17 February 2003
The government has called for public submissions on its approach to talks on international trade in services, but several groups say any deal will leave our essential services vulnerable to overseas exploitation. ADAM BENNET reports.
Proposed additions to New Zealand’s commitments to the World Trade Organizations (WTO) General Agreement on Trade in Services (GATS) have promoted a flurry of emotive media releases from groups worried about the agreement’s effect on New Zealand.
The Government and the nation’s biggest exporters say the GATS is a chance for New Zealand to expand its lucrative services exports sector.
GATS sceptics, such as Green Party co-leader Rod Donald, say the agreement has the potential to “destroy New Zealand”.
Trade Negotiations Minister Jim Sutton has said the outcome of present GATS negotiations is “immensely important to us”.
Services general about 75 percent of our gross domestic product and employ a similar proportion of our workforce, he said.
In addition, a quarter of our export income was generated by trade in services in sectors such as tourism, transport, education, consulting, and computing.
The negotiations could open up new markets for service exporters, “adding significantly to our export earnings”, he said.
New Zealand’s biggest exporters agree with Mr Sutton.
Fonterra chief executive Craig Norgate said his company fully supported the Government in the GATS services negotiations.
“Although concerned mainly with liberalization in the international trade in goods, specifically in agriculture, Fonterra recognises the value in ensuring there is a clear set of rules that bring transparency and consistency to the way New Zealand’s trading partners regulate trade in services:, he said.
The GATS was signed in 1994 by 140 countries, and came into force in 1995. It aims to open up international trade in services as the General Agreement on Trade and Tariffs (GATT) has opened up trade in goods.
Under the GATS, members make legally binding undertakings to “open specific services to foreign competition, and to treat foreign suppliers as they would domestic suppliers”, says the Ministry of Foreign Affairs and Trade (MFAT).
As well as general obligations and initial commitments, GATS members participate in periodic negotiations “to progressively liberalise the conditions under which international trade in services takes place”.
The negotiation process for additional undertakings is under way, but it is not known when a final agreement will be reached. It could be any time between 2005 and 2008, but New Zealand has received several requests for new commitments to the agreement by other WTO members, and has made requests of its own.
The next stage of the negotiation process calls for New Zealand to reply by 31st March with an initial offer for consideration by its WTO partners.
In launching the discussion document, Mr Sutton called for “feedback from interested persons on our approach”.
Several groups have already criticised the agreement and proposals to extend its scope.
Lobby groups, unions, local government, and the Green Party have said the agreement will open New Zealand service sectors to exploitation by overseas interests.
“The scale of the requests from other WTO countries is breathtaking,” said Mr Donald.
“They reach into every facet of our life, and would destroy this country’s character by turning it into a globalized village, tailormade for corporate guinea pigs.”
The Government’s discussion document indicated that “wholesale acquiescence” to requests would allow foreign firms and individuals unrestricted access to New Zealand property and businesses, including Telecom, oil exploration and development, and essential services such as water”, he said.
The agreement could affect the New Zealand Film Commission’s ability to fund locally made films in preference to overseas films, and could hinder government funding provisions for Maori broadcasting.
New Zealand’s partnership of 86 councils, Local Government New Zealand (LGNZ), said many members had concerns about the GATS. The Christchurch City Council issues a paper to all councils on its concerns about the GATS just before Christmas.
LGNZ had written to Mr Sutton, said governance manager Mike Reid, raising its concerns about the GATS, “seeking a guarantee that it will not limit the ability of councils to do their job”. A meeting between Mr Sutton and LGNZ president Basil Morrison was being arranged.
Association of University Staff national president Bill Rosenberg said long-held concerns about the agreement’s effect on public tertiary education were heightened by the release of the discussion document.
“At least one country, thought to be the United States, has asked New Zealand to open up its entire tertiary and adult education sectors to foreign competition,” said Dr Rosenberg. “If accepted, this would include access to subsidies and limits on the ability of our Government in its wish to regulate the sector.
“It would accelerate commercialization and widen the leakage of scarce public funds to private and international companies.”
One of the GATS most vociferous opponents, anti-globalization lobby group the Action, Research and Education Network of Aotearoa (ARENA) said MFAT’s discussion document “fails to tell what is at stake or address fundamental questions such as why New Zealand’s key services should be governed by the interests of huge foreign transnational corporations”.
Arena has produced a guide to GATS, written by Auckland University Professor Jane Kelsey and titled Serving Whose Interests?
Professor Kelsey said the report was an “exposé of how Labour and National governments have tried to lock in the foreign takeover of New Zealand’s essential services”.
She warned that the GATS has the potential to effectively overrule any existing and potential domestic regulations and legislation intended to protect New Zealand from exploitation by overseas interests.
Mr Donald, Dr Rosenberg and Arena have all called for the deadline for New Zealand to make its initial offer to be extended to allow more public discussion on the issue.
“Vested business interests have had a year to lobby the Government on New Zealand’s requests of other countries, yet the public - the people whose lives will be permanently and profoundly affected by any changes - will have just 25 days to make a submission on whether they should succumb to the demands of other countries, said Mr Donald.
Accompanying MFAT’s discussion document, however, was a list of 10 “guiding principles”, which Mr Sutton said would be used to prepare New Zealand’s initial offer.
The principles, intended to “ensure that areas such as New Zealand’s public services, including at the local-government level, are safeguarded,” seem to address many of the concerns raised by GATS sceptics.
“For example, New Zealand will not make any commitments in such an area as water privatization. Nor do we have any intention of weakening traditional commitment to public health and education, he said.
The guiding principles promise New Zealand’s initial offer will contain nothing that would compromise its policy on the treatment of Maori people or organizations, quality standards, or immigration.
The fourth guiding principle says “the government does not intend to make any initial offers to change actual current policy settings (including for local government), and would be well within them”
In addition the third principle says the initial offer made on March 31 “will be essentially conditional and revocable. New Zealand will reserve the right to modify or withdraw them in light of subsequent developments in negotiations”.
Could New
Zealand’s positions be modified to deviate from the guiding principles during
hard bargaining later?
“Not if it says we’re not going to give it away”, says a spokeswoman for Mr Sutton. “Any mandate for a negotiating position in a multi-lateral organization goes to Cabinet.
“Cabinet has decided that, in the national interests of New Zealand, water and some of the other things that are in the principles are not going to be given away”, she said.
MFATs discussion document can be seen on its website at www.mft.govt.nz.
Public submissions close on 28th February.