply the service;
b) not more burdensome than necessary to ensure the
quality of the service;
c) in the case of licensing procedures, not in
themselves a restriction on the supply of the service.
Article VI has been in force
since 1995. Since that time the
government has instituted and reviewed regulation of services sectors without
impediment. The principles expressed in
Article VI.4 are entirely consistent with New Zealand’s approach to good
regulatory practice. They are, nevertheless,
important principles, which New Zealand would wish to see informing the
approach of other WTO Members.
Furthermore, the government
can see that there is some potential for disciplines on domestic regulation to
be of distinct benefit to New Zealand’s services exporters. New Zealand will participate actively
in the Working Group on Domestic Regulation to ensure that the outcomes of the
consideration of disciplines on domestic regulation are consistent with
national domestic policy objectives.
h) The Council
requests that the Government seek to eliminate the ability of WTO trade rules
to overturn nation-state laws and practices that protect health, the
environment, development and human rights;
As the Council will be aware, the nature of international agreements is
that they are a process of give and take.
In order to acquire rights under such agreements, whether these apply to
trade rules, the protection of environment, or the rule of international law,
parties must also assume obligations.
The WTO trade rules have enabled New Zealand to successfully challenge
other governments which would put unfair obstacles in the way of the export
trade on which New Zealand depends for its economic well being. The WTO consensus-based negotiating process
allows our tiny country to prosecute its trade policy, and have its voice heard
on international trade issues, on the same basis as the most powerful trading
nations.
As they are currently expressed in New Zealand
schedule of specific commitments, MFAT is unable to envisage an instance in
which New Zealand’s GATS commitments could be used to “overturn nation-state laws and practices that protect health,
the environment, development and human rights”, as all these commitments do is
give foreign services suppliers the same access to and treatment in New Zealand’s
services market that New Zealand suppliers have. Therefore, our domestic
regulatory environment defines the conditions for trade in services in our
market. If the Council has specific
concerns with the existing regulatory environment, these would be best addressed
to the appropriate regulatory agency.
It is worth noting, however that Articles XIV and
XIV bis of the GATS set out the general exceptions to the agreement. These state that nothing in the Agreement
prevents the adoption and enforcement by any Member of measures necessary, inter
alia, to protect public morals or to maintain public order, or to protect human,
animal or plant life and health. It is
also worth noting that the GATS is regarded as the most development friendly of
the WTO Agreements. Its provisions relating to special and differential
treatment for developing members are the Preamble, Articles III.3, IV, V.3,
XII.1 XV.1, XIX.2, 3 and 4, and XXV.
i)
That the Council requests that the Government commission an independent
retrospective review on the WTO's impact on development, democracy, environmental sustainability, health, and human
rights
j)
It is also recommended that Council write to Local Government New
Zealand requesting
a) That LGNZ prepare a briefing paper on GATS for all local authorities
b)
That LGNZ advocates to central government on
behalf of local government regarding the above concerns
As noted above, LGNZ has been in
contact with MFAT about the GATS on a number of occasions, including through
its Briefing Paper to the incoming government.
LGNZ was also offered a chance to comment on the requests New Zealand
submitted to other WTO members for the current market access phase of the
services negotiation, as part of consultation with exporters, non-governmental
organisations, and other interested parties conducted by MFAT in May of this
year.